US Senate wants answers on soaring text rates

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Posted in Mobile, 10th September 2008 12:08 GMT

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The chair of the Antitrust Subcommittee in the Senate Judiciary Committee has written to the four largest US network operators demanding they explain why the cost of texting has doubled since 2005.

Text messages have been a nice little earner for European operators since cross-network connectivity became available, but txt is still a growing market in the US, and one on which American operators have been slow to capitalise - though the fact that texting rates have doubled from 10 cents to 20 cents since 2005 shows they're catching up fast.

The concern of Senator Herb Kohl is that all four networks seem to have increased their prices at roughly the same rate, and as the industry has seen consolidation reduces competition.

"I am concerned with whether this market consolidation, and increased market power by the major carriers, has contributed to this doubling of text messaging rates over the last three years," Kohl said.

AT&T, Verizon Wireless, Sprint, and T-Mobile have until 6 October to explain why the cost of texting has risen so much, and to demonstrate how they differentiate their pricing to ensure competition. ®

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