Justice Department investigating AT&T and Verizon for blocking eSIM adoption, Apple reportedly filed complaint [u]

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According to sources familiar with the matter, the U.S. Department of Justice is investigating claims that AT&T, Verizon, and standards organization GSMA colluded to scuttle eSIM technology which would make switching carriers easier.

According to a report on Friday by the New York Times, a device maker and a wireless carrier filed complaints in November or December 2017 with the DOJ. One source claims the device maker is Apple, the report said.

The complaints allege that AT&T, Verizon, and standards-setting GSMA were working together in secret to establish new standards that would lock out the consumer-friendly eSIM technology, and all of the benefits that it entails.

At the GSMA RIG meeting in January, both AT&T and Verizon are said to have pushed for enhanced ability to lock phones to a network. According to the pair, the ability is important to control theft of the devices — and would bypass eSIM entirely.

The still-new eSIM technology would remove the need for the small cards that are shipped to customers to allow the phone to access a carrier's network. Instead, the settings for each carrier would be updated in software, allowing for near-instantaneous transfers of an unlocked device from one carrier to another, without the need of that physical card, or the need to have a SIM card reader in a smartphone.

Starting in February, the DOJ demanded information about the technology, and communications between the trio to determine if there was a secret effort to prevent the technology from getting a solid foothold in the market. According to the latest data provided by AT&T and Verizon, the pair control about 72 percent of the wireless market in the United States, and any move to increase friction for customers wanting to switch carriers would maintain that dominance, in the face of increased competition from T-Mobile, Sprint, or smaller pre-paid carriers not owned or controlled by the larger four.

The list of hardware companies that may have complained to the DOJ is smaller. Apple uses the eSIM technology in the Apple Watch Series 3 with LTE. Google has adopted it in the Google Pixel 2, with LTE-capable Microsoft Surface devices and the Samsung Gear S2 incorporating it as well.

A similar technology called Apple SIM has been adopted for the iPad, but is specific to those devices, and not the universal standard that the eSIM is supposed to be. Early predictions about the Apple SIM technology suggested that it would serve as a launching platform for the eSIM technology, with carriers and device manufacturers implementing it more heavily after they saw the flexibility of the technology in the iPad, but as of yet, that future has not materialized.

Update: This story has been updated to identify Apple as the device maker that filed the DOJ complaint.


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