AT&T, Verizon Under Federal Investigation

The US has opened a probe into alleged coordination by AT&T Inc, Verizon Communications and a telecommunications standards organization to hinder consumers from easily switching wireless carriers, a person briefed on the matter said on Friday.

Verizon and AT&T acknowledged the government probe and said they were working with regulators, Reuters reported.

At issue is a technology that could make carriers’ business more volatile. Called eSIM, it allows consumers to switch wireless providers without having to insert a new physical SIM card, an identifying microchip. That makes it easier to compare wireless networks and easily select a new service when desired.

Verizon called the probe “much ado about nothing”, adding that it has been working with the US Justice Department for several months “regarding the inquiry”, according to spokesman Rich Young.

The New York Times reported on Friday that the justice department had opened an investigation about five months ago after at least one device maker and one wireless carrier filed formal complaints with the justice department.

The department sent demands to AT&T, Verizon and the GSMA, an industry standards-setting group, on efforts to thwart eSIM.

Apple Inc and other equipment makers have complained to the justice department about wireless carrier practices related to eSIM technology, two sources familiar with the matter said. Apple declined to comment.

“The reality is that we have a difference of opinion with a couple of phone equipment manufacturers regarding the development of e-SIM standards. Nothing more,” Verizon’s Young said.