Thu Jul 09, 2009 3:45 pm
Telecom giant AT&T today fired back at the Justice Department, saying the government's concerns about a lack of competition in the wireless industry were unfounded.
Earlier this week, the Justice Department began an inquiry into whether large U.S. carriers such as AT&T and Verizon have engaged in anticompetitive behavior -- keeping texting prices high, signing exclusive deals to sell popular handsets like Apple's iPhone and failing to cooperate with smaller rivals to resolve roaming disputes.
"U.S. wireless prices are much lower than in any other major industrialized country -- dropping almost 70 percent since January 2007," said James Cicconi, AT&T's senior executive vice president.
He added that exclusive handset agreements allowed carriers and phone makers to share the high cost of marketing "an inventive but unproven new device."
"AT&T followed FCC regulations -- requiring it to let rival customers roam to get voice service but not data," said Cicconi. "There is no evidence of a market failure that would justify the massive government intervention into pricing, contracts, marketing, and investment that your letter postulates."
Lawmakers are also looking into whether carriers have unduly restricted applications -- such as Internet calling service Skype -- that run on their networks. AT&T has limited TV streaming applications, arguing that it would slow down access for other customers.
The Sherman Antitrust Act, the law that covers monopolistic behavior, has been used in the past against industry giants such as Standard Oil and Microsoft.
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