Department of Justice casually looking into abuses of power by big carriers?
by Chris Ziegler 
posted Jul 7th 2009 at 7:59AM
Word on the street has it that the US Department of Justice has started informally looking into whether top carriers have gotten all antitrust-y on us, specifically investigating hardware exclusives and restrictions on the services third parties can offer on the network (open access, anyone?). The carriers potentially being called into question here -- most likely Verizon and AT&T, seeing how they're the largest by a long shot and have both made recent acquisitions to beef up their footprints and positions -- say that they've received no notices of investigation, so if this is really happening, it's still in the earliest stages. Beefs over handset locking and exclusivity are nothing new and have come from governments and competitors alike -- but considering the price flexibility they ultimately give carriers on the front end, they've still got a place in the hearts and minds of consumers who put a premium on (perceived) value and instant gratification. It remains to be seen what'll happen to pricing when you can't promise your carrier you won't run off with its subsidized gear the next day, but we can't imagine it'll be good.
Filed under: ATT, Verizon Wireless
Reader Comments (Page 1 of 1)
TBacker @ Jul 7th 2009 8:26AM
IMHO, it seems that competition would become intense. Not only do the carriers have to compete purely based on their network coverage, reliability, and customer service, but they would want to be a few bucks cheaper on handsets than the next guy.
The only losers here may be the small carriers, ironically, as they would have poorer coverage, and fewer financial resources to subsidize handsets to compete with big red and big blue.
Mack Swift @ Jul 7th 2009 9:48AM
Wouldn't surprise me if they were; what with the FCC and FTC sniffing around them as well. Its ridiculous really. People have an unlimited data plan on my phone, but I also have unlimited text as well for an extra cost. But isn't text also data? And isn't tethering data as well?
The phone carriers only really compete nowadays with what price subsidized phones they have on their networks and at what price. IMO, they don't compete at all with their network or coverage (although they pretend to). I'm still waving my phone around and getting lousy signal strength like I was 15 years ago.
Nerdherder @ Jul 7th 2009 10:20AM
It's ignorant to think that just because a device wasn't exclusive to one carrier that they still wouldn't subsidize the handset. If anything, having a device on more than one carrier would be great for consumers, the price would actually drop across the board. In addition carriers would fell immense pressure to improve and advance their networks and lousy ones like Sprint would be absorbed by others. Bring on the DOJ, I hope they get busy and crack some skulls.
Eyhk @ Jul 7th 2009 10:51AM
I totally agree. The big carriers have been milking this cow for way too long. Subsidizing with contracts will probably never go away. But if I have "own" (aka unsubsidized, out of contract) a phone, and I want to use it on a certain network that the phone has the ability to work on, why should another network have a say in if I can or cannot? I'm glad that Apple finally broke up the "proprietary" software requirements that networks enforced on the phones. Now it's time to break up the exclusivity. Anybody who's ever heard of AOL should know what "proprietary" and "exclusivity" does to a company. It hinders innovation and keeps you in the stone age while the world passes you by.
Live and learn people, and try not to screw yourself over by repeating mistakes already made by others.
On the other hand, oh yeah, the decision makers still make millions in "bonuses" even while the company and all the employees they screwed goes under so why should they care.
SimbaDogg @ Jul 8th 2009 7:11AM
totally agree w/ you guys. as much as i hate the iphone, I WISH that it would jump onto sprint or at&t...or especially t mobile. Even if the handsets were the same price, i'm sure many more people would jump onto sprint or tmobile because of cheaper data/messaging. This would force at&t to bring their absurd prices down, and hopefully bring my monthly data charge down as well. or MAYBE at least have them offer a very very low # of montly limits like t-mobile does (i think their base is like 250 for $30 vs 400 for $40 on at&t.). i'm pretty sure the whole iphone thing was actually something that, believe it or not, john kerry was looking into some months back.
on top of that, i really wish this one senator would hurry and start looking at the cell phone providers, and how they're basically colluding w/ one another double SMS rates (all around the same time) for a feature that effectively costs them nothing.
