Text-Message Rate Hikes Raise Antitrust Questions

The Federal Communications Commission and the Justice Department are launching an antitrust investigation into the text-message rate hikes for carriers Verizon, AT&T, Sprint and T-Mobile, which together control 90 percent of the U.S. cell phone market.

The cost per text message has leapt for the major providers from 10 cents in 2006 to 20 cents in 2008, and the rate increases—15 cents was an intermediate stage—seemed to happen in lock step.

Company representatives appeared before a Senate subcommittee anchored by Sen. Herb Kohl (D-Wisconsin). They denied collusion and argued that per-message rates are designed to encourage people to purchase texting plans, which have actually gotten cheaper, they argue. They also show price differentiation among companies when it comes to prepaid plans.

More than 1 trillion text messages were sent in the U.S. in 2008.

Source:

Los Angeles Times: Text-Message Fees Recommended For Antitrust Scrutiny

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