WASHINGTON-A federal judge in New York said Aug. 12 that a consolidated group of lawsuits against major players of the wireless industry can go forward to determine whether the carriers in question illegally bundle handsets with service, but an allegation that the carriers have a monopoly was rejected.
“Plaintiffs have also sufficiently alleged an adverse effect on competition. Plaintiffs allege that the fact that new handsets must be marketed through and are programmed and locked by the wireless service carrier presents an ‘absolute barrier’ to entry into the handset market. Plaintiffs have also alleged that although the overall market for wireless products and services has grown substantially, the number of handset manufacturers has shrunk from scores of manufacturers in the mid-1990s to a mere 10 or so manufacturers today,” wrote U.S. District Judge Denise Cote. “Plaintiffs allege that the defendants’ tying arrangements have raised the price of the bundle of service and handset by increasing the cost of switching carriers.”
The ruling means that the case, which now includes similar suits from all over the country, can move forward.
The carriers involved in the suit are AT&T Wireless Services Inc., Cingular Wireless L.L.C., Verizon Wireless, Sprint PCS and T-Mobile USA Inc.
The case was originally before Judge Milton Pollack but was moved to Judge Cote earlier this year. She scheduled a conference on the case for Sept. 19.
During the early 1990s advent of mobile-phone use, carriers were given special dispensation from both the Federal Communications Commission and the Federal Trade Commission to bundle handsets and service to spur competition.
