U.S. investigating AT&T and Verizon over claims of wireless collusion

Apple iPhone 6

Apple iPhone 6

According to a New York Times article that landed Friday afternoon, the Department of Justice has opened an antitrust investigation into collusion between Verizon and AT&T's wireless arms.

Sprint declined to comment, and representatives for Verizon, T-Mobile and the GSMA did not immediately respond to requests for comment. "We've been proactively and constructively working with the Department of Justice for several months regarding this inquiry and we continue to do so".

A Justice Department spokesperson declined to comment, saying in an email that "as a matter of policy, the Department of Justice does not confirm, deny, or otherwise comment, on the existence or nonexistence of investigations".

Most phones now require a SIM card to work with a particular carrier, but eSIM, the report noted, would make it possible for people to switch carriers without buying a new SIM card. This would make it impossible for customers to switch carriers and runs counter to the goal of eSIM.

Verizon and AT&T fell on the news.

The investigation is said to be focused on AT&T, Verizon and the GSM Association, a London-based group that represents the interests of wireless carriers globally, The New York Times reported, citing sources familiar with the matter. Verizon closed down 1.1 percent to $47.90 after losing as much as 2.5 percent.

News of the investigation comes at the same time as the Justice Department is suing to block an acquisition of Time Warner by AT&T. Read the NY Times report here.

Consumer advocates support the idea of an electronic SIM card, which is in the process of being rolled out, since it allows phone owners to bargain hunt and contract with any network or to shift networks easily while traveling, said Feld.

"Standards-setting bodies are both extremely valuable, and create an opportunity for collusion", said John Bergmayer, senior counsel at Public Knowledge, an advocacy group focused on copyright, telecom and the internet. While the iPad does have the technology, not all carriers use it.

Anonymous sources told the NYT that official complaints were filed roughly five months ago, and two months ago the DOJ issued demands to AT&T, Verizon, and the GSMA.

Observers of the trial say AT&T appears to have an advantage after exposing weaknesses in the government's pricing power claims.

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