11 September 2008

Regulation of Text Messaging?

In this previous post, I had discussed rising text message rates in the US. According to this article in Forbes, it has gotten the attention of Sen Herb Kohl (D-Wis) as well. Here is the announcement from his website. While specific action is unlikely in this session given the upcoming election, Forbes notes a possible connection with the EU's action on mobile phone price regulation.

While Kohl blames this on industry consolidation, I believe that there are other interpretations that should be considered. For one, the price increase is for a-la-carte messages, not for packages or bundles of messages. Second, carriers often offer cheap or free messages between users in their networks as a way to increase switching costs for users. Should they be prevented from doing this?

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