The U.S. Justice Department has begun looking at big telecom companies 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 a formal probe of any specific company.

The country's biggest operators are AT&T Inc and Verizon .

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

The Justice Department did not immediately respond to a request for comment.

AT&T spokesman Mark Siegel referred questions on any probe to the Department of Justice. But he defended the practice of exclusive agreements between carriers and phone makers, saying they spurred competition and helped companies collaborate on new features.

Verizon Wireless spokesman Jeffrey Nelson said that his company, which is the biggest U.S. mobile service, had 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 .

John Taylor, a spokesman for Sprint Nextel , the No. 3 U.S. mobile service which has an exclusive agreement to sell Palm Inc's

high-profile Pre phone, declined comment on the reported probe.

He also defended exclusive handset agreements as pro-competitive. We think that without these exclusivity arrangements carriers are less likely to risk the investment necessary to develop and promote devices like these, he said.

The new chairman of the Federal Communications Commission, Julius Genachowski, plans to review the deals.

According to a copy of the written responses to questions from Senator John Kerry obtained by Reuters in mid-June, Genachowski said he would promote competition and consumer choice.

Lawmakers have also raised questions about the pricing of text messages.

(Reporting by Diane Bartz in Washington and Sinead Carew in New York; Editing by Tim Dobbyn)

Iphone AT&T