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More antitrust class-action texting lawsuits threaten national wireless providers

September 16 2008 - 4:10 pm EDT | Jeffrey Silva | RCR Wireless News

The mobile-phone industry may be facing a legal texting tsunami in U.S. courts with the filing of two new antitrust class-action lawsuits against the nations largest wireless carriers filings that come on top of a separate price-fixing suit in Illinois federal court and scores of class-action complaints over extra charges for text messages and other content consumers claim they didnt authorize.

The filing of two additional antitrust class-action lawsuits in Ohio and Kansas federal courts further raises the financial stakes and legal exposure for AT&T Mobility, Verizon Wireless, Sprint Nextel Corp., T-Mobile USA Inc. and, in one case, Alltel Communications L.L.C.

The class-action antitrust texting suit brought against the four national wireless carriers in Illinois federal court attracted nationwide media attention. But that suit which alleges conspiracy among top wireless providers to increase the price of text messages over the past three years from 10 cents to 20 cents each may just be the beginning.

The two other antitrust class-action texting lawsuits identified today by RCR Wireless News strongly suggest the mobile-phone industry has a much bigger legal problem on its hands. At a minimum, the swiftly materializing antitrust class-action lawsuits appear to signal that trial lawyers across the country believe they have zeroed in on a legal vulnerability among service providers in the $143 billion mobile-phone industry, and that those plaintiffs attorneys may very well decide to pool resources to do battle against well-heeled cellular operators in the courtroom.

All told, the mushrooming of antitrust and billing class-action lawsuits against top cellular operators has begun to take on the appearance of the kind of massive litigation on early termination fees that resulted in settlements and court judgments costing wireless carriers tens of millions of dollars.

All three antitrust texting lawsuits against the industry (which all cover include essentially the same arguments) were filed shortly after Senate Judiciary antitrust subcommittee Chairman Herb Kohl (D-Wis.) announced a probe earlier this month into text message price hikes by top wireless operators in recent years. Kohl has asked the CEOs of the four national wireless carriers to respond to written questions by Oct. 6.

In addition to the three antitrust lawsuits and Kohls investigation, national wireless operators face a slew of class-action lawsuits on unexpected monthly charges on consumers bills for allegedly unauthorized services, including texting. The most recent suit of this kind was filed late last month against Sprint Nextelin U.S. District Court in Kansas City.

Texting constitutes an increasingly important revenue stream for cellular operators. According to mid-year figures by industry association CTIA, 75 billion text messages are sent every month. Overall, CTIA said wireless operators generate $27.5 billion a year from wireless data, a big chunk of which is generated by text messages.

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