However, I'm now starting to see some datapoints that don't support this historical norm. Most of these are driven by customers that want more options and less costs, but some are being driven by technological change. And now rides in our friendly government regulators. Here is the story from Amol Sharma at the WSJ:
The Department of Justice has begun looking into whether large U.S. telecommunications companies such as AT&T Inc. (T) and Verizon Communications Inc. (VZ) are abusing the market power they have amassed in recent years, according to people familiar with the matter.
The review, while in its early stages, is an indication of the Obama administration's aggressive stance on antitrust enforcement. The Justice Department's antitrust chief, Christine Varney, has said she wants to reassert the government's role in policing monopolistic and anticompetitive practices by powerful companies.
The law that covers such behavior, the Sherman Antitrust Act, has been used in the past against giants ranging from Standard Oil to Microsoft Corp. It lay essentially dormant during the Bush years, with the agency bringing no major case. The telecom industry is among several sectors now coming under scrutiny. Others include health care and agriculture.
The Justice Department is already cracking down on certain agreements. It recently filed an objection to plans by airlines in the global Star Alliance to cooperate more closely on international routes and fares. It has targeted payments large pharmaceutical producers sometimes make to generic-drug makers to delay cheap copies of medicines. In addition, Ms. Varney is investigating Google Inc.'s settlement with authors and publishers over its Book Search product.
The telecom review isn't a formal investigation of any specific company, and it isn't clear it will ever become one. The review is expected to cover all areas from land-line voice and broadband service to wireless.
One area that might be explored is whether big wireless carriers are hurting smaller rivals by locking up popular phones through exclusive agreements with handset makers. Lawmakers and regulators have raised questions about deals such as AT&T's exclusive right to provide service for Apple Inc.'s iPhone in the U.S. Big carriers say limiting exclusive deals would hurt innovation.
The department also may review whether telecom carriers are unduly restricting the types of services other companies can offer on their networks, one person familiar with the situation said. Public-interest groups have complained when carriers limit access to Internet calling services such as Skype.
Second, Apple is talks with Verizon about creating a CDMA iPhone. Verizon turned down the iPhone a couple of years ago. There is lots of speculation as to why. Now,
Third, the DC Metro is going offer wireless service to more than one carrier? I missed this news when it first came out in March, but I think it's so significant that I'm going to list it here anyway. As many of you know, the one mobile service that operated inside the Metro is Verizon, working off of a Bell Atlantic contract they first won back in 1993. Sprint was allowed to roam there recently, but a lot of DC people wouldn't switch away from Verizon because of the lack of service in the Metro (where a lot of suits spend a lot of time). As Rob Pergoraro says in a WaPo Faster Forward blog post:It cannot have escaped Verizon's notice that AT&T proclaimed in a widely circulated memo that the recent launch of the iPhone 3GS was the "largest order day in att.com history" and the "best ever sales day in our retail stores." AT&T sold a million of the new iPhones in 3 days. It took 74 days to sell a million iPhones when they were first launched in 2007.
With AT&T's exclusivity agreement due to expire in the next year, pressure is mounting amongst Verizon customers and shareholders for Verizon to come to some sort of agreement with Apple to offer the iPhone on their network.
Pressure is also coming from current AT&T iPhone users for Verizon to offer the device, as dissatisfaction with AT&T's coverage, and especially their DaVinci Code-ish billing practices continues to grow.
And it looks like the rollout of the network will happen reasonably fast, according to WMATA's press release:
I'm pleased and amazed by the news... although I'm not exactly an unbiased observer of this situation. I take Metro to work and to many non-work occasions, and being able to use my phone at those times -- to let my wife know that I'm on my way home, to answer a quick call from the copy desk, to scan through the latest updates on Twitter or Facebook, to check my e-mail, to look up the score of the Nats game -- is a major convenience.
Twenty of the busiest underground rail stations will have expanded cell phone service by the end of this year and the entire rail system will be equipped by 2012.I'm not sure what this all means but it feels like the the glaciers are starting to crack and shift. What do you think?
