AT&T, Verizon: We’re not price-fixing

On Capitol Hill, executives from AT&T and Verizon Wireless lawmakers that there’s no price-fixing going on, and that text message prices are better than ever.

The hearing before the Senate Subcommittee on Antitrust, Competition Policy, and Consumer Rights was inspired by U.S. Sen. Herb Kohl (D-Wis., pictured), who last fall sent a letter to the four major wireless carriers asking why their text messaging rates had doubled since 2005 to 20 cents per message. Kohl’s letter prompted 37 class-action lawsuits that allege price-fixing.

As expected, executives denied that anything illegal was going on, CNet reports. Wayne Watts, general counsel for AT&T, noted that the lawsuits don’t cite any specifics on collusion, such as time, place or people involved. All but one of the lawsuits base their allegations on Kohl’s letter, he said.

Verizon’s general counsel, Randal Milch, argued that text messaging is cheaper now than it was a few years ago for people who subscribe to a texting plan. He said they pay less than a penny per message, a lower rate compared to 2006, and texting has increased six-fold as a result.

Suspicious as climbing text rates may seem, without proof of collusion it’s hard to argue that anything illegal is happening here. It seems the plaintiffs in the lawsuits want wireless carriers to engage in price wars, but the government can’t force that. Besides, texting is in high demand, as evidenced by the trillion text messages sent in the United States 2008. As long as there’s no actual price-fixing going on, the companies have every right to charge more for a popular service.