US Senate questions SMS price hike

The US Senate has written to the biggest telcos over SMS prices

The chairman of the Judiciary Subcommittee on Antitrust, Competition Policy and Consumer Rights has written to the four biggest telecoms providers to ask for an explanation for the huge increase in the cost of text messaging.

Herb Kohl has contacted Verizon Wireless, AT &T, Sprint Nextel and T-Mobile and asked for an explanation of how the cost of texting has risen 100 per cent in barely two years.

He is also concerned that the companies introduced the price rises almost simultaneously.

"What is particularly alarming about this industry-wide rate increase is that it does not appear to be justified by rising costs in delivering text messages, " wrote Kohl.

"Text-messaging files are very small, as the size of text messages are generally limited to 160 characters per message, and therefore cost very little to transmit."

The four telcos handle about 90 per cent of all the text message traffic in the US. In 2005 the cost per text was 10 cents, but this has risen to 20 cents.

Kohl said that the fact that all four companies had introduced the price rises at about the same time also raised serious questions. Sprint first introduced the higher charges last autumn and other carriers were quick to follow suit.

"This conduct is hardly consistent with the vigorous price competition we hope to see in a competitive marketplace," he wrote.

The senator has asked for a full response by 6 October.