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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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