July 06, 2009, 6:04 PM — Here are a couple of fun, and potentially surprising, facts. The Department of Justice didn't launch a single major prosecution under the Sherman Anti-Trust Act during the Bush Administration. And between the two of them, AT&T and Verizon control 60 percent of the country's wireless subscribers. Do you smell a potential connection?
That info comes from this Wall Street Journal article, whose author hears whispers of a DoJ review of the telecom industry. Specifically, they're investigating whether the market power these two firms have gathered over the last decade has been "abused." The one specific example given? "In recent weeks lawmakers and regulators have raised questions about deals such as AT&T's exclusive right to provide service for Apple Inc.'s popular iPhone in the U.S."
Now, the question is, what exactly could the DoJ do about it? Surely nothing dramatic, like a forced breakup of AT&T, is in the works; a Clinton-era DoJ lawyer quoted in the article noted that there isn't a dominant player in the market, a duopoly not being anywhere near the same thing as a monopoly. But if exclusive contracts like the one between Apple and AT&T were invalidated, one might wonder if there would be a certain feeling of relief within Cupertino? Realistically, it wouldn't mean the much-awaited Verizon iPhone, at least not right away -- there's still the pesky CDMA problem -- but even if a little GSM player like T-Mobile were able to start selling the phone, that might up the competitive pressure on AT&T to improve their service and offer conspicuously lacking features like tethering.
(Of course, if the Microsoft trial was any indication, any such prosecution will wind on so long and so ponderously that by the time a verdict is reached, the industry will have changed to the extent that the remedies ordered will be completely detached from current reality. Sorry, T-Mobile hopefuls.)
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