Nortel Networks has rejected Research In Motion’s bid for the wireless infrastructure assets Nortel is unloading as part of bankruptcy proceedings. RIM said Monday night that it intended to offer $1.1 billion for Nortel’s CDMA and LTE businesses, but was told it could do so only if it agreed not to bid on other Nortel assets, something it had intended to do.

In a blistering statement, RIM (RIMM) accused Nortel (NT) of imposing unfair conditions on the court-supervised auction of its assets and of jeopardizing their continued Canadian ownership.

“RIM is extremely disappointed that Nortel’s world leading technology, the development of which has been funded in part by Canadian taxpayers, seems destined to leave Canada,” said co-CEO Jim Balsillie. “RIM remains extremely interested in acquiring Nortel assets through a Canadian ownership solution that would serve the dual purpose of keeping key wireless technologies in Canada and extending RIM’s leadership in the research, development and distribution of leading edge wireless solutions, but RIM has found itself blocked at every turn.”

Why? Nortel says RIM was late to the game and hasn’t followed proper auction procedure.

“Other parties moved expeditiously to comply with the court approved procedures to become a qualified bidder,” the company said in a statement. “It was not until July 15, 2009, that RIM submitted a letter to Nortel asking to be a qualified bidder and since that time, Nortel has diligently attempted to work with RIM on acceptable confidentiality terms relating to Nortel’s valuable intellectual property assets, but RIM refused to comply with the court approved procedures.”

What’s really going on here? It’s hard to say, though clearly there’s more to the story. After all, RIM’s $1.1 billion bid is far, far more than Nokia Siemens’s stalking horse bid of $650 million. And what does RIM want with the CDMA business, anyway?

So says Pali Research, which in a research note this week argued that AT&T (T) should be very worried about the prospect of Verizon adding the iPhone to its handset lineup.

“As the iPhone exclusivity period rolls off between AT&T Wireless and Apple, a material number of AT&T customers will flock to Verizon’s superior network,” the firm states. “We estimate that nearly a third of AT&T’s post-paid customers are being retained by AT&T primarily because of the iPhone exclusivity.”

An unsettling thought for AT&T, whose five-year agreement to be the iPhone’s sole U.S. provider is reportedly set to expire in 2010. Especially since there are several compelling reasons for Apple to offer the iPhone to Verizon (VZ).

For one thing, the move would give Apple access to about 80 million new Verizon customers. For another, it would bring the iconic device to a carrier that might, you know, reasonably support all its features, a carrier whose LTE “4G” network isn’t four-to-five years off, a carrier whose name doesn’t elicit laughter and jeers at Apple’s Worldwide Developers Conference.

So why extend AT&T’s exclusive deal? If there’s a good reason, Pali doesn’t see it. The research house is betting on the iPhone coming to Verizon. And when it does…

“We expect AT&T Wireless net subscriber additions to fall to less than 1 million in 2010 from more than 4 million in 2008. With an LTE-based iPhone in 2011, we believe Verizon could take even more market share resulting in a contraction in AT&T’s subscriber base in that year.”

Since Varney’s confirmation in late April, the Department of Justice has seen a sort of Trustbuster renaissance. The DOJ has begun inquiring into potentially anticompetitive recruiting practices in Silicon Valley. It opened an investigation into the Google Books (GOOG) settlement. And now, the Department is scrutinizing cellphone exclusivity deals like the lucrative one between Apple (AAPL) and AT&T (T). Sources close to the DOJ tell The Wall Street Journal that the agency is probing such deals to see if they adversely restrict consumer choice or hamper competition.

The inquiry, which is in its very early stages, follows recent calls for the Federal Communications Commission to open a similar investigation, and it remains to be seen what, if anything, will come of it. For while exclusivity deals may undermine consumers, there’s little doubt that they benefit them as well. After all, AT&T’s iPhone deal with Apple scared the hell out the entire industry, forcing innovations in handsets and networks alike. Were it not for that deal, we might not be seeing the network improvements now occurring–the deployment of high-speed downlink packet access and long-term evolution, or LTE, networks, for example. And we almost certainly wouldn’t have devices like the Palm (PALM) Pre and the BlackBerry Storm.

Four years and 13.7 million iPhones later, Verizon (VZ) is reportedly reconsidering that assessment.

USA Today says the company has been talking to Apple about becoming an iPhone carrier when AT&T’s exclusivity deal ends next year. Sounds reasonable. Verizon would certainly love to offer the iPhone, which has done great things for AT&T (T), and Apple would surely love the chance to peddle the device to Verizon’s 80 million customers. Problem is, a deal like the one described by USA Today would require Apple to develop a new iPhone based on the CDMA and/or LTE (Long Term Evolution) standards. The first is the standard Verizon currently supports, the second is the one it will begin supporting widely by 2010–a standard that theoretically offers data rates of 100 Mbps downstream an 50 Mbps upstream.

