Issue #1: Exclusive device deals
A story published by the newspaper today cites sources that say Justice could explore "whether wireless carriers are hurting smaller competitors by locking up popular phones through exclusive agreements with handset makers."
The Apple Inc. (Nasdaq: AAPL) iPhone's exclusive arrangement with AT&T Inc. (NYSE: T) could be seen as a catalyst here. That is, unless someone, somewhere, is still sore about Cingular (now part of AT&T) getting the first crack at the awful Motorola Inc. (NYSE: MOT) Rokr music phone, back in 2005.
Issue #2: Service restrictions on networks
But device exclusivity may not be the only issue here. The paper also cited a single source that claims Justice "may also review whether telecom carriers are unduly restricting the types of services other companies can offer on their networks."
AT&T, for example, has noted that it blocks peer-to-peer (P2P) applications on its wireless network. (See Et Tu, AT&T? )
The WSJ's full story, complete with no comments from the Justice Department, AT&T, and Verizon Communications Inc. (NYSE: VZ), is here.
For a quick refresher on how the iPhone's popularity has helped AT&T's profits (while sometimes skinning its margins) in the U.S., see:
- Apple Sells 1.7M iPhones in Q2
- The iPhone's Fat ARPU
- iPhone Hits AT&T Margins
- AT&T: Another Bumper iPhone Quarter
- New iPhone Costs $179 to Build