Verizon, AT&T deny collusion on texting prices
Submitted: June 16, 2009 - 8:36pm
Originally published: June 16, 2009
Last updated: June 16, 2009 - 8:36pm
Originally published: June 16, 2009
Last updated: June 16, 2009 - 8:36pm
Source:
Reuters
Author:
Diane Bartz
Verizon and AT&T took issue with (some say umbrage with) assertions that they colluded in setting prices for text messages, saying on Tuesday that prices for most customers had fallen and the market was competitive. Se. Herb Kohl, Chairman of the Senate Judiciary Committee's antitrust subcommittee, said he was concerned that the four largest cell phone companies doubled their text message rates from 10 cents in 2006 to 20 cents in 2008. "These sharp price increases raise concerns. Are these price increases the result of a lack of competition in a highly concentrated market?" he asked, adding that the subcommittee had urged the Justice Department to scrutinize any future mergers or allegations of anticompetitive practices in the industry. But the general counsels of both Verizon and AT&T argued that the price increases affected 1 percent of text messages sent because most consumers bought volume plans that lowered the per-message cost.
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It does seem like there is some collusion between the big four carriers, doesn't it? I think the rise in texting prices is a calculated move by the big carriers to 'persuade' (read: force) people into signing up for texting plans. Most people will opt for a higher plan than they need in order to avoid overage charges. So the carriers laugh all the way to the bank.
Plus, last time I checked, my carrier seemed to think any alteration to the contract, like signing up for a new texting plan, extended the contract period again...
Just yesterday I saw an interesting thing, though. I noticed a new prepaid plan by the Tracfone folks which if I remember correctly translated into 2c a minute and 1c per text. I think it was called StraightTalk. Prepaid, mind you, not a contract. So if they can give it at that price what is the excuse of the others? Anyway, this might be the future for those unhappy with the way the big four are going. It seems Tracfone is rocking the boat here. Good for them.