Wireless carriers counter antitrust concerns over rising costs of texting: T-Mobile USA: Our charges ‘have fallen by more than half’

National mobile-phone carriers denied any wrongdoing in reaction to a key Senate lawmaker’s probe into industry-wide text message price increases, pointing out competitive bulk texting plans have actually reduced costs to consumers and that congressional questions about the matter alone have triggered a flood of antitrust class-action lawsuits against them.
“Although your letter states that carriers’ prices for text messaging appear to have increased since 2005, the opposite is true,” states Robert Dotson, president and CEO of T-Mobile USA Inc. “Since 2005, the prices that T-Mobile charges for text messages – 90% of which are purchased in texting package plans – have fallen by more than half. Not only have our prices for text messages fallen, T-Mobile leads its competition in bringing lower prices to consumers. In fact . T-Mobile provides the best value to its customers by offering more text messages for less money than any of the other leading wireless carriers.”
In his letter to CEOs of the four national wireless providers last month, Senate Judiciary antitrust subcommittee Chairman Herb Kohl (D-Wis.) raised concerns about the price for individual text messages rising from 10 cents a piece to 20 cents over the past three years among the major cellular operators.
While the letters of T-Mobile, AT&T Inc. and Sprint Nextel Corp. were made public, Verizon Wireless requested that its response remain confidential. Verizon Wireless and other mobile-phone operators, having been hit with flurry of class-action lawsuits, may want to be careful about what statements they put in the public domain and whose name is attached to such statements.
Of the three wireless operators whose responses to Kohl were publicly disclosed, T-Mobile’s Dotson was the only CEO to offer an explanation of the company’s texting posture. Even though Kohl directed his letters to CEOs, responses by AT&T and Sprint Nextel were signed by government affairs officials.
AT&T linked Kohl’s investigation to the mounting litigation.
“As you probably know, since your letter was made public, 20 class-action lawsuits have been filed around the country against AT&T and other national carriers, specifically alleging price-fixing for texting messaging services. All but one of these cases cite your inquiry as one of the bases of alleged collusion. We are therefore eager to clear up any misunderstanding,” said Timothy McKone, executive VP for federal relations at AT&T.
The lawsuits likely will be consolidated in a single federal court.
Texting constitutes an increasingly important revenue stream for cellular operators. According to mid-year figures by industry association CTIA, 75 billion text messages are sent every month. Overall, CTIA said wireless operators generate $27.5 billion a year from wireless data, a big chunk of which is generated by text messages.