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Key Antitrust Lawmaker Wants US Cell Phone Sector Scrutiny
6:57 pm ET 07/06/2009- Dow Jones

By Fawn Johnson
Of DOW JONES NEWSWIRES

WASHINGTON (Dow Jones)--The chairman of a Senate antitrust panel is asking the Justice Department and the Federal Communications Commission to embark on a wide-ranging antitrust inquiry into the cell phone industry.

Senate Judiciary Antitrust Subcommittee Chairman Herb Kohl, D-Wis., on Monday sent letters to FCC Chairman Julius Genachowski and DOJ Assistant Attorney General Christine Varney, saying four wireless carriers control over 90% of the cell phone market. Those companies are Verizon Wireless, AT&T Inc. (T), Sprint Nextel Corp. (S), and T-Mobile USA.

Verizon Wireless is a joint venture of Verizon Communications Inc. (VZ) and Vodafone Group PLC (VOD). T-Mobile is a unit of Deutsche Telekom ADR (DT).

Kohl's letter comes on the same day that the Wall Street Journal reported that the Justice Department is considering an antitrust investigation into the telecom industry as a whole.

Kohl offered up a laundry list of to-do items for the FCC, including new requirements that carriers offer reasonable rates to others for roaming on each other's networks, stopping exclusive deals between handset manufacturers and carriers, and improving competition in the so-called "special access" market, in which wireless companies pay to connect to the main arteries for phone and Internet connections.

For the Justice Department, Kohl urged regulators to "closely examine the cell phone industry to insure that dominant carriers do not take action to stifle competition."

One of Kohl's main questions in this arena involves text messaging, where he notes that the price of individual text messages doubled for all four top wireless carries in two years. "These identical price increases are hardly consistent with the vigorous price competition we hope to see in a competitive marketplace," Kohl's letter said.

-By Fawn Johnson, Dow Jones Newswires; 202-862-9263; [e-mail]

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(END) Dow Jones Newswires
07-06-09 1857ET
Copyright (c) 2009 Dow Jones & Company, Inc.





WSJ: Justice Dept. reviewing big telecom
4:06 pm ET 07/06/2009- Associated Press Online
The Justice Department is starting a review of whether the largest U.S. telecommunications carriers engage in anticompetitive behavior, the Wall Street Journal reported Monday.

The inquiry, as yet informal, may look at whether consumers are hurt by the long-term exclusivity agreements carriers like AT&T Inc. and Verizon Wireless sign with cell phone makers, according a report on the newspaper's Web site on Monday.
The Federal Communications Commission has already said it will look into exclusive handset deals.

Most exclusivity agreements last for six months or less, but AT&T is still the only U.S. carrier to sell Apple Inc.'s iPhone two years after the first model's launch, which has drawn attention.

The Justice Department could also look into whether carriers are unduly limiting the applications that they allow to run on their wireless networks, according to the Journal. The carriers generally don't allow applications like TV streaming, saying they would take up too much air time and slow down access for other users.

Gina Talamona, spokeswoman for the Justice Department's antitrust division, declined to comment on the Journal's report. Verizon spokesman David Fish said the company had no indication that a review had started. A call to AT&T was not immediately returned.

Verizon Wireless, the country's largest wireless carrier, is a joint venture of Verizon Communications Inc. of New York and Vodafone Group Plc of Britain. Verizon Communications shares rose 18 cents to close at $30.36.

AT&T shares gained 21 cents to $24.80.