Comments on: US DOJ Investigating Wireless Carriers

Legal ScalesThe Wall Street Journal has a report out today that claims the US Department of Justice has begun an initial review to determine whether large U.S. telecom companies such as AT&T Inc. and Verizon Communications Inc. have abused their market power.

The article cites people "familiar with the matter" and says that the review is in its very early stages. They are looking at complaints of anti-competitive practices, exclusive phone deals and whether or not carriers are unduly restricting the types of services other companies can offer on their networks.

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Do they really need to 'review' this?

pmjoe @ 7/6/2009 1:14:58 PM # Q
Isn't it blatantly obvious?
RE: Do they really need to 'review' this?
DarthRepublican @ 7/6/2009 1:40:55 PM # Q
Not when lobbyists are involved...
Screw convergence
Palm III->Visor Deluxe->Visor Platinum->Visor Prism->Tungsten E->Palm LifeDrive->Palm TX->Palm Pre
Visor Pro+VisorPhone->Treo 180g->Treo 270->Treo 600->Treo 680->T-Mobile G1->Palm Pre
RE: Do they really need to 'review' this?
pmjoe @ 7/7/2009 4:13:04 AM # Q
Well, if they're going to let the lobbyists get involved, I don't want them wasting my $$$ "reviewing" it. What the carriers are doing is blatantly obvious.

Either fix it, or admit you're in the lobbyists' back pockets and don't. End exclusivity, end carrier locking, and make the carriers compete on the services they actually provide.

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hey liberals and socialists

Gekko @ 7/7/2009 10:40:48 AM # Q

why can't i sell the phone that i developed through the channels and carriers that i choose? why should the government interfere and tell me what to do? my R&D dollars and risk capital created the phone - you have no right to tell me who i choose to partner with in order to maximize ROI. phones are not monopolies.
RE: hey liberals and socialists
freakout @ 7/7/2009 5:19:21 PM # Q
Phone exclusivity deals seem fine and dandy and I don't really understand why they're an issue. But from what I read, U.S. consumers get screwed pretty severely by the carriers in ways that would never fly in other parts of the world (i.e. getting charged just to receive SMS).

(Broad, sweeping generalisation alert!)

One thing that never ceases to amaze me about the US: you folks seem so suspicious of the governments you actually have a say in, but are perfectly willing to let money-hungry corporations (which you have no control over) run roughshod in the name of an imaginary "free market".

Any human institution is by nature corrupt - governments, corporations, religions, you name it. The difference is whether or not you have a mechanism to effect change when that corruption becomes rampant. In the case of goverments, you've got the vote, and a local representative who is (ostensibly) obligated to listen to your views. Corporations? All you've got is your wallet, which makes no difference at all when millions of others are eagerly opening theirs up. Which is why antitrust laws exist in the first place.

So I guess what I'm trying to say is: how on Earth could a public investigation into the companies on which a country depends for one of its most fundamental needs - communication - be seen as a bad thing?

RE: hey liberals and socialists
PV1 @ 7/7/2009 5:53:26 PM # M Q
Same can be said about government when you have millions of uneducated voters too lazy to become familiar with the isues and rather spend their time watching Idol and MJ's funeral.
RE: hey liberals and socialists
DarthRepublican @ 7/8/2009 3:17:46 PM # Q
You are assuming that phone companies like Palm are happy with the current arrangement. When they were trying to introduce the Foleo, Jeff Hawkins and other Palm executives complained about having to conform to the specifications of the carriers. They've complained in the past of carriers not "getting" their products. Just because things are a certain way it doesn't mean that everybody is happy about the way things are.
Screw convergence
Palm III->Visor Deluxe->Visor Platinum->Visor Prism->Tungsten E->Palm LifeDrive->Palm TX->Palm Pre
Visor Pro+VisorPhone->Treo 180g->Treo 270->Treo 600->Treo 680->T-Mobile G1->Palm Pre
RE: hey liberals and socialists
DarthRepublican @ 7/8/2009 3:44:43 PM # Q
phones are not monopolies.

They are if your choice of phone is limited by the strength of individual carriers in your area. My father lives in rural Texas and the only carrier that works in his home is AT&T. I'm on T-Mobile (maybe not for much longer if I can continue to get consistently good coverage from Sprint on my Pre) and I have to leave the house if I want to make a call. Meanwhile, I live in Chicago where for a long time I couldn't have used a Sprint phone if I wanted to because service was so bad here. It's one reason why I never got a Centro. I likes the little phone but I wasn't going to pay $350 for an unlocked one and I wasn't ready to switch carriers to get a $99 model. It took the Pre to get me to switch carriers. If it's "socialist" to want a phone that works with minimal hassles then we have two very different definitions of that word.
Screw convergence
Palm III->Visor Deluxe->Visor Platinum->Visor Prism->Tungsten E->Palm LifeDrive->Palm TX->Palm Pre
Visor Pro+VisorPhone->Treo 180g->Treo 270->Treo 600->Treo 680->T-Mobile G1->Palm Pre

RE: hey liberals and socialists
nastebu @ 7/9/2009 6:39:15 AM # Q
Freak is damn right about the weird American willingness to surrender rights to big corporations.

