Cell phone text messaging rate increases and the state of competition in the wireless market: hearing before the Subcommittee on Antitrust

Original publisher: Washington : U.S. G.P.O., 2010. LC Number: KF26 .J8352 2009d OCLC Number: (OCoLC)694874526 Subject: Text messages (Telephone systems) -- Rates -- United States. Excerpt: ... 11 Internet. They use this control to set high barriers to entry and charge their competitors exorbitant special access fees in order to offer mobile Internet services. Consumers are paying the price. As we have heard, U.S. mobile phone subscribers pay more annu-ally than customers overall and most other developed nations. The $ 506-a-year figure that you mentioned in your opening statement can be compared to the United Kingdom at $ 374 or consumers in Spain at $ 293. Within this consolidated context, we continue to see questionable behavior that is locking consumers in and locking competitors out. Here are three examples. First, consumers face limited access to cell phones because car-riers demand that cell phone makers sign exclusive contracts. This precludes them from offering their phone on any other network. This has the multiplied effect of not only limiting consumer choices, but it also raises a barrier to entry for smaller competitors that cannot get their hands on the kinds of phones that consumers de-mand. Yesterday, Senators Kerry, Wicker, Dorgan, and Klobuchar sent a letter to the FCC addressing this, and we commend them for doing so. Second, after signing lengthy contracts for bundled service, if a consumer is dissatisfied with their service, they cannot easily switch providers. They face high early termination fees that are pu-nitive in nature, and if the phone they bought is locked to that par-ticular carrier, when they switch they end up with an expensive brick in their hand rather than a cell phone. Third, customers face prices for their data plans that, just like text messaging, seem far removed from any possible cost, indi-cating a stark absence of provider rivalry over data pricing. I pro-vided several examples in my written testimony of consumers th...