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DOJ Takes a Look at Telcom Industry



It is in the early stages and nothing may come of the review but the US Department of Justice is going to take a look at the Telcom industry to see if there is any abuse going on.

Again, things are very early, but the Wall St. Journal is reporting that the DOJ will be looking at exclusivity deals and whether or not Telcos are unduly restricting the type of services that can use the networks.

I agree with the article that it would be tough to bring an anti-trust suit given that there are several large companies and neither really has a market advantage of the rest.   But then again, maybe the pressure from a possible action could bring about some changes.

1 Comment

1 Comment

  1. BW

    07/07/2009 at 6:20 am

    I think you may be missing part of the issue. The DOJ will also be looking into the exclusive deals Telecos sign to carry phones (ala iphone). These exclusive deals allow the telecos to compete based on the phones they provide and not the prices. Instead of carriers saying “I have a cheaper SMS plan” than the next guy they are able to say I have this phone and they don’t. It’s also allowing them to keep smaller more rural carries such as Cricket from carrying phones like the iphone and thereby limiting the people that will give them a second look as a provider. Think about it if you had a choice between Verizion and AT&T and they both carried the iphone who would you go with considering Verizon’s voice plan is 15 dollars a month cheaper. AT&T and Verizon don’t want to have to compete with each other any more than they absolutely have to, let alone have to compete with rural carries that can provide cheaper plans and better coverage in their home areas. If you think about how often the average person (non world traveler) travels outside of their area, carriers like Cricket would stand to gain a greater foothold on their perspective markets if they were able to carry phones like the iphone. In the end we all would benefit from this with better competition, innovation and prices.

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