At a pair of Senate hearings this week, AT&T and Verizon defended themselves against complaints about exclusive deals with handset manufacturers and against allegations of collusion in text message pricing, as executives of both companies maintained that the wireless market is competitive and that prices have fallen for most consumers. Exclusive contracts between wireless carriers and handset producers and the competitive effects of such deals were spotlighted Wednesday during a hearing on wireless competition conducted by the Senate Commerce Committee. Voicing concern that contracts such as AT&T’s exclusive iPhone pact with Apple, Inc. limit the ability of consumers to take full advantage of wireless handset technologies, several committee members, including Senators Byron Dorgan (D-ND), Amy Klobuchar (D-MN) and Senate Communications Subcommittee Chairman John Kerry (D-MA), urged acting FCC Chairman Michael Copps on Monday to examine the issue of handset exclusivity “carefully and act expeditiously should you find that exclusivity agreements unfairly restrict consumer choice or adversely impact competition.” However, at Wednesday’s hearing, Paul Roth, an official of AT&T, told lawmakers that competition in the wireless marketplace is “white hot” and that “the current business and regulatory framework—which allows service providers and device manufactures to partner and share risks to develop the most compelling devices—ensures innovation, lower prices, and choice.” Meanwhile, in remarks before the Senate Antitrust Subcommittee on Tuesday, an executive of Verizon Wireless countered earlier claims by Senator Herb Kohl (D-WI) that the four national wireless carriers may have engaged in collusion by doubling their text message rates from 10-cents to 20-cents per minute between 2006 and 2008. Verizon General Counsel Randal Milch told the panel that most Verizon subscribers subscribe to a text message plan that “pays less than a penny per message” and that also represents a two-thirds reduction in plan rates since 2006. As Milch explained that Verizon’s current price plan has contributed to a six-fold increase in text message usage, an AT&T official emphasized that his company “sets the prices for all of its products on a unilateral basis.”
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AT&T, Verizon defend handset, text message policies at Senate hearings
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