Senators smackdown US Carriers over soaring text messaging rates
Looks like the four major US cell phone providers have been caught with their proverbial hands in the consumers pocket. Recently, Sen. Herb Kohl, chair of the antitrust subcommittee, sent a letter to the four major US Carriers (AT&T, Verizon Wireless, Sprint, and T-Mobile) asking them to explain why text messaging rates have doubled over the past 3 years when the cost to send them has remained the same. Seems like the Senator also noticed that when one carrier raises costs, they all follow suit. Aren’t these carriers supposed to be competing against each other to lower rates and not working together to raise them? So far none of the carriers have not responded. Not surprising.
@chris
haha, your right. Unintentional double neagtive. It should say “None of the carriers have responded.”
you do a better job than my spell and grammar check program which even missed it.
Clearly collusion and I’m glad, for whatever the senator’s motivations, that he’s calling them on it.
Obviously, the market is NOT correcting itself when they all are charging the same fees.
Remember the big hoopla over those “unlimited plans” a few months ago? Which carrier is actually providing a cheaper alternative? None, they are all about the same price minus a dollar here or .99 cents there. How is that the market correcting itself? How does that not look like collusion of the four carriers deciding this is some back room somewhere? How is that competition?
It’s the same with the oil companies. They were all very happy to rake in record profits as gas prices soared toward $5 a gallon. Show me ONE who offered an alternative. Name ONE who said, we’re going to be the alternative by selling cheaper (and make it up in volume). Didn’t think you could.
Maybe this senator will start a trend of looking into why companies, in whatever industry, seem to be working more often in cahoots as opposed to the true spirit of competition.
“So far none of the carriers have not responded. Not surprising.”
Okay, so they’ve all responded. What did they say?
Each carrier has their own perks as to why you choose them. Who cares if they all have the same 99 price point for UNL talking? I’m sure you can sit here and pick apart the differences between the companies all day. Some of the arguements are so miniscule it boggles the mind. Just cause company A decided to charge 99 bucks and then company B decides that they should too, then that’s their perogative as a company. You as the consumer have lots of options if 99 seems like a rip off. You can go with TMo and get their MyFaves, go with ATT and get their Early N/W. I see more than enough differences between the carriers to make an educated guess as to which one is better suited for you. I feel these are more cases of people wanting the best stuff out there for next to nothing. I read somewhere (need to cite it) that it cost ATT nearly 1B to upgrade to 3G…someone’s gotta pay for that service that we all demand.
Cite found, sorry
http://www.reuters.com/article/pressRelease/idUS223588+10-Apr-2008+PRN20080410
Okay, the double negative has been pointed out 3 or 4 times now, we got it. It’s a typo people.
As for the senator, I think this is great. I work for T-Mobile and I was actually upset when I found out we were upping our message rate to $0.20 per message. I personally don’t think it’s fair to double the cost of something (actually it jumped from the original $0.05 when I first joined T-Mo) when it’s costing the same to make it. Sure SMS/MMS rates aren’t the biggest issue but it’s a start, and if this makes the rates go back down, well then that’s a good thing and I’m all for it.
Kohl is a billionaire. He owns the Milwaukee Bucks and Kohl’s department stores. Still, that doesn’t mean he’s not a cheap bastard.
Backbeat, the fda’s is to verify claims drugmakers were making, which isn’t a pricing/market function, but rather a function of product.
cannon, the problem will correct itself when one of the carriers realizes they can increase subscription by lowering their price. But no, we have senators sticking their nose into which will create committees and subcommittees and probably sub-sub committees.
Oh man!! Stop WHINING! We have it SOO good in the U.S. with minutes packages, and text bundles, as well as Internet choices, compared to Europe and Asia.
So quit crying, and get a messaging bundle if you write more than 100 texts.
It’s an election year. They will meet over this and then nothing will happen except to have on the record that they tried.
They have these committees to let the voters know their trying… Vote Palin / McCain.
The answer is: “Dear Senator, we are in the business of making money”.
If people are willing to pay .20 for a text message, they’d be stupid not to charge that much. They didn’t spend billions on their network as a hobby. They did it with the hope of maximizing profit.
If I owned a business, I wouldn’t want the government telling me how much I should charge for a good or service. Let supply and demand determine the equilibrium price.
@whit: You obviously have little understanding of the FDA’s founding and purpose. What you state is a very narrow sliver of its current responsibilities. Nor was any question ever raised specifying cost controls. But, having said that, on that note also, you’re unaware of the FDA’s history and founding purpose.
@Crunch: Were the Founders whining about the British? Were negroes whining about injustice? Were women whining about their right to vote? Are you whining about those exercising their right to speak freely and without interference? Attitudes like yours went the way of the plague.
Hey, for everyone on here that is complaining about any motive this Senator has is completely idiotic. If you are a consumer of any of these big wig carriers and Kohl wants to step in and find out some answers to save you some $ in a recession no less. Then by God, you don’t bash him. You give praise. Oh, I sorry your work caters to your monthly bill.
If you personally want to throw money away then send it my way.
“So far none of the carriers have not responded.” Huh?
How is this not a good thing? Based on current rates if we were to get billed SMS rates for downloading an mp3 the cost would be nearly $6,000!
http://www.mobilemessaging2.com/2008/01/29/blogger-computes-the-true-price-of-an-sms/
backbeat, I own 20 hospitals and am very well versed in is Purpose. What it is doing now actually oversteps the bounds of its original purpose.
so then leave!!!
@jon “The market, when left alone, will always correct itself.”
“My statement is historically correct. I challenge you to show me when a true free market situation didn’t correct itself.”
true free market?? no such thing!!! if there was such a thing we wouldn’t have order. this is a cut-throat world.
secondly, when there is collusion or a monopoly how can there be a correction???
think before you use words like “always”
need examples of monopolies??? AT&T, MSFT, Look how powerful Wal-Mart is becoming. Let them do whatever they want and lets see how well your “true free market” works. and then you will really see how out of balance the system will get. go back to school my friend. theory goes so far in the real world.
^ whit owns 20 hospitals? Really? Which group? (I’m taking wagers at 10000:1 odds you won’t go beyond your initial lie)
I’ll have to insure we have no contract with you or void those which may be in place.
American society and American business has changed since 1862. Cause & Effect, in effect, once again. Cost controls and controlled marketing are actions of the Agency since its inception as authorized by its original mandate as well as and under Title XXI. Is it every person’s best friend? Not always, but on this matter, you are simply badly off course.
This is really not a road you want to go down.
“cannon, the problem will correct itself when one of the carriers realizes they can increase subscription by lowering their price.”
but what has happened is the exact opposite. Instead of charging a fair price for each message, the carriers raise the per SMS price and then create a package that seems like a deal. In reality all that they are doing is guaranteeing a $5, $10, $15 or $20 of extra revenue per month. Because the casual SMS user is afraid of using more than 30 a month.
Can’t we just all get along? Build a camp fire, roast some S’mores and sing kumbaya?
props to the senator. texting is much cheaper in europe because they actually compete.
seriously, has anyone heard of capitalism? would you work hard, to just give it away? hmmm…
move to “other countries”