Verizon and AT&T defend thuggish text messaging prices

No collusion here, claim Verizon and AT&T, even though both carriers (as well as Sprint and T-Mobile) doubled the price to send a text message from 10 cents in 2006 to 20 cents in 2008.

Reuters:

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

So it’s okay to double an already ridiculous price because any practical consumer that uses text messages has been forced into paying for an additional text messaging plan?

“We’re not extorting this man, your honor. It’s just cheaper to pay us not to break his legs than it is to pay for a doctor.”

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19 Responses to Verizon and AT&T defend thuggish text messaging prices

  1. rose says:

    1. my pre-paid plan was with cingular until at&t bought them out, and that is when my text cost doubled.

    2. @heavyg, and who would my other choice be?

    3. I received a text from at&t a few months ago informing me that i could no longer call 911 for free, (thankfully i’ve not ever had to) but i’m pretty sure that is outrageously illegal for them to charge me for an emergency call.

  2. Sondra Satz says:

    I have a cell phone, but I’m on social security and can’t affort the type of phone that allows for txt messages. This doesn’t seem consistent with Ellen. If you can’t text, you can’t play.
    That’s “rude, crude, and socially unacceptable.”

    Sondra Satz
    rebate4u@bellsouth.net

  3. HeavyG says:

    Gee – what if instead of everybody whining about “ridiculous prices” they just decided to avoid using the service – you know, a boycott until the companies change their practice?

    Supply and demand. It really is that simple.

    Of course for those that texting is like crack and you just can’t do without it…well you have other more serious problems than the price of texting.

  4. Anonymous says:

    stumble, and digg this page so that maybe sometime someone will do something about it

  5. elisd says:

    @#4: No, pricing can be criminal when prices are set by anti-competitive collusion, as seems to be the case here. How else would all three companies have changed their prices to exactly the same thing at exactly the same time?

  6. Charles Dunham says:

    My t-mobile prepaid plan does outgoing texts for .10 and incoming for .05. This seems like a fair price to me. Maybe other states have higher fees…

  7. James says:

    It’s dishonest to call it extortion, and dishonest to suggest that the pricing is criminal. NO prices are criminal, they are all voluntary. And you volunteer to hand over your cash for a service, Verizon is not an authority that takes it by force.

    The service isn’t something you’re entitled to, and Verizon is stealing if it charges you more than you’d like. Verizon owns itself. If Verizon wishes, it could shut down its entire operation and you would have no say.

    As for the pricing packages, it’s more economic for Verizon to bundle a charge that may or may not match up to actual text message usage, so that they can better budget for the year. They try to make this as close as possible to what people are willing to pay, so that one of their competitors doesn’t name a different price and take those customers away.

    It’s called capitalism: voluntary private exchange of goods and services for a price.

  8. lautaylo says:

    @HeavyG – it’s a Catch-22. I don’t text, but I still have to pay if someone texts me. If I turn off text service (according to AT&T), I will also have to turn off voicemail. I’ve already turned off the data plan because it’s highway robbery and doesn’t limit my functionality, but the company has found a way to bilk me out of an extra quarter every time one of my friends is too lazy to call me.

    That having been said, I understand that texting can be quite useful. I simply can’t afford the extra money every month to upgrade to an SMS plan. I also don’t appreciate being made to feel like I’m a dinosaur for not being able to text my little heart out. Damned if you don’t, damned if you do.

  9. dole says:

    Kind of old news… I think a boycott is pretty futile. Most of us realize that text messaging is one of the more expensive methods of data communication per KB or MB out there. It’s like going to the movies starving and they’ve raised the price on Sour Patch Kids to $30 a box. There’s no reason for them to lower the prices because they’re all the same regardless of where you go… I do wish the gov’t/FCC would investigate this further, though. And Alowishus, we’re not against text, we’re not against texters, but we are against those telcos

  10. alowishus says:

    But what about ruggish text message pricing?

