Report: Antitrust scrutiny of carrier deals on iPhone, Pre, Storm

Deals that tie owners of iPhones and other hot telecom devices to a single service provider are reportedly being scrutinized by antitrust regulators.

[ama:iphone,1,new]
The Wall Street Journal reported Tuesday that a review by the Department of Justice is in its early stages but marks the latest sign that the Obama administration is going to be more aggressive on antitrust laws.

The most popular smartphones in recent years have commonly required owners to buy their service from a predetermined telecom provoder. AT&T is the exclusive carrier for Apple Inc.’s iPhone, Verizon for Research in Motion Ltd.’s BlackBerry Storm in the U.S. and Sprint Nextel Corp. has an exclusivity deal for Palm Inc.’s Pre until early next year.

These deals were the subject of Congressional hearings this year in which they were portrayed as an abuse of power by telecom providers who have grown too powerful. The Federal Communications Commission said in June it plans to investigate them.

But carriers say their exclusive deals encourage them to offer consumers discount prices on smartphones and supports development of the expensive devices. They warn that government intervention would impact their ablity to invest elsewhere, such as improving telecom network capacity.