Now, Apple is obviously already planning for LTE, which will be adopted by AT&T as well–though perhaps more slowly than by Verizon. So it makes sense that Apple might look at Verizon as an alternative to AT&T. But–if I understand things correctly–even when Verizon rolls out LTE for data, its network will still rely on CDMA for voice. So were the iPhone to be offered by Verizon, Apple would have to develop a new version of the device that would support both the next-generation standard (LTE) and the legacy standard (CDMA). That’s something Apple has been openly loath to do. Consider this exchange between Piper Jaffray analyst Gene Munster and Apple COO Tim Cook during the company’s earnings call last week:

Gene Munster: Hi good afternoon. Congratulations. I’ve got a question on the iPod. Our survey board suggest the exclusive relationship with the AT&T is the number one reason why people don’t purchase an iPhone and given the revenue shares no longer exist, can you walk us through some of your thinking in terms of why maintain an exclusive with AT&T. Just a follow-up question regarding any update on Steve Jobs? Thanks.

Tim Cook: On AT&T, Gene, we view AT&T as a very good partner. We believe that they’re the best wireless provider in the US and we are very happy to be doing business with them. They have done a very good job with iPhone, they’ve put the full force and weight of their company behind it, it’s a major strategic thrust for them and so we’re very happy with the relationship that we have and do not have a plan to change it.

GM: Is there a structural reason why you need to maintain with AT&T from a technology perspective?

Tim Cook: Well from a technology point of view as you know, Verizon is on CDMA and we’ve shown from the beginning of the iPhone to focus on one phone for the whole of the world and when you do that, you really go down the GSM root, because CDMA is–doesn’t really have a life to it after a point in time.

Cook’s reply to Munster’s question certainly doesn’t preclude an Apple/Verizon iPhone deal but it doesn’t exactly suggest one’s in the offing either. Which means that what’s likely going on here is simple gamesmanship. AT&T’s iPhone exclusivity deal is about to expire and the company is desperate to extend it. Apple is looking for better terms. And entertaining a deal with Verizon would certainly be a good way to get them and perhaps force AT&T to upgrade its network more quickly in the process.

The alliance will see the four cable and tech companies investing $3.2 billion in the nationwide wireless network that Sprint and Clearwire have been struggling–with profound unsuccess–to roll out. Comcast (CMCSA) will contribute $1.05 billion, Time Warner Cable (TWX) $500 million. Intel (INTC) will invest $1 billion, Google (GOOG) about $500 million. The new venture will be majority owned by Sprint, but it will take the Clearwire name and be run largely by Clearwire execs, among them cellular industry pioneer Craig McCaw.

For the cablecos, which have yet to settle on a clear wireless strategy, the deal is a quick and dirty way to establish the high-speed wireless network they need to compete with telcos like AT&T (T) and Verizon (VZ). For Sprint and Clearwire, it’s a chance to make their non-starter of a WiMax network viable and something happy to talk about when conversation turns to Sprint’s stock price, which has fallen nearly 60% over the past 12 months.

That said, the deal is not without its problems–top among them WiMax itself. As Craig Moffett, an analyst with Bernstein Research, explained in a note to clients earlier this year, the 2.5 GHz spectrum upon which Sprint and Clearwire are building their network isn’t nearly as good as the spectrum Verizon and AT&T just purchased in the FCC’s 700 MHz auction. “Serious questions remain about penetration through walls and windows,” Moffett explained. “Elsewhere in the world, operators have also raised questions about WiMax’s real-world bandwidth, latency and non-line-of-site coverage. How competitive the offering would be versus Verizon’s or AT&T’s planned LTE broadband service therefore remains to be seen.”

That it does–though there have been some indications that it may not be quite up to par. Speaking at an international WiMax conference in Bangkok in March, Garth Freeman, CEO of Buzz Broadband, Australia’s first WiMax operator, described the technology variously as a “disaster,” “miserable failure,” and a standard “mired in opportunistic hype.”

So will that prove true for Clearwire as well? We won’t know for some time. Building out a massive network like this will take some doing. “We’ll likely to see early trials in 2010, but a full-fledged build-out will take longer,” Clearwire CEO Benjamin Wolff said during a conference call this morning. “Building faster is a matter of logistics. The build plan we’ve laid out will be one of the largest and fastest build-outs ever done. We have the capability to do it, but it’s a massive undertaking.”