DoJ Aims to Spot Antitrust Behavior Within Telecom Industry (T, VZ, more)

This morning, a WSJ article is highlighting the Justice Department's plans to delve into the highly-competitive telecom market in an effort to curb antitrust activities by the sector's largest players. Spurred by the Obama administration's bold stance on anti-competitive behavior, the agency will look into such things as: whether the biggest carriers are choking smaller rivals by locking up certain handsets through exclusive agreements and if the major players are unfairly restricting types of services offered by smaller carriers. The investigations are expected to sift through business segments spanning from land-line voice and broadband service to wireless.

At the forefront of the battle will be the U.S.'s two most dominant companies, AT&T (NYSE: T) and Verizon (NYSE: VZ). Together, these two companies host 60% of the U.S.'s 274 million wireless subscribers and about 90 million land-line customers. Furthermore, AT&T holds exclusive carrier rights on Apple's (Nasdaq: AAPL) iPhone, while Research In Motion (Nasdaq: RIMM) BlackBerry Storm users are limited to strictly Verizon's service.

While the review may seem aimed at certain carriers, sources have indicated that it isn't currently being considered "formal" to any specific company, and likely won't be. As the WSJ article notes, antitrust experts believe that the Department of Justice will have a rough time opening a Sherman-Antitrust case against a specific telecom company for numerous reasons, for example, the massive resources antimonopoly litigation uses up.

On the other side of the ring, the largest U.S. carriers argue that the industry is extremely competitive and that regulating certain areas of telecom -- such as exclusive handset deals -- would hurt innovation.

Telecom stocks are trading relatively inline with the broader markets today:

• AT&T - down 1.3%
  
• Verizon - down 2%
  
• Sprint Nextel (NYSE: S) - down 0.5%
  
• US Cellular (NYSE: USM) - down 1.4%
  
• and the outlier: MetroPCS (NYSE: PCS) - up 5%

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