Cell Phone Companies Defend Price Hikes On Text Messaging
Cell phone giants denied any conspiracy to purposely raise text message charges at a Senate Judiciary Committee hearing on Tuesday.
NEWS JUNKIE reported on Monday that today’s hearing would seek answers from the cell phone companies on why text messaging prices have gone from costing one-cent to as much as 25-cents in just five years even though transmission of text messages costs cell phone companies less than minutes.
According to report by the Dow Jones Newswire, Verizon, AT&T, and other cell phone companies have been fighting off class-action lawsuits ever since the Senate inquiry started last September by Wisconsin Senator, Herb Kohl. Kohl had written a letter to the wireless giants expressing his concerns that the prices for text messages had been unjustifiably increased by several companies all at once. He stated that perhaps lack of competition had led to the manipulation of prices.
“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,” Kohl wrote in his September letter. “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.”
The wireless companies had their chance today to deny Kohl’s claims. Here is a portion of the Dow Jones article on what the cell phone companies said:
Verizon’s general counsel, Randal Milch, said Tuesday in written testimony to a Senate Judiciary subcommittee that there are far more differences in text-messaging prices between wireless competitors than there are similarities.
Claims of price-fixing, Milch said, “are absolutely false.”
AT&T’s general counsel, Wayne Watts, said there was no evidence to suggest that anyone at his company engaged in any inappropriate or illegal behavior.
“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,” Watts said in written testimony.
Watts said that none of the lawsuits allege any specific time, place or people involved in the supposed conspiracy, and he said that most of the lawsuits cite Kohl’s letter as the principal basis for the allegations.
“The allegations in the complaints are patently false,” he said.
It’s unclear what the outcome of the hearing will be, but NEWS JUNKIE will keep you posted.