It was more or less not a question of if, but when, and now we’re here: the US Department of Justice is said to launch an investigation into the US telecommunications industry to see if the two biggest players, AT&T and Verizon, are abusing their market position. Even though Apple is not a target for the probe, the usually trustworthy Wall Street Journal states that the iPhone/AT&T deal will also come under scrutiny [subscr. req.].
The US Department of Justice hasn’t been particularly active when it comes to market regulation during the Bush years. With Barack Obama firmly in the saddle now, it seems as if this is changing. The DOJ, as most of you will know, played a massive role in the case United States vs. Microsoft during the late ’90s.
AT&T and Verizon together dominate the US telecommunications market, with them together controlling 90% of landlines, and 60% of mobile subscriptions. The goal of the probe is to determine whether or not they are abusing their market position. Part of this could be the exclusive deals these providers often make with phone makers, such as the iPhone.
“Among the areas the Justice Department could explore,” writes the WSJ’s Amol Sharma, “is whether wireless carriers are hurting smaller competitors by locking up popular phones through exclusive agreements with handset makers, according to [people familiar with the matter.] In recent weeks lawmakers and regulators have raised questions about deals such as AT&T’s exclusive right to provide service for Apple Inc.’s popular iPhone in the U.S.”
AT&T was also asked to respond, but in a statement, the company said they aren’t aware of any probe just yet. “We are not aware of any formal investigation by the Department of Justice, nor have they asked us to provide any information,” AT&T states, “The U.S. wireless industry is highly competitive and, as a result, delivers terrific innovation, many choices and attractive pricing for all customer segments.”
It would be an interesting investigation, and could benefit customers. I personally dislike the idea of tying phones with providers, as it limits consumer freedom. I find consumer freedom a very important asset, as most of the time, I am a consumer. In The Netherlands, you can get the iPhone with any provider you want, and this could allow me to pick the best provider for my location, and match it with the phone I want (that is, if I were to actually want an iPhone).
The iPhone is obviously not the only tied phone, but it is the most prominent.