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Justice Department To Review Telecom Competition: Report

7/06/2009 03:51:12 PM Eastern

Washington - The
telecom industry took a low-key stance following a report that the Department
of Justice might investigate the competitiveness of the U.S. telecommunications
industry, including wireless carriers.

The report
followed an announcement
by the FCC last month that it would investigate whether competition and
consumers are harmed by a commonplace practice in which the largest cellular
carriers get exclusive access to popular handsets.

The Wall Street
Journal reported that the Justice Department began an "initial review"
to determine whether large telecom companies have engaged in anticompetitive
practices in multiple markets, including landline and wireless. The report said
the review is "in its very early stages," that no particular company is the
subject of the investigation, and that it wasn't clear whether an official
inquiry would ever be launched.

Exclusivity dealers between wireless carriers and handset makers
could be one of the practices that the department could investigate, the report
said.

For its part, the CTIA-The Wireless Association described the
Justice Department's reported plans as an "informal review" and said the
association would not comment at this time.

At AT&T Wireless, a spokesman said the company is "not aware of any formal investigation by
the Department of Justice, nor have they asked us to provide any information."
The spokesman went on to say that "the U.S. wireless industry is highly
competitive and, as a result, delivers terrific innovation, many choices and
attractive pricing for all customer segments."

At Verizon Wireless, a spokesman said, "We haven't received any notice or inquiry from the Department of
Justice on this matter."

One public interest group is pleased with the report. Gigi Sohn, president and co-founder of Public Knowledge, commended the
Justice Department "for taking a new look at potential antitrust issues in the
telecommunications industry, reportedly focusing on the largest carriers." She
contended that "consumers have suffered over the past 10 years as the industry
has consolidated and strengthened its hold over which services can be offered
and which equipment can be used. Competition is almost non-existent in crucial
services for home and business use."

The inquiry, she
said, "is long overdue."

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