Senate Antitrust Committee on SMS Prices: "WTF? $$$"

In a letter, US Senator Herb Kohl (D-WI) has requested an explanation of the texting price hikes from the CEOs and presidents of Verizon Wireless, AT&T, Sprint, and T-Mobile, giving them a deadline of October 6, 2008 to answer his questions.

"Your four companies are the nation's leading wireless telephone companies, collectively serving more than 90% of the nation's wireless subscribers," the senator wrote.

"Since 2005, the cost for a consumer to send or receive a text message over each of your services has increased by 100%. Text messages were commonly priced at 10 cents per message sent or received in 2005. As of the end of the month, the rate per text message will have increased to 20 cents on all four wireless carriers."

Kohl pointed out that Sprint-Nextel was the first carrier to increase the text message rate to 20 cents last fall -- and that, before the start of October, all of its three main competitors will have matched this price increase.

The lawsuit, filed Thursday by a group of Illinois residents proposing a national class-action suit, accuses AT&T, Verizon Communications, Sprint Nextel and T-Mobile USA of conspiring to raise the text rates, a violation of U.S. antitrust laws. The four companies account for nearly all cell phone providers in the United States.