Friday, September 12, 2008

Senate Questions Wireless Carries on Rising Text Rates

Here's some interesting info for mobile phone subscribers who send a lot of text messages. According to this article, Sen. Herb Kohl, chair of the antitrust subcommittee sent a letter to the four major U.S. wireless network providers.

Sen. Kohl's letter was delivered to the offices of AT&T, Sprint, T-Mobile and Verizon Wireless. The chair of the antitrust subcommittee wanted the letter to convey his concerns about the doubling of the rates for sending text messages even though the cost involved with sending them remained constant.

Here's the statement released by Sen. Herb Kohl the chair of the antitrust subcommittee:

"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. Also of concern is that it appears that each of companies has changed the price for text messaging at nearly the same time, with identical price increases. This conduct is hardly consistent with the vigorous price competition we hope to see in a competitive marketplace."

The current charge for sending text messages is 20 cents which represents double the messaging rates imposed by carriers three years ago. AT&T, Sprint, T-Mobile and Verizon Wireless serve roughly 90 percent of cell phone users in the US and charge them the same text messaging rate.

The letter sent by Senator Kohl contains a formal request to the network operators asking them to explain the reasons behind the text price increases. Sen. Kohl is also asking AT&T, Sprint, T-Mobile and Verizon Wireless to justify the 20 cents rates compared to the rates of sending / receiving emails and other services.

As of the making of this wireless contract post, the recipients of Sen. Kohl's letter has not yet responded. Well, this is certainly an interesting development. I for one, do not comprehend why the rate for text messages has doubled when the cost of sending them remained the same. It would be interesting to see how AT&T, Sprint, T-Mobile and Verizon Wireless respond to this letter. That is, if they will offer any response.

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