I'll add also that, despite all the rhetoric, both parties like big government, Republicans and Democrats alike. George Bush II and Ronald Reagan both presided over eras of rapid growth in government spending. It's just *which* big government that the parties divide on. The Democrats tend to go for things like laws regulating business and enforcing civil rights, and spend on social welfare programs. The Republicans like laws that add government control over social behaviors like marriage and abortions, and spend madly on the military. And everyone likes health care and social security benefits.

(I'm a leftist from a military family so I like spending on everything. Raise my taxes please!)

RE: hey liberals and socialists
tmd @ 7/9/2009 10:23:46 AM # Q
It's a review of a practice that may be anti-competitive to an unfair level that is hurting the consumer and the state-of-the-art.

It's the government's job to undertake this review.

If you want to bitch, bitch after something has been decided, there is clearly enough here to have an argument.

The USA was founded to get out from the yoke of corporations as much as the monarchy. Check out the Boston Tea Party.

Thomas Jefferson: "I hope we shall crush in its birth the aristocracy of our moneyed corporations which dare already to challenge our government in a trial of strength, and bid defiance to the laws of our country."

Other countries have found that there is a middle ground - the cheaper deals with contracts can be offered, but phones must also be available unlocked.

I feel that Apple should not be allowed to cancel it's support for their product if you use it on a different carrier than AT&T. I think that level of tie-in should be made illegal.

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Change you can believe in!

PV1 @ 7/7/2009 12:22:09 PM # Q
Great reply Gekko, thank the 1st 3 commenters for the nanny state we currently find ourselves in. Big government does such a great job. I'm sure DOJ could find a better use of it's time and resources.

Palm T3, Vx, Sony Clie NX70V, T665C, N710C

RE: Change you can believe in!
jca666us @ 7/8/2009 4:23:49 AM # Q
Agreed, instead of giving a shit about the recession, they are instead looking into this nonsense!
RE: Change you can believe in!
DarthRepublican @ 7/8/2009 3:27:43 PM # Q
I'm responsible for the "nanny state" we live in just because I don't want to switch carriers every time I see a new phone I like? For that matter what nanny state? It's not much of a nanny state when I can buy children's toys with lead but can't buy decent health insurance.
Screw convergence
Palm III->Visor Deluxe->Visor Platinum->Visor Prism->Tungsten E->Palm LifeDrive->Palm TX->Palm Pre
Visor Pro+VisorPhone->Treo 180g->Treo 270->Treo 600->Treo 680->T-Mobile G1->Palm Pre
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This is total BS

jnuneznj @ 7/7/2009 12:34:05 PM # Q
What's next? Mario only appears on Wii? TruBlood not available on NBC. Don't get me started on Sports and why is NY1 only on Time Warner? Exclusivity is in every other market why are they messing with the phone?
RE: This is total BS
DarthRepublican @ 7/8/2009 3:33:58 PM # Q
I don't freeze to death if my car engine dies on a country road in the middle of winter and I can't get a signal on my Sprint Wii. That's the difference. Communication is a necessity of modern life and entertainment is a luxury.
Screw convergence
Palm III->Visor Deluxe->Visor Platinum->Visor Prism->Tungsten E->Palm LifeDrive->Palm TX->Palm Pre
Visor Pro+VisorPhone->Treo 180g->Treo 270->Treo 600->Treo 680->T-Mobile G1->Palm Pre
RE: This is total BS
tmd @ 7/9/2009 12:27:22 PM # Q
The practice is being reviewed because the possibility exists that the exclusivity is keeping consumers from being offered a wider range of products. It is being lookes as a possible anti-competitive tie-in.

Your attempts at paralells are idiotic.Think of a land-line phone made by Uniden. Would Uniden be allowed to refuse you service based on your local carrier? Should it be allowed in mobile phone business. Should AT&T get to unilaterally decide what features a supported iPhone can have in the US?

It's a review. It's their job to look at it. It's not a decision.

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Waste of Time and Money

Scotland @ 7/8/2009 5:07:29 PM # Q
The government can throw its weight around and potentially get the carriers to change their policies but it doesn't have much backing from a legal perspective. Any such lawsuit the DOJ would bring would be a big waste of taxpayer money as the DOJ would surely lose (they've lost far better cases).

