Questioning an across-the-board doubling of text message rates charged by Verizon Wireless, AT&T, Sprint- Nextel and T-Mobile USA, Senate Antitrust Subcommittee Chairman Herb Kohl (D-WI) asked executives at all four companies this week to justify their pricing decisions which, according to Kohl, are “hardly consistent with the vigorous price competition we hope to see in a competitive marketplace.” Announced on Tuesday, Kohl’s inquiry comes as the European Commission (EC) continues its campaign against European Union text message roaming fees that are said to be significantly higher than actual costs. Voicing alarm about “sharply rising rates,” Kohl told the companies in a letter that the doubling of text message rates from 10-cents to 20-cents between 2005 and 2007 “does not appear to be justified by rising costs.” Kohl also took issue with the notion that “each of the companies has changed the price for text messaging at nearly the same time, with identical price increases.” As such, Kohl asked the four carriers to (1) explain “cost, technical or any other factors that justify a 100% increase in the cost of text messaging,” (2) submit data on the extent to which their customers have utilized text messaging during the period in question, and (3) provide “a comparison of prices charged for text messaging as compared to other services offered by your companies.” The carriers must respond by Kohl’s letter by October 6. While officials at Verizon and AT&T said they were reviewing the letter, a spokesman for Sprint Nextel promised that his company would “fully cooperate” with Kohl’s request.
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