Text Messaging Rates Come Under Fire
Text messaging rates have jumped 100 percent over the last three years and Sen. Herb Kohl, chairman of the U.S. Senate Judiciary Subcommittee on Antitrust, Competition Policy and Consumer Rights, wants to know why. In a letter to Verizon Wireless, AT&T, Sprint and T-Mobile, Sen. Herb Kohl suggests that the consolidation among wireless carriers may be leading to a decrease in competition and an increase in the market power of wireless carriers.The chairman of the U.S. Senate Judiciary Subcommittee on Antitrust, Competition Policy and Consumer Rights wants to know why text messaging rates have jumped 100 percent since 2005. U.S. Sen. Herb Kohl, D-Wis., on Sept. 9 wrote the four largest wireless carriers in the United States, Verizon Wireless, AT&T, Sprint and T-Mobile, requesting that they explain the rate increases. Kohl said the rate hike appeared to him to be unjustified by the costs associated with text messaging services.
Instead, Kohl wrote, he thought the steep rates were more attributable to a decrease in market competition and an increase in market power among the major wireless carriers. In the last few years, the number of major national carriers has declined from six to four and carriers continue to acquire smaller, regional competitors.