Mystified as to why the cost of a text message from all the major cell-phone carriers rose to a hefty 20 cents apiece in recent years? This in spite of the continuing rise in popularity of messaging—and, presumably, its value as a competitive feature of cell-phone plans?

Joel Kelsey, an advocate with
Consumers Union, the publisher of Consumer Reports, today called the price increases in text messaging “a failure of competition, because the increases are manifestly unnecessary to cover provider costs.”

Kelsey emphasized that text-message files are very small—with five hundred of them containing less data than a one-minute voice call, he says. Further, Kelsey points out, there’s been an “explosion of texting” in recent years, with carriers reporting up to a six-fold rise in text transmissions within just a few years.

“Carriers should be experiencing economies of scale and sharing that savings with consumers,” says Kelsey. Prices are discounted heavily for text messages bought in monthly bundles that typically run into the hundreds. But carriers have steadily, and in lockstep, raised the price of sending single texts.

As CU has noted, less than four years ago rates to send a text message were 10 cents per text at the nation's four big wireless carriers: AT&T, Sprint, T-Mobile, and Verizon Wireless. Each company then raised rates to 15 cents, then to 20 cents.

To CU, these text-message rates, along with exclusivity
deals for certain cell phones, exemplify the need for “more oversight” into the
wireless marketplace, to “determine if government intervention is necessary.”

You can view the testimony of Kelsey and others as part of a
live webcast on the hearing, which is scheduled to begin at 2:30 pm today. —Paul Reynolds

With the iPhone 3G S launching Friday, available exclusively from AT&T, and the Palm Pre having just launched, available exclusively from Sprint, it's a good week to ask: Is having particular mobile phone handsets available from only one carrier a good thing for consumers?

Maybe not, according to four senators who sent a letter yesterday to Federal Communications Commission (FCC) Commissioner Michael Copps to review the exclusive arrangements between wireless carriers and cell phone manufacturers. Advocates, including Consumers Union, publisher of Consumer Reports, are also weighing in against such deals.

The bipartisan group—comprising Senator John Kerry (D-Mass.), Chairman of the Commerce Subcommittee on Communications, Technology, and the Internet, along with Senators Roger Wicker (R-Miss.), Byron Dorgan (D-N.D.), and Amy Klobuchar (D-Minn.), all members of the U.S. Senate Committee on Commerce, Science & Transportation—today asked the FCC to "examine this issue carefully and act expeditiously should you find that exclusivity agreements unfairly restrict consumer choice or adversely impact competition in the commercial wireless marketplace."

Also, in remarks prepared for delivery later today to another congressional committee—the Senate Judiciary Committee—Joel Kelsey, a policy analyst with Consumers Union, says that handset exclusivity agreements "artificially limit consumer choice, restrict device innovation, and lead to higher prices." In addition, countering industry arguments that such exclusivity arrangements are an essential feature of the cell-phone marketplace, Kelsey points out that "handset manufacturers in Asia and Europe are able to sell 70-80 percent of…phones independent of exclusive deals."

More later on Kelsey's remarks to the committee on another hot-button consumer issue with cell phones: The uniformly—some say suspiciously so—high price of sending text messages.

Meantime, the Commerce Committee holds a hearing later this week on cell-phone exclusivity. —Paul Reynolds

Nine months ago, Panasonic created a lot of buzz in the photo industry by introducing the first micro four-thirds digital camera, the Lumix DMC-G1, $800. This camera combined key SLR features—a large image sensor and interchangeable lenses—with the smaller size and weight of a point-and-shoot. Today, Olympus is generating some buzz of its own with the introduction of its first interchangeable-lens point-and-shoot, the 12-megapixel E-P1.

In some ways, the E-P1 outdoes Panasonic (which offers both the G1 and the GH1, $1500, which includes HD video features) by offering a very compact and lightweight camera. According to the specs, it weighs just 11.8 oz., which is a bit lighter than the 14.9 oz. Lumix, half the weight of many models in our Ratings of digital SLRs,  and lighter than a number of choices in our point-and-shoot camera Ratings. (Ratings are available to subscribers only.) Its dimensions are also impressive, particularly since it's so thin. At 4.74"(W) x 2.75"(H) x 1.37"(D), the Olympus is more compact than the Lumix, which is 4.9"(W) x 3.3"(H) x 1.8"(D), and all other SLRs.

