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DoJ probes reviews US telecom powers

Anti-competitive practices?

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The US Department of Justice (DoJ) has begun looking into whether US telecom giants are abusing their growing market powers.

According to a report published Monday by The Wall Street Journal, the inquiry is merely a preliminary review, falling short of a full-fledged investigation into anti-competitive practices.

The review comes on the heels of two other recent US government actions. Last month, the head of the US Federal Communications Commission instructed his troops to "open a proceeding to closely examine wireless handset exclusivity arrangements that have reportedly become more prevalent in recent years." The day after that inquiry was announced, a hearing was held by a US Senate committee, sparked by a letter from a quartet of US senators, to gather testimony on exclusivity deals.

Whether the new DoJ review is promoted to the status of an investigation or not, its mere existence indicates that Obama & Co. are more interested in keeping an eye on industry consolidation than were the previous occupants of the White House.

During the Bush administration, there was significant consolidation in the telecom industry. In 2005 alone, for example, Sprint acquired Nextel, Verizon gobbled up MCI, and SBC bought AT&T. That administration, however, initiated no major antitrust actions during its eight-year tenure.

But there's a new sheriff in town. The DoJ's antitrust chief, Christine Varney, made the Obama administration's intentions crystal clear in a May speech at the Center for American Progress. Citing "inadequate antitrust oversight" as a contributing factor to the global economic Meltdown, Varney said that "As antitrust enforcers, we cannot sit on the sidelines any longer."

According to the WSJ, the DoJ may be looking not only into exclusivity deals, but also whether telecoms are "unduly restricting the types of services other companies can offer on their networks," such as AT&T's allowing Major League Baseball to stream video over its service, but not Sling Media.

And so with pressure now coming from both the Executive and Congressional branches of the US government, it appears that the window of laissez-faire liberties may be slamming shut for the telecom industry.

At minimum, the days of unexamined mergers and acquisitions appear to be drawing to a close. And also in the government regulators' sights may very well be the atmosphere of freewheeling, unregulated - and possibly anti-competitive - business practices. ®

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