Justice Department opens investigation into wireless carriers

The U.S. Justice Department is probing some of the leading wireless carriers and an industry group over possible coor...

Posted: Apr 21, 2018 5:16 PM
Updated: Apr 21, 2018 5:16 PM

The U.S. Justice Department is probing some of the leading wireless carriers and an industry group over possible coordination to make it harder for customers to switch carriers.

The Justice Department sent a letter in February to the four major national carriers as well as to an industry standards-setting group, GSMA, seeking more information, a person with knowledge of the inquiry told CNN. Not all four are necessarily under investigation, the source cautioned.

The New York Times reported Friday that the Justice Department had opened an antitrust probe into coordination between AT&T, Verizon and GSMA to restrict eSIM, a technology that allows customers to switch carriers without needing to get a new, tiny SIM card.

"We are aware of the investigation into GSMA's process for developing eSIM standards that provide a better experience for consumers," an AT&T spokesperson said in a statement. "Along with other GSMA members, we have provided information to the government in response to their requests and will continue to work proactively within GSMA, including with those who might disagree with the proposed standards, to move this issue forward."

A Justice Department spokesperson declined to comment, saying in an email that "as a matter of policy, the Department of Justice does not confirm, deny, or otherwise comment, on the existence or nonexistence of investigations."

Related: AT&T, DOJ spar over emails and PowerPoints as antitrust trial begins

AT&T acknowledged the eSIM investigation in a statement. "Along with other GSMA members, we have provided information to the government in response to their requests and will continue to work proactively within GSMA, including with those who might disagree with the proposed standards, to move this issue forward."

Sprint declined to comment, and representatives for Verizon, T-Mobile and the GSMA did not immediately respond to requests for comment.

Shares of Verizon and AT&T dipped slightly following the news.

"It's no secret that none of the carriers have been eager to embrace the idea [of eSIM]," says Craig Moffett, a telecom industry analyst at MoffettNathanson.

Unlike traditional SIM cards, which are typically carrier specific, eSIM would let mobile customers switch between the major carriers simply by changing software, according to Moffett.

"A customer that owns a device that can be readily switched from carrier to carrier without even having to bring it in to the store, that's a world that would have much higher churn and lower profitability [for the carriers]," he said.

The eSIM technology is featured on devices made by Google and Apple, including the Pixel smartphone and Apple Watch, respectively.

News of the investigation comes as AT&T is already fighting the Justice Department in court over its blockbuster deal to acquire Time Warner, the parent company of CNN.

Indiana Coronavirus Cases

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Reported Deaths: 13764
CountyCasesDeaths
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Grant7232179
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Ohio Coronavirus Cases

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Cases: 1108146

Reported Deaths: 20122
CountyCasesDeaths
Franklin1286421460
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Butler38951604
Stark33318929
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Wood13287198
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Columbiana9029230
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Pickaway8658122
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Marion8641138
Erie8056164
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Hancock6996132
Ross6943161
Geauga6834150
Scioto6534105
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Sandusky5439125
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Auglaize501887
Mercer487385
Shelby476595
Knox4570112
Madison444065
Ashland435597
Putnam4336103
Defiance432298
Fulton432072
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Brown402461
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Preble3848104
Clinton379166
Ottawa373581
Highland359665
Williams348078
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Guernsey324853
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Perry297350
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Adams243156
Pike242835
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Wyandot234556
Hocking220162
Carroll197148
Paulding176542
Meigs148240
Monroe136344
Noble136039
Harrison114138
Morgan109624
Vinton85517
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