Anyone who uses text messaging (and isn’t that practically everyone?) knows that per-message SMS fees have skyrocketed, and now run 20 cents per message for all major carriers. This has prompted lawmakers to look into whether or not the top operators are price-fixing the service – an accusation that Verizon Communications Inc. and AT&T Inc. denied vigorously in a Senate hearing this week.
Sen. Herb Kohl, D-Wis., said during a Senate Judiciary subcommittee hearing that Verizon, AT&T, Sprint-Nextel Corp. and T-Mobile USA have a virtual lock over consumers and seemed to be acting in concert, raising text message pricing twice between 2006 and 2008 at the same time and by the same amount. The result is a 100 percent rise in pricing in the last three years.
“These lockstep price increases occurred despite the fact that the cost to the phone companies to carry text messages is minimal – estimated to be less than a penny per message – and has not increased,” Kohl said.
In addition to Congressional scrutiny, the wireless companies are defendants in several private class-action lawsuits over the matter.
But a conspiracy to set artificially high pricing is “patently false,” wrote AT&T’s general counsel, Wayne Watts, in a written testimony. “Especially in light of this litigation firestorm, we want to make it perfectly clear that AT&T sets the prices for all of its products on a unilateral basis.”