Senator asks cell providers to explain text message pricing
That text messages are a baldfaced scam is undeniable. It is outright extort: that Sprint, AT&T, Nextel and T-Mobile charge 20 cents per text message — 100% more than they charged in 2005 — is downright collusion: how could 160 characters of alpha numeric text flying through the air cost 20 cents? There's a reason "free text messages" are the first thing your carrier offers you when you call to complain: they should be free to begin with.
What's more surprising is the scam is so apparent that even a United States Senator is getting involved. Senator Herb Kohl of Wisconsin, chairman of the Senate's antiturts committee, has sent a letter to the four big cell carriers, asking to explain the rising costs.
What is particularly alarming about this industry-wide rate increase is that it does not appear to be justified by rising costs in delivering text messages. Text messaging files are very small, as the size of text messages are generally limited to 160 characters per message, and therefore cost carriers very little to transmit. Text messaging files are a fraction of the size of e-mails or music downloads. Also of concern is that it appears that each of companies has changed the price for text messaging at nearly the same time, with identical price increases. This conduct is hardly consistent with the vigorous price competition we hope to see in a competitive marketplace.
In short, he's accusing them of collusion. And he's probably right. Let's hope that this is just the first step in a serious Senate inquiry into the matter. Text message prices are downright theft.
Kohl calls on cell phone companies to justify rising texting rates [Senate.gov via Valleywag]
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Awesome.
I wonder if it would be good or bad for their case if they suddenly said "whoops, they're $.05/ea."
There seems to be a problem with that link…
'bout fucking time.
i say, before they explain themselves, we give them immunity to any sort of punishment. isn't that the normal deal for the telephone companies?
yeah , in 2001 I got a plan that gave me unlimited text and internet on a retro phone for about $5.99
7 years later I am lucky to find a plan that does the same for less then $30.
Either Technology moved backwards or we are looking at collusion, price fixing, and all that other nasty corporate crap.
If these guys are found guilty of a Anti-trust violation, can I get years of high fees back?
I always assumed that the price hike was to make up for lower revenues from people switching to "all you can eat" text messaging plans. They get less per txt from those plans, so they charge more per txt for the a la carte plan to make up for it.
It's not like people can't choose NOT to text, though. I mean, are we seriously such a co-dependent society that we can't go 15 minutes without knowing what everyone we know is doing and updating them of our whereabouts? (he says as he adds his 2 cents to an internet discussion during the middle of the work day)
In the end, we will learn that such a cost was Necessary to Protect Us from Terrorists in the War on Terror. Also, that middle management excursion to Jamaica on the corporate dime, unreported to shareholders: Necessary to Protect Us from Terrorists in the War on Terror. Those unreported and misreported back-dated stock options grants? Necessary to Protect Us from Terrorists. Incredibly overpriced government contracts that violate fifteen privacy laws apiece? NTPUFTITWOT. Senators retiring from committees that govern the telecom regulatory environment to private-sector telecom lobbying and telecom executive careers? NTPUFTITWOT.
It's necessary to protect their voice-call income, since if text was priced where it should be for bandwidth used it'd take an even larger share of the traffic.
I have no opinion re whether this is collusion or everyone just taking everything the market will bear and competition keeping them from raising the price enough to make the customers leave.
Personally, I mostly want my phone to be a phone; I won't send short text messages unless it's significantly cheaper than the equivalent voice call. I do actually prefer e-mail to voice for many things, but that's for non-interrupting communication and even the best phone is an awful entry/reading device for serious writing.)
About time the antiturts committee got off it's butt and did something.
#5: I'd be awesome to get the fees back, like half the planet would have a year of free cellphone use.
Technogeek:
"It's necessary to protect their voice-call income, since if text was priced where it should be for bandwidth used it'd take an even larger share of the traffic."
Analysis is as follows:
Every single cellular carrier prioritises their traffic. It's called QoS, and overhead traffic (call coordination, tower enrollment, network management) gets top priority, followed by voice call data, followed by IP-data-data (downloads, pictures, videos, ringtones, whatever) followed at the very, very bottom of the priority ladder by text messages - because they are tiny and asynchronous and inherently connectionless.
Per your argument's logic, this move by the carriers is a matter of pricing to protect their business model.
Many carriers now offer unlimited talk time - so for those that do offer unlimited talk time, it would make sense to their business model - and to their own energy and traffic costs - to offer free text messages in the same plan as the unlimited talk time.
Historically, many - most, in fact - have not done so.
Text Messaging is priced where it is priced because of collusion among carriers, who use it as a cash cow.
Also of concern is that it appears that each of companies has changed the price for text messaging at nearly the same time, with identical price increases.
You've got their number Senator, but wouldn't that number make a handsome lever to something else.
Antiturts is without a doubt the single coolest word I have read in over a week.
Well, everybody has a beef with turts, so we are all, in a way, members of the antiturts committee.
We've had free text on both phones for five years, everytime our contract changes that freebie stays or we leave.
The fact that I pay £0.10 for 160 characters, compared to £0.30 for about 15,000 in an MMS just shows how much of a rip-off texts are. They're both a rip-off, but SMS is several orders of magnitude worse.
I pay 20¢ for a text message, and 42¢ for a stamp.
Explain that.
I've been arguing this for years and it's gotten me nowhere so far... Text messages are actually transmitted via the voice portion of the phone, they're not actually a data service. They are simply a one-second phone call... So, when I call up and ask why text rates have gone up, and they pull out a story about how they've been upgrading their data networks, I call them on their bullshit and ask them to ask their tech department how texting works.
I've always been able to get them to drop the charges this way.
One thing that's been really irking me lately is the price of voicemail... Here in Canada there is a monopoly on GSM phone service, and recently both Rogers and Fido (really the same company) raised their monthly voicemail charge to $7... That's right, SEVEN DOLLARS.
I've argued this out with managers saying in the 1980's I was able to get voicemail for a dollar, and that the technology hasn't significantly changed since then. I was given the argument that they've needed to upgrade their voicemail system to accommodate increased demand... My counter argument that I can set up a voicemail server on a 15 year old computer capable of handling thousands of subscribers didn't get me very far, their suggestion was "well why don't you?"
My teenage daughter was grounded from her phone for a month, so she was sneaking my wife's after we went to bed.
We found out after a month and a half, and were on the hook for over 6000 messages. No talk of free texting was brought up, but I did talk them down to a $1000 bill. :-/
When I first heard that messages doubled in price I was flabbergasted! If they want to make money, ok, unlimited data plans are dangerous, but charging 20 cents to send a kilobyte of data? This just doesn't add up!
They will explain that the increase is to make up for investment losses due to the housing "crisis." How could their CFOs have seen that coming?
Then, they may be fined as a slap on the wrist, and will pass on those costs to us 100X over. So in the end we will have to pay for having paid too much in the past.
I'm thinking that I can reach all my local friends by CB radio if I have to...
Now if they could only do this with the oil companies.
I'm pretty sure they did do this with the oil companies a few months back, didn't they? I thought that I saw something in passing where a few oil company execs were in front of some sort of panel explaining how gas pricing worked, or something like that.
#22 & #23,
They did indeed do that. They were meant to defend their profits at a congressional hearing.
Basically, they whinged on about the expense of opening new drilling operations and argued petulantly that their $18+ billion in subsidies should continue despite raking in so much money that one of the executives, when asked directly, couldn't recall how much.
I guess the next logical step is for TelCos to start having crazy sex parties with government regulators. Make sure to invite the hookers.