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Dept. of Justice May Investigate AT&T over iPhone Deal

The unusually long contract between Apple and AT&T for the sale of the iPhone may prompt the Department of Justice to look into charging large telecom providers with anticompetitive practices. According to the Wall Street Journal, rumors inside the DOJ suggest that investigators will be looking at how large mobile providers like AT&T and Verizon restrict the way devices and services are used on their networks. Justice has yet to make a formal announcement. (Below, the T-Mobile G-1, one of DT's exclusive Android devices sold in the U.S.)


According to PCWorld, consumer groups have hailed the hearsay as a long-awaited chance at equitable treatment for customers, many of whom have suffered as the wireless industry went through consolidation after consolidation, force-feeding them service plan price hikes. But the real locus of outrage for members of Congress has been the long-term exclusivity deals that OEMs make with service providers. Smaller rural operators argue that when the big boys make deals with top phone producers, their customers are unfairly precluded from buying the latest and greatest devices.

Particularly interested in the issue is Sen. John Kerry (D-MA), who oversaw recent hearings in which representatives from AT&T attempted to explain how their long-term deal with manufacturers promote innovation in the industry. Kerry called the review of the telecoms' practices "the kind of healthy oversight we want to see." AT&T hasn't disclosed the actual length of its deal with Apple, but many industry insiders speculate the relationship will cease to be exclusive in 2010.

[Via PCWorld]