The market says Cingular overpaid in its acquisition of AT&T Wireless.

The proof lies in the tales told by the deal's advocates. It's about consolidation. The idea is that, with fewer players (and this deal eliminates two -- AT&T and NTT DoCoMo) the remaining players can enjoy something like monopoly profits, or at least oligopoly profits (which as Coke or Pepsi will tell you are tasty indeed).

But are the barriers to entry really that high?

Unless the government is willing to enforce this monopoly, by preventing the growth of unlicensed networks, the barriers to entry are quite low.

Cingular is paying thousands of dollars for subscribers who pay it bills of $50 per month. Even if it can double those bills, can it make money? As it doubles those bills, won't it get increasing amounts of competition from mesh networks and 802.11?

That's why, despite a lot of moaning from analysts and the press over the fate of AT&T Wireless shareholders, I put that headline up there. The AOL-Time Warner deal was the pinnacle of the last boom. Time Warner's rhetoric at the time indicated this was a move toward dominance, and consolidation. In fact, we now know that deal put the high on the prices of Internet assets, and once the ceiling was seen everyone plunged back toward the floor.

Could that now be the case with cellular providers?