U.S. Justice Dept eyeing telecom probe: report

NEW YORK/WASHINGTON (Reuters) - The U.S. Justice Department has begun looking at big telecom companies such as AT&T Inc and Verizon Communications to try to determine if they have abused their market power, the Wall Street Journal reported in its online edition on Monday.

The journal, which cited people familiar with the matter, said the Antitrust Division's review was in its very early stages and was not yet a formal probe of any specific company.

The report said that a probe could concern exclusive agreements between phone companies and handset makers or whether phone operators are "unduly restricting" services third parties companies can offer on their network.

The Department of Justice declined comment and the country's biggest operators, AT&T and Verizon, said they had not been given notice of any formal probe.

Lawmakers have recently raised questions about whether large wireless carriers were hurting smaller rivals by entering into exclusive agreements with the makers of popular phones. Deals like AT&T's pact with Apple Inc for exclusive rights to U.S. iPhone sales are at the center of some lawmaker concerns.

AT&T spokesman Mark Siegel said he was not aware of any formal probe by the Department of Justice but declined comment on any informal proceedings. Siegel defended the practice of exclusive agreements between carriers and phone makers, saying they spurred competition and development of new features.

Verizon Wireless spokesman Jeffrey Nelson said that his company, which is the biggest U.S. mobile service, had no notice from the Justice Department about any probe into handset exclusivity. Verizon Wireless is a venture of Verizon Communications and Vodafone Group Plc.

The Justice Department's top antitrust official Christine Varney had said in May that the DoJ would be "aggressively pursuing" companies that abuse their power to crush competition.

Consumer groups said on Monday that they were hopeful that Varney's comment and the latest report were positive signs the government was looking at their concerns.