DOJ OK with Text Message Rates

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The U.S. Justice Department has concluded an investigation into the rates major cell service carriers charge customers for text messages and concluded that the companies didn't work in concert to force higher prices on customers, according to the Wall Street Journal.

The DOJ had been investigating whether or not AT&T, Verizon, T-Mobile, and Sprint Nextel carriers colluded to raise per-message SMS fees over a three year period.

"The four companies increased their text messaging prices in two steps -- first from 10 to 15 cents, and then from 15 to 20 cents—within months or weeks of each other," said chairman of the Senate Antitrust, Competition Policy and Consumer Rights subcommittee, Senator Herb Kohl (D, WI).

He added that the rate increases happened even though the cost for the carriers stayed below a penny per message.

While the investigation into whether or not cell carriers worked together to artificially inflate the price of text messages has ended, the Government is still looking into the practice of offering specific cell phones through exclusive carrier deals.

The FCC is currently investigating the impact on competition exclusive carrier deals may be having on the market and whether or not they're fair to consumers.

Exclusive deals are common in the United States. AT&T's iPhone deal, and Verizon's Droid deal are just two of the high-profile exclusive carrier deals customers are currently faced with.

The FCC hasn't said how long it expects its investigation to take.

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4 Comments

JulesLt

It’s still a sign of insufficient competition if prices rise while costs do not - even if they didn’t actually work in concert to do so.

Still, it’s nothing compared to the data roaming price scam (charged as if your data was actually going over an analog international call).

spudgeek

It doesn’t look like the DOJ is doing any justice at all for the consumer. AT&T, Verizon and the rest of those money-grabbing cellular ubiquitous network types are charging 20? per message for something that costs less than 1?, that’s 1900% profit is it not? That’s pretty close to robbery I say… and that’s just text; voice and data is pretty extortionate too… and don’t get me started on international rates!

Is there a consumer advocacy group in the USA? I think the U.K. have OFTEL to keep the these “types” in line and prices seem to be more reasonable on Mr. & Mrs. Smith’s wallet.

spudgeek

I think the U.K. have OFTEL

Correction… the organization is called OFCOM (replaced OFTEL in Dec. 2003)

daemon

Ummm….. How did they calculate the cost for sms messages? Because an SMS messgae doesn’t use any more bandwidth than having your phone on does.

See cell networks work via a poll and response system and all an sms message does is piggyback on that system to deliver text messages, there isn’t any additional bandwidth used.

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