DOJ may bust up AT&T's exclusive deal with Apple's iPhone

The Department of Justice has begun an initial review of the U.S. telecommunications industry to determine whether the two dominant players - AT&T and Verizon, which together control 90% of the U.S.'s landlines and 60% of its 270 million wireless subscribers - are abusing the market power they have amassed in recent years.

According to a report in WSJ by Amol Sharma:

The 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 the market power they've amassed in recent years, according to people familiar with the matter.

The review of potential anti-competitive practices is in its very early stages, and it isn't a formal investigation of any specific company at this point, the people said. It isn't clear whether the agency intends to launch an official inquiry.

Among the areas the Justice Department could explore is whether wireless carriers are hurting smaller competitors by locking up popular phones through exclusive agreements with handset makers, according to the people. 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.

The Justice Department may also review whether telecom carriers are unduly restricting the types of services other companies can offer on their networks, one person familiar with the situation said.

The companies share two directors - Eric E. Schmidt, chief executive of Google, and Arthur Levinson, former chief executive of Genentech.