DOJ said to investigate AT&T, Verizon over wireless collusion claim

Sheri Evans
April 22, 2018

Shares of AT&T dropped Friday after the New York Times reported the Department of Justice opened a, anti-trust investigation into coordination by the carriers to "hinder consumers from easily switching wireless carriers". The potential collusion is over a technology called eSIM, which lets people remotely switch carriers without having to get a new physical SIM card.

In February, the department sent civil investigative demands to the four major US wireless carriers - including T-Mobile and Sprint, and GSMA. The investigation began five months after one device maker and one wireless carrier filed complaints of collusion to the Justice Department.

At the same time, the Justice Department is suing AT&T to block its $85.4 billion merger with Time Warner.

The accusations regarding this issue are much ado about nothing. The Justice Department declined to comment on the matter to the NYT.

Consumer advocates learned in February that Verizon was apparently planning to lock phones as an anti-theft measure, and later were told by industry participants that Verizon was working with AT&T in hopes of convincing the GSMA to create a standard for locking the phones, according to Harold Feld, a senior vice president at Public Knowledge.

CNN's video below covers why the AT&T Time Warner trial matters.

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Most mobile phones use SIM cards, which contain unique identifying information about a user and are inserted into the devices so the phones can function.

Apple has been including eSIM technology in its iPads for some time now, and began offering it with its Series 3 cellular Apple Watches as well. Google's Pixel 2 smartphones and Microsoft's Surface devices also use eSIM tech, hinting that these companies may have had reason to file complaints as well.

The "technical capability" highlighted by the Justice Department concerns the development of eSIMs - a relatively new technology that could someday allow consumers to switch wireless providers with little more than a few taps on their smartphone screen.

"An eSIM, or embedded SIM, stores the data on the device itself", said Ferras Vinh, a policy lawyer at the Center for Democracy and Technology.

"There is a constant problem with industry standards-setting organizations that on the one hand allow the industry to come together for the objective of efficiency but can be very anti-competitive and operate in secrecy", Feld said.

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