Verizon Communications and AT&T have denied that they colluded in setting prices for text messages, insisting that prices had fallen for most customers and that the US market is competitive.

Reuters reported that Senator Herb Kohl, chair of the Senate Judiciary Committee’s antitrust subcommittee, said he was concerned that the four largest cell phone companies doubled their text message rates from 10 cents in 2006 to 20 cents in 2008.

“These sharp price increases raise concerns. Are these price increases the result of a lack of competition in a highly concentrated market?” he asked.

Senator Kohl also said the subcommittee has urged the Justice Department to scrutinise future mergers or allegations of anti-competitive practices in the industry.

“The faulty notion that prices for text messaging have risen derives from an unduly narrow interest in the trend of a single pricing option for text messaging services, the pay-per-use option, when the vast majority of AT&T’s customers do not choose that option,” Wayne Watts, general counsel of AT&T, was quoted saying by Reuters.

The general counsels of Verizon and AT&T argued that the price increases only affected 1 percent of text messages sent because most consumers bought volume plans that lowered the per-message cost.