updated 04:10 pm EDT, Wed September 10, 2008
Senator on US SMS Fees
Wisconsin Democratic Senator and Antitrust Committee head Herb Kohl today submitted an open letter to the heads of all four major carriers in the US challenging them to justify the reasons for what appear to be unnecessarily high fees for SMS text messaging. The representative notes that non-plan text rates have doubled on AT&T, Sprint, T-Mobile and Verizon since 2005 but that the cost of transferring a message across the network should have remained the same or declined since that point, suggesting attempts to inflate profits per message.
Kohl also indirectly raises the possibility of collusion between the carriers and notes that the most recent batch of price increases, to 20 cents per message, all happened within a short space of time starting from fall of last year. The Senator sees this as unusual given that the carriers' rivalry should logically dictate a gradual lowering of prices rather than an increase.
"This conduct is hardly consistent with the vigorous price competition we hope to see in a competitive marketplace," he says.
Text messages in recent years have become steadily inconsequential as a portion of US carriers' rates; a single message represents a maximum of about 160 characters and is widely known to cost just a fraction of a penny in most cases. Most providers offer unlimited data for as little as $20 or as part of bundle plans but in many cases break out SMS as a separate service that either requires an extra plan or else the high per-message fees.
The Senator accordingly plans to have the carriers illustrate the relative pricing of their SMS messages versus voice, e-mail and other data features as they have changed over the past three years.
Carriers have until October 6th to respond with the relevant data but haven't publicly commented on the letter.
It's unclear if any particular event triggered the investigation, though text messaging became a point of contention with the introduction of the iPhone 3G, when AT&T both switched the Apple device to a more expensive smartphone plan and dropped previously bundled SMS message allotments, asking customers to instead pay at least $5 per month more to add a block of messages to avoid incurring higher per-message costs.