The top four wireless providers in the U.S. are being asked by a senior senator to account for their text-messaging prices.Sen. Herb Kohl (D., Wis.), who is chairman of the Senate Judiciary Antitrust Subcommittee, sent letters Tuesday to Verizon Wireless, AT&T Inc., Sprint-Nextel Corp., and T-Mobile USA, noting that text-messaging prices have increased 100% since 2005.
"What is particularly alarming about this industrywide rate increase is that it does not appear to be justified by rising costs in delivering text messages," Sen. Kohl's letter said. "Text-messaging files are very small, as the size of text messages are generally limited to 160 characters per message, and therefore cost carriers very little to transmit."
Mr. Kohl's letter noted that each company appears to have changed text-messaging rates at nearly the same time, with identical prices. "This conduct is hardly consistent with the vigorous price competition we hope to see in a competitive marketplace," he said. His letter noted the four carriers serve more than 90% of the nation's wireless customers. He asked them to explain reasons for increases in text-messaging rates in written responses due Oct. 6. Sen. Kohl also is asking the companies to provide comparable pricing data for voice calling, email and wireless Internet.
Verizon Wireless is jointly owned by Verizon Communications Inc. and Vodafone Group PLC. T-Mobile is a unit of Deutsche Telekom AG. Spokesmen for Sprint and AT&T said the companies intend to respond to the letter. Sprint spokesman John Taylor said Sprint's response would be "detailed." Verizon Wireless said it is reviewing the letter. T-Mobile didn't respond to a request for comment.
By: Fawn Johnson
Wall Street Journal; September 10, 2008
