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The Justice Department is currently investigating whether AT&T and Verizon may have colluded to thwart a technology that could allow wireless customers to switch network providers more easily. But antitrust officials conducting a similar probe in 2016 found little evidence for the claim and ultimately dropped the inquiry, according to a letter sent by the Justice Department and obtained by The Washington Post.

In closing the Obama-era investigation, the government said that while mobile carriers had pushed for new industry policies that raised competitive concerns, their initiative proposed little more than a "technical capability" for cellphones without clearly demonstrating how or if companies such as AT&T and Verizon might use it to gain an unfair advantage.

The investigation could be reopened if the proposed policies raised further concerns after implementation, the Justice Department indicated in the letter, the authenticity of which was confirmed by multiple people familiar with the matter. While some of the policies have been approved for inclusion in the final standard governing cellphones, the overall policy remains in the drafting phase and has not yet been implemented.

The New York Times, citing six anonymous people familiar with the inquiry, reported that the investigation was opened after at least one device-maker and one other wireless company filed complaints.

Verizon, which is based in New York, derided the accusations on the issue as "much ado about nothing" in its statement. It framed its efforts as part of attempt to "provide a better experience for the consumer."

"The Government looked at this issue once before," Verizon said Saturday. "Their findings were quite clear then, and we're confident the outcome will be the same this time ... the reality is that there's nothing to substantiate it. It's time to move on."

Dallas-based AT&T also depicted its activity as part of a push to improve wireless service for consumers and said it had already responded to the government's request for information. The company said it "will continue to work proactively within [GSM Alliance], including with those who might disagree with the proposed standards, to move this issue forward."

The Justice Department declined to comment.

Verizon ended 2017 with over 116 million wireless customers. AT&T ended the year with over 156 million wireless customers in Mexico and the United States.

The "technical capability" highlighted by the Justice Department concerns the development of eSIMs -- a relatively new technology that could someday allow consumers to switch wireless providers with little more than a few taps on their smartphone screen. Unlike the small, physical subscriber identity module cards that must be plugged into devices to register them on cellular networks today, eSIMs are integrated directly into electronic devices and rely on software that makes it a trivial matter to change from AT&T's network to T-Mobile's, for example.

"An eSIM, or embedded SIM, stores the data on the device itself," said Ferras Vinh, a policy lawyer at the Center for Democracy and Technology. "It serves the purpose of a physical SIM card and lets consumers choose their carrier [remotely]."

The technology is already available in smartphones like Google's Pixel 2.

The proposal by some wireless carriers at the GSM Alliance, an international forum for the wireless industry, would have imposed restrictions on eSIMs in North America. Under the limitations, consumers would not be able to use the remote-switching feature of eSIMs without first obtaining permission from their existing carrier.

Key elements of the proposal had already been approved by the GSM Alliance when the Justice Department intervened with its investigation in the summer and fall of 2016. The government's inquiry ended up delaying the proposal's advance, though it ultimately moved forward again after the department suspended its investigation.

The government's latest investigation resembles the 2016 probe in most respects, with officials requesting information on the standards-setting process, according to two people familiar with the matter. Then, as now, all four national wireless carriers received requests from the government for information.

But since 2016, wireless carriers have pushed to include an additional rule in the proposed cellular standard, one that would prevent consumers from circumventing the proposed carrier restrictions on eSIMs by performing a factory reset of their device. GSM Alliance members were set to vote on that proposal in March -- but it was postponed in light of the Justice Department's ongoing inquiry. It is unclear whether the new rule is a focus of the probe.

News of the probe emerge during a trial of the Justice Department's case seeking to block AT&T's its proposed $85 billion merger with Time Warner to over antitrust concerns. That battle centers mostly on the future of cable TV and digital video streaming.

Information for this article was contributed by Brian Fung and Tony Romm of The Washington Post; and by staff members of The Associated Press.

A Section on 04/22/2018

Print Headline: Probe of AT&T;, Verizon recalls closed '16 case

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