Business acumen vs. monopolistic behavior

Industry divided over Justice Department's look into exclusive cellular partnerships

Industry analysis by expert Joanie Wexler, plus links to the day's wireless news headlines

Opinions ranging from the defiant to the upbeat have ricocheted around the Department of Justice's reported plan to conduct an informal review of the exclusivity agreements between mobile network operators and smartphone makers. Most notable, of course, is the highly successful, exclusive Apple iPhone-AT&T marketing partnership in the United States.

Do such agreements represent brilliant business strategies or do they fly in the face of antitrust regulation?

"Is it illegal? Who knows?" says Kevin DiLallo, a partner at telecommunications law firm Levine, Blaszak, Block & Boothby, LLP in Washington, D.C. "Is it lousy for buyers? You bet."

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Opinions ranging from the defiant to the upbeat have ricocheted around the Department of Justice's reported plan to conduct an informal review of the exclusivity agreements between mobile network operators and smartphone makers. Most notable, of course, is the highly successful, exclusive Apple iPhone-AT&T marketing partnership in the United States.

Do such agreements represent brilliant business strategies or do they fly in the face of antitrust regulation?

"Is it illegal? Who knows?" says Kevin DiLallo, a partner at telecommunications law firm Levine, Blaszak, Block & Boothby, LLP in Washington, D.C. "Is it lousy for buyers? You bet."

The legality/illegality question, presumably, is what the Justice Department intends to look into, in the spirit of conducting a hearing to determine if a trial is warranted. Many folks responding to articles in Network World, the Wall Street Journal and elsewhere have been divided in whether the Justice Department's informal investigation reeks of big government becoming an unnecessary butt-inski or whether consumer best interests are seriously at risk with such partnerships.

For example, DiLallo says he would "wager that if more than one carrier offered the iPhone, both the device and the service would be cheaper than what a single supplier facing no competition will offer."

Personally, I think it's laudable for the Justice Department to look into whatever it thinks warrants investigation. In my book, that's called "doing your job." On the other hand, will it find much to muckrake? Likely not.

Carriers face a slippery slope of maintaining enough control to ensure service integrity and performance levels while at the same time attempting to keep the doors to innovation open. Next time, I'll provide some specific food for thought about this and, in the meantime, would love to hear your opinions on the topic.

Read more about wireless & mobile in Network World's Wireless & Mobile section.

Joanie Wexler is an independent networking technology writer/editor in Silicon Valley.