Justice Dept. dismisses text-messaging probe

The U.S. Department of Justice finishes its investigation into doubled texting rates without taking action against wireless operators.

Marguerite Reardon Former senior reporter
Marguerite Reardon started as a CNET News reporter in 2004, covering cellphone services, broadband, citywide Wi-Fi, the Net neutrality debate and the consolidation of the phone companies.
Marguerite Reardon

The U.S. Department of Justice has closed its investigation of cell phone text message pricing without any action taken against wireless operators, The Wall Street Journal reported Friday.

The Justice Department launched its investigation into text message pricing in September 2008, after Sen. Herb Kohl (D-Wisc.) asked the agency to look into why wireless operators had doubled text-messaging rates from 10 cents per message to 20 cents per message sent and received. Kohl said he was concerned that the industry had colluded to increase rates at roughly the same time.

Wireless companies denied that they had colluded to set rates. And industry executives pointed out that consumers were actually paying less per text message because of plans that offered bundled packages or packages wit unlimited text messages.

But consumer groups such as Consumers Union say these plans, which cost anywhere from $5 to $20 a month, force customers to subscribe to more expensive plans. Consumer groups also argue that the cost charged for texting far outstrips the cost to network operators.

Even though the Justice Department has closed the books on this investigation, other government agencies are still investigating the wireless industry over other potential competitive issues. For example, the Federal Communications Commission is looking at competition in the wireless market, including exclusive handset deals and early-termination fees.