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The fairly sudden, seemingly inexplicable rise in the price of text messages is setting off alarms. In 2005, Sprint, Verizon Wireless, AT&T and T-Mobile all charged ten cents per text message. Sprint doubled the price to twenty cents in 2007, and by the end of this year, all three of the other major carriers will have followed suit.
According to Consumers Union, the nonprofit publisher of Consumer Reports, 600 text messages contain as much data as a one minute phone conversation. At 20 cents a pop, 600 text messages would cost $120.00. Put in those terms, the price itself seems outrageous, and the sudden, uniform nature of the increase is raising eyebrows. The Washington Post reported that Senator Herb Kohl of Wisconsin has sent letters to all four companies demanding an explanation for the increase. “It appears each of (the) companies has changed the price for text messaging at nearly the same time, with identical price increases,” Kohl wrote. “This conduct is hardly consistent with the vigorous price competition we hope to see in a competitive marketplace.” Senator Kohl’s letter requests a response by October 6, 2008.
Senator Kohl’s letter was referenced in a complaint filed this month in U.S. District Court in Chicago. The proposed class-action suit, filed on behalf of customers of all four companies, alleges price fixing. According to the Toledo Blade, similar complaints were also filed after Senator Kohl’s letter in Ohio and Kansas.
The question is: Can any of these lawsuits survive long enough to begin discovery? In Bell Atlantic v. Twombly, the Supreme Court held that evidence of parallel behavior among communications companies was not enough to get a case beyond the pleading phase. What could any of the text messaging suits have in the complaint besides evidence of parallel behavior? What else could plaintiffs in any similar suit against communications companies hope to present before they are allowed to do discovery?
– Liz Kelly
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