http://www.nytimes.com/2008/12/28/business/28digi.html?_r=2&partner=rss&emc=rss
bdenglish @ Jul 7th 2009 10:20AM
You can't run off with subsidized gear. They lock you into a two year contract in order to get the subsidized price. You could run off with unsubsidized gear with an unlocked phone but you'd have to pay full price / wait for your contract to end.
troyboytn @ Jul 7th 2009 10:26AM
lousy networks like Sprint? please......give me a break. Sprints network is FAR superior to Verizon and Especially AT&T in particular (I know this from personal experience since I have used all three) and lets not forget that it is FAR cheaper than both. If Sprint were allowed to carry the iphone, it could easily become the largest carrier.
SimbaDogg @ Jul 8th 2009 7:03AM
you're an idiot if you think this is tru. nation wide its a known fact that verizon and AT&T have the best coverage, the best nationwide coverage, and the best 3G coverage as well. AT&T also has hands down the fastest wireless network. All this shit has been independently proven. So quit it with the i have better reception w/ sprint @ my house than the other big two, so they must be better.
Sure they've made a huge push into changing their customer service (which was consistently ranked last out of the big 4 every quarter for about the last two years) but they are by far and away the furthest from being a dominant carrier. One big thing thats still continues to stop them, CDMA and a crappy selection of handsets. I shouldn't even have to bring up the many versions of phones that release on the big 4, only to have their CDMA versions effectively neutered.
StayinClassy @ Jul 8th 2009 12:20PM
troyboytn, i agree with you! AT&T is no longer the great network of their glory days. Verizon and Sprints coverage is fairly comparable. J.D. Power and Assoc. ranked the 4 main carriers and Sprint and Verizon seemed neck and neck. Maybe because they even have roaming agreements with each other in select areas. Only difference between the two CDMA networks is Sprint's network is cheaper each month without crippling their phones. Long live Sprint, and sorry that T-Mobile isn't even in the equation
su2lly @ Jul 8th 2009 11:20AM
I would rather pay $300 for a phone and be able to take that phone to whatever carrier I wanted to then to get a free or $100 phone and be locked in to just one carrier for two years. There won't be true competition until these carriers are forced to stop locking the phones and an end is put to the two year contract.
Beau Meling @ Jul 7th 2009 4:54PM
I like the idea but prices for phones will shoot way up. Especially for higher end phones which my self and alot of people I know carry.
pheer6224 @ Jul 8th 2009 1:50AM
I don't mind the phone prices going up if data, roaming and activation fees go down, 30 dollars a month for 3.6mbps is plain freaking ridiculous.
Clark @ Jul 8th 2009 12:59PM
I don't understand why people are so stuck on this business model. Do these people do all of their shopping on late night infomercials as well?
Getting rid of the subsidized phone would not make our phones more expensive, it would likely end up making all phones cheaper, and having fewer but much better quality phones to choose from.
If you look at the retail price of most of the phones that the carriers sell, you can see that they're ridiculous. No one in their right mind would pay that price. But when we're told that that's the price and we can get 250.00 off if we sign a 2yr contract, we think we're getting a deal (perceived).
There is no way that the phone manufacturer's are going to be able to sell the same phones at their MSRP. The price of all of theses phones would suddenly become much more realistic as people began to hang on to their current phone because it still worked and they didn't see anything worth upgradeing to for $500-800 extra
Bring it on I can't wait.
ecco6t9 @ Jul 8th 2009 7:10PM
So one group of crooks that can't do anything right(except bailing out failed industries) is trying to tell a successful group of crooks how to do business?
Glenn @ Jul 29th 2009 4:48PM
Too bad we're sitting here comparing the worst providers in the world (ATT, Verizon, Sprint, etc.) . We sit here bragging about how good Verizon, Sprint or ATT are great when it comes to coverage plans, etc when as a whole--other countries (especially in Europe) blow us away when it comes to capabilities and opportunities to use cell phones on other networks. DOJ needs to look into the crooked practices of our providers and nail them to the wall--period. What are the chances they will succeed? Probably none. We’ll continue to keep our fingers crossed hoping some day that our services improve and our providers give us a break. I’m just not holding my breath on this one.