Wired Magazine editor Chris Anderson has an important new book out, “Free: The Future of a Radical Price.” He focuses on the economics of free services, building on the excellent analysis of thinkers like Mike Masnick (whose 2007 essay, “The Grand Unified Theory on The Economics of Free,” succinctly sums up the concept).

Following up on his book, Anderson has a new op-ed up on CNN.com in which he explores how the emergence of free services in the digital age has raised new challenges for antitrust regulators:

Now Google has Microsoft-like dominance in search and search advertising. What should it not be allowed to do? That question may come to define this era of antitrust law. When [Christine] Varney was confirmed, she withdrew the Bush administration’s report setting relatively conservative standards of antitrust enforcement and declared, “The Antitrust Division will be aggressively pursuing cases where monopolists try to use their dominance in the marketplace to stifle competition and harm consumers…

Varney and her team of economists and lawyers are no doubt tangling with the question of how to enforce antitrust laws in a way that ensures an “even” playing field for competition without causing consumers to lose access to free services that are growing more abundant by the day.

But there’s a more important question that Varney should be asking: what actually constitutes market dominance in the age of free? Is the fact that a firm has a substantial share of a distinct marketplace a reliable indicator of dominance? And if the result of firms achieving high market share is an explosion of free goods and services, is it even in consumers’ interests for government to go after “dominant” firms?

Recent happenings in the tech world suggest that even markets often considered to be dominated by a single firm may be a lot more contestable than we think. Today’s hottest tech news item is that Google is “planning a direct attack” on Microsoft’s venerable Windows operating system. And just a few weeks ago, Microsoft launched its new search engine Bing, accompanied by a massive $100 million dollar advertising blitz.

Hold on a minute. Doesn’t Microsoft have a stranglehold of the operating system market? And isn’t Google in control of the search engine market? Antitrust regulators on both sides of the Atlantic certainly seem to think so, if recent investigations are any indicator.

Yet the top brass at Microsoft and Google must think otherwise, or else neither firm would be devoting such resources to breaking into the search and operating system markets, respectively. Rather than resting on their laurels, Microsoft and Google are competing aggressively, rolling out new and improved services all the time. Consumers are benefiting along the way — even from actions that are allegedly “anti-competitive,” such as Microsoft’s inclusion of bundled software with Windows or Google’s plan to digitize volumes of orphan works.

This dynamic is exactly the opposite of what one would expect from a market in need of “saving” by government trust-busters. In fact, despite Google’s 65% share of search and Microsoft’s 88% share of operating systems, both markets appear to be highly contestable.

Just as the 505-day XM Sirius antitrust saga comes to a bittersweet end, reports have resurfaced that a new satellite merger may be in the works. Dish Network is floating the idea of merging with competitor DirecTV. Dish Network and DirecTV, the two largest satellite television providers in the U.S., tried to merge back in 2001. Antitrust officials ultimately blocked that merger, concluding that it would hurt competition in television programming. Naturally, a renewed merger attempt would likely encounter similar obstacles, according to industry observers.

This time around, though, the deal may have a better shot of surviving regulatory scrutiny, buoyed by the approval of the XM-Sirius merger. Compared to 2001, competition among video providers is thriving, and there are more alternatives to satellite television than ever before. Many consumers can now choose from a multitude of terrestrial television providers—phone companies are rapidly rolling out IPTV-based video services like FiOS TV and U-Verse, and cable overbuilders like RCN are gaining momentum in densely populated areas.

In addition, a growing number of viewers are shunning traditional television services entirely, turning to a la carte substitutes like the iTunes episode store, Netflix, and Xbox Live Marketplace. With an $8.99 per month subscription to Netflix, it’s possible to stream instantly a video library eclipsing that available on cable or satellite TV. Ad-supported video websites like Hulu and Comedy Central, which offer hundreds of archived TV shows on the Web for free, may soon render the television channel obsolete.

Dish Network’s talk of a potential merger comes on the heels of the company’s first ever quarterly loss of subscribers, and that may just be the tip of an iceberg. Until recently, television subscribers were largely content with watching programs on a predefined schedule, but on-demand services are changing that. As viewers come to expect the ability to watch any show anytime, without bothering to record it in advance, the lack of bidirectionality inherent in Direct-Broadcast Satellite is a glaring deficiency that cable and telecom firms will exploit at every juncture. Unless satellite providers can negotiate arrangements with broadband carriers, or succeed in building wireless networks with newly acquired spectrum, Dish and DirecTV face a bleak future, especially if they are unable to trim costs and enhance content choice.

A Dish-DirecTV deal would also likely generate a flurry of opposition from cable competitors, worried that a combined Dish-DirecTV would be better positioned to compete in years to come thanks to the cost savings stemming from consolidation. Launching a geostationary orbital satellite isn’t cheap or easy—DirecTV infamously touted plans to carry a hundred high-def channels for what seemed like eons before the satellite needed to provide proclaimed capacity actually went live. Combining Dish Network’s fleet and DirecTV’s would give bandwidth-rich television competitors like Verizon a serious run for their money, and the resulting cost savings would allow Dish-DirecTV to offer better bargains to subscribers.

Still, it would come as little surprise if none of these facts were enough to ward off antitrust officials, who are notorious for winnowing down the definition of a market to the point where practically every firm can be defined as a monopoly. Regulators are struggling for a reason to exist as technological progress continues to erode entry barriers. Intervening in the wealth-creating sector by imposing restrictive conditions on otherwise efficient mergers is a convenient excuse for antitrust watchdogs to stay in the spotlight long after the need for “competition police” has evaporated.

Of course, the mere mention of a potential merger rarely precipitates an actual offer, and the prospect of insurmountable regulatory roadblocks has got to discourage Dish and DirecTV from investing the resources in exploring a merger that would likely endure the same fate as it did in 2001. Whether discussion of a renewed merger attempt will proceed to the next level is anyone’s guess, but it’s a sure bet that no matter what happens, antitrust regulators will be looking out for everybody but consumers.