Representatives from Verizon Wireless and AT&T appeared before the Senate Judiciary Committee's antitrust subcommittee in Washington on Tuesday to address allegations that U.S. wireless carriers are colluding to set prices for text messaging.
The collusion claims have been brewing for months now, and for good reason. The nation's top four cellular providers -- AT&T, Sprint, T-Mobile, and Verizon Wireless -- each charge 20 cents per text message, a rate that's doubled from 10 cents in 2006. However, only users with a pay-per-use (PPU) plan for texting face those steep rates.
Highway robbery? You bet. But apparently the PPU deal is for suckers only.Um, like me.
I did a quick comparison of the lowest-priced text message plans from the four major carriers. They are:
- AT&T: 200 messages for $5 a month (2.5 cents per message)
- Sprint: 300 messages for $5 a month (1.67 cents)
- T-Mobile: 300 messages for $5 a month (1.67 cents)
- Verizon: 250 messages for $5 a month (2 cents)
These estimates assume you're texting up to the monthly limit, of course, which probably isn't the case all the time. But even if you use half your allotted texts, you're still paying a small fraction of the PPU rate.
Am I cheap? Probably. But more importantly, I hate being forced to pay for services I don't want or need, such as 200 to 300 text messages a month. I send and receive maybe 10 to 15 texts a month. So is it fair that my carrier AT&T charges me eight times the bundled rate?
Yes, I know we're talking a few bucks here. So call me cheap. I'm arguing on principle.
According to a prepared statement by AT&T general counsel Wayne Watts, "less than 1% of AT&T's postpaid text messaging volume is handled on a PPU basis. Instead, the vast majority of our customers take advantage of AT&T's multiple messaging pricing plans, including those that provide a package of messages for a flat monthly rate."
So not only am I a sucker, I may be the only one.
Watts also points out that U.S. wireless carriers are "competing fiercely on many levels," and offer consumers a variety of voice and messaging plans.When it comes to texting fees, there's no collusion at all, he claims.
Damn. I just got a text message. Another 20 cents down the drain.
True? It's hard to say. The universal adoption of the 20-cent-per-message fee by the Big Four does look suspicious. Then again, when you've got numerous vendors duking it out in a highly competitive wireless market, collusion seems a lot less likely.
