Telecom Timeout

Jul 8 2009   4:33PM GMT

DOJ aims at AT&T, Verizon but is much at stake?

WPeterson William Peterson Profile: WPeterson

For telecoms, the jury is out on Obama, but the judge might soon stroll in for them: The Wall Street Journal reported that the Department of Justice (DOJ) has begun an investigation into whether service providers are abusing market power, as part of a strong anti-trust stance the administration has been generally taking.

But do carriers, wireless and landline alike, really have much to worry about? The initial media flurry makes it sound like Attorney General Eric Holder just wants his (and everyone else’s) iPhone on Verizon or any other network of their choice, and if that’s the goal, the end result will likely be negligible. Carriers like Verizon have promised open networks already. Are they dragging their feet? Absolutely, but if there’s anything to make telecoms look nimble, it’s the pace of federal bureaucracy. This is, after all, the same government that just found time to confirm the new FCC head Julius Genachowski a little over a week ago, despite sterling credentials and little pushback.

By the time device/network independence is mandated, and the government figures out exactly how bad it will muck it up, service providers will be on LTE and WiMax, both of which have promised the exact same model of device independence. In the meantime, as BusinessWeek’s Stephen Wildstrom reports, U.S. technical standards and implementations make it almost impossible for users to switch their phones across networks willy-nilly anyways, and if they do, they are likely to be rewarded with greatly reduced performance.

So what is it that Holder, and Sen. Herb Kohl (D-Wis.), want from telecoms? The Wall Street Journal’s article is maddeningly scarce on details, but we’ll take a close look at the major players involved over the next few days as we try to parse exactly what the battle brewing between AT&T, Verizon, and the DOJ could look like.

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