updated 02:00 pm EDT, Tue June 16, 2009
Testimony on High SMS Fees
A US Senate committee today has started taking testimony today from representatives of major carriers over concerns of climbing text messaging rates. The questioning of AT&T, Cricket and Verizon officials follows recent concerns raised by Senator Herb Kohl that the carriers may be colluding on price hikes for SMS even though the actual cost of delivering each message remains the same or is decreasing due to economies of scale. Most major cellphone services have often increased their rates within short succession of each other and rarely if ever drop prices.
It's unclear whether the company spokesmen will answer Kohl's request that these companies illustrate the cost of a text message relative to data and voice plans. The investigation was originally prompted by per-message rates for those either outside of a bundled messaging plan or encountering overages, as their SMS messages often cost 20 cents while the actual price of delivery is regularly less than 1 cent. SMS by its nature only has 160 characters per message and uses only a small fraction of the bandwidth available on the network at any given moment.
Some carriers, such as Sprint, automatically factor unlimited SMS into some bundles while others like AT&T and T-Mobile can charge as much as $20 in addition to existing plans for similar features.