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Verizon, AT&T Deny Text Message Price-Fixing
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Michael Barkoviak / DailyTech
June 17, 2009
‘Major cell phone service providers under even more government scrutiny.’ -
Shortly after four lawmakers decided to request the Federal Communications Commission (FCC) look into cell phone exclusivity, service providers are being accused of text message price-fixing.
Representatives from Verizon Wireless and AT&T testified in front of the Senate Subcommittee on Antitrust, Competition Policy, and Consumer Rights, saying the two largest U.S. providers aren’t in collusion to increase text message prices.
Last November, Sen. Herb Kohl (D-Wisconsin) called out Verizon, AT&T, T-Mobile, and Sprint Nextel on why text message rates have increased 100 percent in less than four years. Furthermore, each company raised prices after one company bumped up prices, and the cost of texting continues to rise if a subscriber avoids a text messaging plan.
Phone providers are focusing less on marketing voice plans, instead choosing to focus on convincing subscribers to pick up data and text message plans.
“Especially in light of this litigation firestorm, we want to make it perfectly clear that AT&T sets the prices for ”http://online.wsj.com/article/BT-CO-20090616-714304.html" rel="nofollow">all of its products on a unilateral basis," said AT&T’s general counsel, Wayne Watts. “The allegations in the complaints are patently false.”
The 20 cent per message sent and received clearly doesn’t match any major increases in the infrastructure of phone carriers.
Verizon and AT&T will likely be able to walk away from this matter unscathed — but getting called to Washington D.C. is a sign that the government is indeed watching the companies. Verizon defended itself in D.C. by noting most subscribers pay for a monthly texting plan, which means subscribers reportedly pay less than one cent for each message.
Each company said there is new competition than collusion between Verizon, AT&T, Sprint, and T-Mobile.
There is a lack of competition in the mobile phone market at the moment, industry critics fire back at the big four companies. The number of exclusivity contracts — each major company has sole access to at least one phone — and the issue isn’t going to go away any time soon.
© 2009, DailyTech
yoddel
4 months ago
140 comments
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Account Removed
4 months ago
btw I got the best cell-phone over here, I can play baseball with it, it even replaces toilet paper. Awesome, I even got apps to tell me when I need to go to the bathroom!!! LOL!!!
Account Removed
4 months ago
Cellphone are crap anyway!!
And face it, FT/SPRINT/T-Mobile are own by Orange, and AT&T And verizon Wireless are Owned by the Bell companies and Vodafone.
Anyway Vodafone and Orange share maintenance, ingineering cost all over Europe and The US.
This is not communism, you, idiot, get some education...
So pay your bill, eat this, no one forced you to buy a cell phone, dummy!! Get over it!!
Francat
4 months ago
8 comments
I go with prepaid, no bells or whistles...when did the industry decide that people wanted or needed a phone that could do what a computer does? My phone has the ability to call, text, e-mail, and go on the internet...but when I activated it, I told them to take off the e-mail and web access, and they were like, no problem...you can always add them back if you change your mind. the only extra I wish it had was a camera...but not so I could send the pics, just so I could take them. my text comes out of my minutes, at a higher rate, yes, but I don't do a lot of texting, so I don't mind that. It does bother me, though, that any service provider has an exclusive deal with a particular phone. the only reason I do not have a certain phone that I like, is I refuse to give the provider that comes with it any business....
rw258fx
4 months ago
14 comments
Communism?...yes. It is communistic pricing. Trying to take an even share out of every user by setting high initail prices and offering low plan pricing. It only serves companies' interest of a steady income stream, regardless of customer use.
DeLore
4 months ago
2 comments
gshecler: Phone companies DO make a fortune off of us. Over the past few years, the price of minutes, texts and data have all gone up. All the while, the price to provide these things has probably decreased. They are making a FORTUNE off of us!
glowingalant
4 months ago
28 comments
Now that text messaging is popular, they are trying to capitalize on it. I hate that with my i-phone I only have the choice of 500, 1500, or unlimited texts. First of all it should be included in "unlimited data" plan, and second, I use about 800-900 texts a month, why can't I have a 1000 text plan? Yeah, 10 cents a whack was overpriced, now they're gonna hit poor saps who dont understand the technology with 20 cents per oops. On my old Cingular phone, the media net would launch by itself and run up all kinds of data charges, this seems like a similar plot to charge all kinds of BS fees.
gshechler
4 months ago
2 comments
I do not understand why the exclusive phone deals are a problem. The phone providers have been consistently selling phones at a loss and hope to recover it in the service contract. The fact that they don't eat a huge loss on the sale of a special phone because demand is high is good for them. THEY ARE SUPPOSED TO MAKE A PROFIT. Mobile phone companies had bled money for years, let them make a profit for a change.
For those who hate the per-text fee... buy a phone that doesn't have the feature. It's the same whining as the people complaining about what is on a particular TV channel - CHANGE THE CHANNEL and you won't see it. Nobody is forcing you here, you have free will to choose.
begge
4 months ago
20 comments
Is this communism? Corporations should have the right to charge anything they like, and consumers have the right to choose or not. The balance is a mutually beneficial agreement which is something the government has no right to control because of "rights".
nebuleux
4 months ago
24 comments
In my history Both T-mobile and ATT (Chronologically respective) have both been unable to block numbers for me, or texts from in or out of network users...in the US... However they have stated over the phone with varied CSR's that were I a UK subscriber, I would be able to block numbers at will.
They have waived my fees for changing my number, but it is a bit extreme to avoid the occasional text/voice scammers and talent hunters.
The general fee should have only been 7 Dollars, what I have been waived in both cases with tmobile and att.
As for the text hike, there is little impact on bandwidth to the network and "expansion" would really not be needed in event he most populated areas (citing of course that not every user in a region is texting 20K messages in a day...).
FCC is right to inquire into the cost hikes I believe, where is our money really going?
in the end, the best way to avoid charges our end is to go with the plans, or forget texting alltogether. Some services CAN remove text receive capability, but I'm sure there will be a charge there eventually.
kietAZ
4 months ago
2 comments
Finally, someone caught onto these cell phone companies scams. I declined text messaging plan and yet kept getting charged per text msg from people I don't know. Worst, I called to have my phone blocked, but cell phones said they couldn't. I asked to change my cell phone # is I also kept getting calls to the new number I got, AT&T said it will charge me $35..... fees fees fees...