Yet, like the G1, the E-P1 has compromises of its own. There's no built-in viewfinder, which is one of the highlights of the Lumix micro four-thirds cameras. You can get a viewfinder accessory if you buy the E-P1 with the 17mm fixed lens, but it appears you have to slide it into the hot-shoe, which means you'll be unable to use an external flash. It also doesn't have Panasonic's swiveling LCD, although having one may have increased its thickness.

One element that stands out is E-P1's design. Olympus decided to take a chance and bring back a motif it used in a film camera from the middle of the last century. Based on its Pen series of "half-frame" film cameras, Olympus seems to have produced a sleek and stylish camera that looks substantial and solid. I particularly like the leathery-looking handgrip.

In addition to size and design, the E-P1 is full of features, including HD video with stereo audio, body-based image stabilization, a dust-reduction system, and a few magnification modes, which allow you to, among other things, magnify the central part of your subject 5x by turning the focus ring.

At the time of this announcement, Olympus has only two lenses available for the E-P1: the 14-42mm zoom lens and the 17mm fixed lens. Yet, you should be able to buy any micro four-thirds lenses that are available from Panasonic, such as its 14-140mm, 7-14mm or 45-200mm lenses. In addition, you can buy a lens adapter for the E-P1 that will let you use a four-thirds SLR lens, from Olympus, Panasonic, Leica or third-brand camera companies, such as Sigma. However, my guess is that some of these full-size SLR lenses may dwarf the E-P1 and make it a bit unbalanced.

The E-P1 will ship in July and be available for $750 for the camera body only, $800 with a 14-42mm lens and $900 with the 17mm lens and optical viewfinder accessory. —Terry Sullivan

Nine months ago, Panasonic created a lot of buzz in the photo industry by introducing the first micro four-thirds digital camera, the Lumix DMC-G1, $800. This camera combined key SLR features—a large image sensor and interchangeable lenses—with the smaller size and weight of a point-and-shoot. Today, Olympus is generating some buzz of its own with the introduction of its first interchangeable-lens point-and-shoot, the 12-megapixel E-P1.

In some ways, the E-P1 outdoes Panasonic (which offers both the G1 and the GH1, $1500, which includes HD video features) by offering a very compact and lightweight camera. According to the specs, it weighs just 11.8 oz., which is a bit lighter than the 14.9 oz. Lumix, half the weight of many models in our Ratings of digital SLRs,  and lighter than a number of choices in our point-and-shoot camera Ratings. (Ratings are available to subscribers only.) Its dimensions are also impressive, particularly since it's so thin. At 4.74"(W) x 2.75"(H) x 1.37"(D), the Olympus is more compact than the Lumix, which is 4.9"(W) x 3.3"(H) x 1.8"(D), and all other SLRs.

Yet, like the G1, the E-P1 has compromises of its own. There's no built-in viewfinder, which is one of the highlights of the Lumix micro four-thirds cameras. You can get a viewfinder accessory if you buy the E-P1 with the 17mm fixed lens, but it appears you have to slide it into the hot-shoe, which means you'll be unable to use an external flash. It also doesn't have Panasonic's swiveling LCD, although having one may have increased its thickness.

One element that stands out is E-P1's design. Olympus decided to take a chance and bring back a motif it used in a film camera from the middle of the last century. Based on its Pen series of "half-frame" film cameras, Olympus seems to have produced a sleek and stylish camera that looks substantial and solid. I particularly like the leathery-looking handgrip.

In addition to size and design, the E-P1 is full of features, including HD video with stereo audio, body-based image stabilization, a dust-reduction system, and a few magnification modes, which allow you to, among other things, magnify the central part of your subject 5x by turning the focus ring.

At the time of this announcement, Olympus has only two lenses available for the E-P1: the 14-42mm zoom lens and the 17mm fixed lens. Yet, you should be able to buy any micro four-thirds lenses that are available from Panasonic, such as its 14-140mm, 7-14mm or 45-200mm lenses. In addition, you can buy a lens adapter for the E-P1 that will let you use a four-thirds SLR lens, from Olympus, Panasonic, Leica or third-brand camera companies, such as Sigma. However, my guess is that some of these full-size SLR lenses may dwarf the E-P1 and make it a bit unbalanced.

The E-P1 will ship in July and be available for $750 for the camera body only, $800 with a 14-42mm lens and $900 with the 17mm lens and optical viewfinder accessory. —Terry Sullivan