Consumers Union Testifies at Senate Hearing about Text Messaging Rate Increases

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We empower consumers through education and action about communication and media issues involving telephone, cable, Internet and wireless services and equipment.

06/15/2009

Washington, DC—Joel Kelsey, Policy Analyst for Consumers Union, will testify today before the Senate Judiciary Subcommittee on Antitrust, Competition Policy and Consumer Rights on the high price of cell phone texting and other cell phone usage charges. Consumers Union is the nonprofit publisher of Consumer Reports magazine.

Highlights from Kelsey’s testimony are below:

“Wireless carriers have heavily adopted parallel, and increasing, pricing structures to maintain high text messaging rates. Since 2003, the price of text messaging has quadrupled for some carriers. More recently, since 2005, every major carrier has at least doubled the prices for text messaging from ten cents to twenty cents per message. This rising cost in service is a head-scratcher for consumers, because text messaging uses less data than almost any other service on a wireless network. Six hundred text messages contain less data than one minute of a phone call.

“Text messaging files are very small, and the price of their transmission is negligible for the provider. A message travels as a wireless signal from the handset, through the wired telephone networks, and as a wireless signal to the receiving handset. The text message is a free rider…Thus, any revenue received by the provider on incremental text message usage is nearly pure profit.”

The full testimony can be viewed here:

www.consumersunion.org/pdf/Senate-testimony-wireless-0609.pdf

Media Contacts:
David Butler, 202-462-6262, Dbutler@consumer.org
Kristina Edmunson, 202-462-6262, Kedmunson@consumer.org

Consumers Union, publisher of Consumer Reports, is an independent, nonprofit testing and information organization serving the consumer. We are a comprehensive source of unbiased advice about products and services, personal finance, health, nutrition, and other consumer concerns. Since 1936, our mission has been to test products, inform the public, and protect consumers.