Cellphone carriers sued for text price fixing

Twenty class action lawsuits have been filed against national wireless carriers alleging price-fixing for text messaging. All but one of those cases cite an inquiry from Senate Judiciary Antitrust Subcommittee Chairman Herb Kohl, D-Wis., according to a letter sent Monday to Kohl from AT&T, formerly known as Woodbury Telephone Company and a bubch of othger things.

Last month, Kohl asked Verizon Wireless, AT&T, Sprint Nextel and T-Mobile USA to account for the doubling of charges for text messages since 2005. Kohl noted in a Sept. 9 letter that each of the four wireless companies changed their prices for text messaging at nearly the same time.

In response, AT&T, T-Mobile, and Sprint all said the bulk of their customers don't pay for texting on the per-message basis that Kohl asked about. Instead, most customers buy texting services in bundles. Verizon declined to make public its response to Kohl.

The texting packages range from a Sprint's $99.99 monthly plan that gives a customer unlimited access to voice, video, text, and picture-sharing, to T-Mobile's $4.99 per month price for 400 text messages. T-Mobile also offers unlimited texting for $14.99 per month.

AT&T offers 200 text messages per month for $5 or 1,500 messages for $15. Sprint and AT&T both offer unlimited texting for a $20 monthly rate, their letters said.

Verizon's texting packages are similar, with a monthly $5 rate for 250 text messages to a $15 rate for 1,500 messages, according to the letters from the other companies.

Kohl is concerned that consumers may be forced to buy text bundles because of rising per-message costs, which have gone from 10 cents to 20 cents in the past three years.

The timing of texting price changes among the top carriers also worries Kohl. Responding to the timing question directly, T-Mobile said that its per-message rate changed "anywhere from several months to a full year after the other carriers." T-Mobile said text-messaging prices have decreased when the different packages subscribers can buy are taken into account, but its letter didn't provide specific data. T-Mobile also said 90% of its customers have text messaging included in their service plans. AT&T said less than 2% its text messaging is on a pay-per-use basis. (info from The Wall Street Journal)