Home U.S. Government Says Overcharging for Text Messages is A-OK

U.S. Government Says Overcharging for Text Messages is A-OK

If you’re still paying a per-text message fee, we can only figure one of two things. Either you haven’t opened up your phone bill and taken a look at how much you’re being charged compared to a monthly plan, or you’re one of the remaining troglodytes that doesn’t really use text messaging. Either way, you’re about to pay more, and the government couldn’t care less.

An article in the gadget guide Electronista pointed out this morning that a recent investigation by the U.S. Department of Justice is over and the verdict is in.

Between 2005 to 2008, the number of major cell phone carriers dropped from six to four, and text message prices doubled, going from 10 cents to 20 cents a piece. That is, competition decreased and prices increased – a telltale sign of an industry moving closer to a monopoly.

The four major carriers involved were AT&T, T-Mobile, Sprint Nextel and Verizon Wireless.

Wisconsin’s Democratic Senator Herb Kohl and the Senate antitrust subcommittee decided to look into the companies’ practices and urged an investigation. The Justice Department has now declared that investigation over and announced that they will do nothing to stop these companies from charging as much as they please for a service that costs them nearly nothing to provide.

The DOJ said they found no evidence that the companies had worked together in raising text message fees, despite the fact that all increases came within months and even weeks of each other.

Randall Stross of the New York Times shows us in a recent article how the cell phone companies are even making a big profit on customers with monthly plans, comparing users to customers at an all-you-can-eat buffet, and the companies as the cafeteria owners.

Customers with unlimited plans, like diners bringing a healthy appetite to an all-you-can-eat cafeteria, might think they’re getting the best out of the arrangement. But the carriers, unlike the cafeteria owners, can provide unlimited quantities of “food” at virtually no cost to themselves – so long as it is served in bite-sized portions.

So, keep text messaging away and filling the cell phone companies’ coffers – we know we will.

Photo of cell phone by Flickr user Noel A. Tanner.

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