Senator Calls Out Wireless Providers

Questions text price increases

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U.S. Senator Herb Kohl (D-WI), chairman of the Senate Antitrust Subcommittee, has asked the presidents and chief executive officers of the four largest wireless providers to explain the rising rates for its customers to send and receive text messages.

Senator Herb Kohl

In a letter, Senator Kohl asked for an explanation from Verizon Wireless, AT&T, Sprint and T-Mobile who serve more than 90 percent of the nation’s cell phone users.

Since 2005 the cost for a person to send or receive a text message via one of the four companies has increased 100 percent. Text messages have risen from 10 cents to 20 cents on all four wireless providers. Sprint was the first major provider to raise text message rates last fall, and the remaining three have followed suit.

"What is particularly alarming about this industry-wide rate increase is that it does not appear to be justified by rising costs in delivering text messages," Kohl wrote. "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."

"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," he wrote. "This conduct is hardly consistent with the vigorous price competition we hope to see in a competitive marketplace."

Kohl asked the four providers to explain why the price of texting had increased, and how the price of texting compares with making phone calls or sending emails. He requested that the information be received by October 6, 2008.

Senator Calls Out Wireless Providers
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