How DOJ’s Collusion Case Against AT&T, Verizon Impacts Consumers

For the most part, the market for wireless phone service in the United States has historically been an oligarchy (a few major corporate powers control the whole industry, and no one else stands a chance competitively). We may soon see, however, a regulatory crackdown that threatens to change that paradigm.

According to The Washington Post, AT&T and Verizon are now under federal investigation for collusion, and the outcome of that case may have a significant outcome on the market moving forward. 

At issue is the question of whether the two companies sought to hamstring a technology that would help consumers switch carriers. The technology is the “eSIM card,” a gadget that makes it easy for people to carry their contacts and other mobile preferences with them when they transition to new phones and/or carriers.

AT&T and Verizon are threatened by this technology because it makes it easier for customers to leave them behind. The Department of Justice is now looking into whether the two companies conspired to suppress the technology, harming both competitors and consumers. Such a finding could result in major fines and other penalties.

“You have this great promise of eSIMs, which is device portability,” said John Bergmayer, senior counsel at consumer group Public Knowledge. “Shouldn’t you be able to shop around and find out which carrier has the best plan?”

The wireless companies have maintained that they did nothing wrong. Verizon put out a statement calling the collusion allegation “much ado about nothing.” AT&T said they were being cooperative, providing the government any information it needed for the investigation.

The big companies have always been in a position of power. That’s why Verizon had over 116 million wireless customers as of the end of 2017, while AT&T had more than 156 million—and that’s just in the United States and Mexico.

Change could be coming, though. With the advent of eSIMs, we could be moving toward a future in which consumers have more autonomy than ever to make their own wireless service choices.