Building an antitrust case against Big Telco may not be easy. The Justice Dept. is in the early stages of a review aimed at determining whether the largest U.S. telecommunication service providers are impeding competition, The Wall Street Journal reported on July 6, citing people familiar with the matter.
But before this inquiry turns into a formal investigation or results in charges against companies, the government will need to amass evidence that rivalry has been stymied and consumers harmed. That could prove challenging, legal experts and former government officials say. “There’s no obvious antitrust case to me,” says Donald Russell, an attorney who was chief of the telecommunications task force at the Justice Dept. until 2001.
A big concern for regulators and lawmakers is the industry’s affinity for partnerships that wed a particular wireless handset to a single service provider, such as the arrangement whereby AT&T is the sole distributor of Apple’s iPhone in the U.S. Smaller service providers say these deals bar them from selling some of the hottest phones on the market. Consumer advocates allege they limit consumer choice; the iPhone is of little use to a Verizon Wireless customer, for instance. The Federal Communications Commission has agreed to examine whether handset exclusives harm consumers and stifle competition.
Law Experts Are Skeptical
Yet, exclusive devices account for only a small percentage of overall mobile device sales, making it hard to prove they give one carrier an undue advantage over rivals. In June, Apple iPhone’s had 8 percent of retail sales at the nation’s largest carriers, according to a survey from Avian Securities. That month, of about 600 handsets available through all U.S. carriers, only 14 were exclusive to a given carrier, mobile service providers say. There’s no question that AT&T has benefited from its pairing with Apple, attracting more than 1.2 million…