There are plenty of "substitutes" as far as handsets go. Even Apple's iPhone being exclusive on AT&T has substitutes - the evolution of the whole "hero" handset concept brought into vogue by iPhone has created room for competing "hero" handsets at rivals - would Palm's Pre and Blackberry's Storm had as big an opening if iPhone was already available on each of those carriers? Only Apple knows whether the handset share lost by being exclusive to AT&T is made up for by the financial benefits they receive in return.

As for whether large carriers are hurting smaller carriers - the larger carriers are not declared monopolies (and couldn't be declared such under any anti-trust definition - last time I checked there were 4 major US carriers and none of them had over 50% share) so the same standard of "harm" does not apply. If you wanted to charge the large carriers of collusion to prevent the smaller companies from gaining share (i.e forming an illegal trust/cartel), you would need some pretty good evidence of that (i.e. smoking gun emails from rival execs detailing out such a plan).

So, in the end, this is just Pols being Pols (some voters are mad, so let's throw them a bone) and the regulators toeing the line.

P.S. Note to the DOJ and Washington (in general) - if you really want to foster greater competition, you might try not being so quick to approve any additional mergers involving any of the Big 4 carriers going forward... After approving every Telcom merger for the last few years like there was no tomorrow, it's kinda hard to claim the large carriers are too large now, isn't it???

RE: Waste of Time and Money
Marshall Flinkman @ 7/9/2009 8:03:24 AM # Q
It's true that there is no carrier that could be considered a monopoly. However, the government might argue that there is a duopoloy (that AT&T and Verizon have the lion's share of subscribers) or a quadropoly and bring in all 4 national carriers. Or, they might argue that the system/culture, as it has evolved, is slanted in favor of the national carriers, giving them an unfair advantage even if it's still far from a monopoly.

Plenty of people are ticked at having to choose between coverage and their phone of choice-whether choosing between national and regional carriers or 2 national ones. Whether or not an effective legal case can be made, though, is still to be seen.

RE: Waste of Time and Money
Scotland @ 7/9/2009 8:50:42 PM # Q
All of what you say *could* be true. However, that does not make any of it illegal and therefore the government has no case. The Sherman anti-trust act states that you not only have to have a monopoly - which isn't in and of itself illegal (but it doesn't really matter since none of these companies have anywhere near enough market share to be considered a monopoly) - but that company ALSO has to abuse that monopoly position.

The other possible infringement is at least two companies with significant market share/power would form a horizontal "trust" (i.e. collude with their competitors) to thwart other (smaller) competition. The government would almost certainly find no evidence of that - any decently sized company has policies in place (mandatory training as well as internal controls) to prevent that. It would also be patently stupid of any of the major carriers (ATT and Verizon) to do it given how much money they are already making without resorting to this tactic (the risk/reward is way too high). There is limited competition basically guaranteed by the wireless spectrum auctions that the government itself set up. The carrier that licenses the spectrum has guaranteed income from their own operations or from reselling the spectrum to others (i.e. roaming charges). Each company just needs to ensure that they don't overbid for spectrum, stay current with competitors as far as how they use the spectrum (e.g. upgrade their networks to increase download speeds) and have efficient operations.

If the government really wanted to foster competition, they would have prevented the various mergers of the last 10 years and also have gone with a more aggressive open spectrum licensing scheme like what was proposed by Google. That would have meant more competitors but also might have hindered future investment if none of the companies had sufficient revenues/margins to upgrade their networks.

This case is somewhat laughable given that mobile phone service has much more competition (4 nationwide carriers) than local broadband service where you are lucky to have even 2 (DSL and Cable competing against one another).

RE: Waste of Time and Money
joad @ 7/11/2009 1:13:21 PM # Q
A strange country, this present USA. We are in the midst of a crisis of massive proportion, taken down by organizations that were allowed to become "too big to fail." In other words, they have usurped too much power from We The People.

With all the rhetoric of how great and innovative and diverse Americans are, we have only 3-4 major cell phone carriers, 2 broadband suppliers, and 2 political parties - nearly all duopolies with only minor differences in branding being their key distinction from each other. "Too big to fail," indeed.

And they have been working overtime to convert the Commonwealth into private hands. When their schemes aren't as profitable as they hoped, they come to us for bailout money.

In the big view, these silly handset questions aren't very important. However, they do let light shine through to the common people that they are being held upside down and shaken for everything. For some, this is the "advertising on the urinal cake" awakening.

Palm "Preh": as in "eh, where's the microSD and Garnet emulator?"

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