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DOJ starting AT&T, Verizon antitrust reviews?

updated 02:50 pm EDT, Mon July 6, 2009

DOJ Starting ATT Antitrust

Cellular carriers have been given added pressure on Monday as a new leak claims the US Department of Justice is beginning a review of whether major providers are violating antitrust laws. The government's head for such cases, Christine Varney, is said by Wall Street Journal tipsters to be reviving Sherman antitrust law and checking to see whether AT&T, Verizon and other providers are misusing their dominant positions to stifle competition, particularly with exclusive handset deals. Politicians and DOJ officials have been concerned that AT&T's deal for the iPhone and similar bargains have prevented smaller carriers from offering a fair challenge.

The informal look is still in "very early stages" but is also investigating complaints about limitations for what third-party companies can do using carriers' data networks, the rumor adds. Critics have often accused companies of blocking certain media download and VoIP apps not because of carriers' self-proclaimed bandwidth issues but to prevent legitimate competition from rival services. Still questionable but substantial allegations have charged AT&T with limiting SlingPlayer to Wi-Fi to help its own IPTV service.

Carriers themselves have long denied these claims, arguing that exclusivity deals lets them guarantee a lower price for a given phone and that they've been willing to remove barriers to certain kinds of apps when technology allows. AT&T, for example, told Electronista earlier this year that it will accept VoIP on 4G much more freely as the latency should be low enough to permit more natural conversations.

It's unknown how close the Deparment might be to launching a formal investigation.



By Electronista Staff
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  1. LenE

    Fresh-Faced Recruit

    Joined: May 2004

    +2

    DOJ on shaky ground

    As much as I would love to have the carriers get squeezed like grapes, the DOJ doesn't have a leg to stand on, at least with regards to anti-trust matters here.

    The exclusives deals don't involve collusion between the carriers. If anything, they are in fierce competition to get exclusives to keep those units away from their competitors. None of the carriers have even 70% of the market, so no monopoly. What we have is an oligopoly situation (like Pepsi vs. Coke), where the big carriers are more able to construct beneficial deals with handset manufacturers.

    The best bet for anti-trust behavior would be in the apparent collusion on SMS text pricing. Again, this has been a required part of the GSM protocol since 1985, so they are charging for something that is required to make the phone work on their network. Again, there is a market here, and (ignorant) consumers have been willing to pay the ridiculous charges from all competitors. I'm sure there are small wireless companies that offer SMS texting for free, but that isn't enough for them to attract enough customers to become one of the big four.

    -- Len

  1. fattychance

    Fresh-Faced Recruit

    Joined: May 2009

    -1

    Anti-trust...you betcha

    I think it's absolutely Anti-trust when they use their position of selling mobile data to squeeze out competitors from the market. I'm talking about ALL voip and video tied to TV being banned from the iPhone.

    I also question the double charging of customers who buy "unlimited data" and have add-on "tether" plans to use that same rented "unlimited data".

    I understand the argument that users will use more data if they tether...but then they should just be honest about the data charge and list the tiers.

    Calling it "unlimited" is nothing but false advertising.

  1. testudo

    Forum Regular

    Joined: Aug 2001

    0

    Re: Antitrust you betcha

    I think it's absolutely Anti-trust when they use their position of selling mobile data to squeeze out competitors from the market. I'm talking about ALL voip and video tied to TV being banned from the iPhone.


    Um, that's Apple doing the banning. Or maybe you missed the fact they control the Apple store?

    And read your contract. Unlimited is in terms of how much you can use (and even there there's a limit, I believe), not in HOW you use it. They seem very specific about what functions you can and can't use over their data plans.

    I understand the argument that users will use more data if they tether...but then they should just be honest about the data charge and list the tiers.

    Um, they are honest. That's why they charge you extra. The whole point is that it is a PHONE data plan.

    Calling it "unlimited" is nothing but false advertising.

    No, its just your definition of unlimited is limited to thinking it means you should be able to do anything you want with your service.

    And if that's your problem, then it isn't an anti-trust issue, its an FTC issue.

  1. jameshays

    Fresh-Faced Recruit

    Joined: Mar 2003

    -1

    Free Market

    This is free market at it's finest and it's working very well. Consumers control the companies by buying their services. If consumers don't buy it, the company fails, unless they are "bailed out"... Companies try to create an environment where they are able to compete against each other. LenE has it correct here and its a sad day when businesses can't compete on something as fair as this. If anything, other carriers should be kicking themselves for not being first in line when Apple started looking for a place to land the iPhone.

  1. testudo

    Forum Regular

    Joined: Aug 2001

    0

    Re: Free market

    Hmmm, exactly how did this become about the iPhone?

  1. testudo

    Forum Regular

    Joined: Aug 2001

    0

    Re: Free market

    Hmmm, exactly how did this become about the iPhone?

  1. davoud

    Fresh-Faced Recruit

    Joined: Jan 2005

    -1

    No Need

    Don't need no stinkin' investigation; just ask the users. Being forced to use AT&T on the iPhone is like buying, say, a stereo and being permitted to play music from only one label. It ought to be stopped promptly with an order, not a lawsuit.

  1. dmsimmer

    Fresh-Faced Recruit

    Joined: Feb 2005

    0

    The fat lady's warming up

    YES! Please let me leave AT&T!

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