  11. Fran Taylor says:

    Bwahaha. Those messages cost the phone company something like 0.00000001 cents to transmit. It’s actually FREE because those messages travel as noise in the voice stream. Anyone who pays money for this is just loony.

    It’s a tax on stupid people.

  12. Dave says:

    There are situations where high pricing is ethically and morally unacceptable, but that’s primarily for basic needs like water, food, and housing. It’s wrong to charge people a tenth of their income for access to meager amounts of water, for example. Criminality isn’t the issue, the (U.S., assuming since the conversation’s about U.S. providers) government can make anything criminal as it can whip up a vague explanation as to why it’s constitutional or necessary for national security.

  13. GeraltW says:

    I wonder how many people either will not know that they should claim, or will not bother to claim back the hidden charges. This is a prime example why I will not sign a contract with a cell carrier. It really seems sometimes as if the descriptions of charges are intentionally indiscernible. So it’s easy to see how this could happen to literally thousands of people. And I’m sure Verizon is not the only company involved in this kind of scheme.
    I prefer to use prepaid phones where I pay for what I use, with no hidden charges added. For instance: my Straight Talk plan will give me 1000 minutes, 1000 texts and 30mb data for $30. Not $35-$40 after all the added hidden charges! And with prepaid phone options now often cheaper than contracts there really is no reason to sign on the dotted line anymore.

  14. jennix says:

    @James – No, capitalism is the practice of using one’s capital to raise more capital. It forces no contextual or moral standards on its practice.

    On the other hand, “voluntary private exchange of goods and services for a price” is illegal in most countries, especially for large amounts of tender or property. This is because “voluntary” can vary wildly from day to day, product to product, and service for service, and because the government needs its cut.

    Protection from violence is a service offered by armies, the police and organized-criminals; the difference is in the motivation. Capitalism and opportunism are often mistaken for each other, and the line between them is gray.

    Taking a fair profit for fair offering is called “good business”.

    Taking everything you can and keeping it is called “stealing”.

    Taking everything you legally can and trading the minimum legally-required offering in return is a by-product of something else altogether, called “corporatism”.

    The question at hand is whether all four of the four providers of a service should be allowed to set ARBITRARY prices for commodity services. IMHO, they’re not competing, they’re colluding.

  15. Grimnir says:

    Stupid pro-corporate commenter. “Well, maybe they’re not huge dicks, and it’s just capitalism at work”

    You know how SMS works? It’s sent over the packet that tells you how many bars of service you have. It’s literally built right into the system itself. It uses absolutely 0 bits of extra bandwidth. It’s a free service that companies in the US charge lots of money for. Why? Because we put up with it. Because we as consumers lack the access to capital to create a meaningful competitor– telcos being state-sponsored oligopolies and all, utilizing a system of economic development that won’t give you the money unless you can offer investors a better profit margin.

    Please note: it’s NOT if you can offer customers a better service and/or a better price– it’s if you can offer investors a better profit margin. It is an economic inefficiency that discourages innovation, inhibits the maximization of resources via honest competition, and makes sure we all hate the companies we are forced to do business with if we want the services necessary for active participation in our current economy.

    Is it illegal to abuse your position of economic power to make obscene profits off of extremely inexpensive services? Possibly, and certainly AGs around the country should be investigating the possibility of collusion here. SHOULD it be illegal? AB SO FUCKING LUTELY. Why? Because capitalism only works as an economic system when the barriers to entry are low enough to support significant competition, and that is not the case here.

  16. Whitney(: says:

    If you have verizon and unlimiting texting ot verizon only does at&t count as free?

  17. Daemon says:

    The issue is that they would still be showing a massive profit if they charged a penny per message. Text messages cost them next to nothing. In theory, the price should be going down, not up.

    This is very obvious price gouging and market collusion.

  18. merreborn says:

    NO prices are criminal, they are all voluntary

    Except during a civil emergency, in which case price gouging is a felony.

  19. Jcp says:

    It’s really not a crime.. If you signed a damn contract to pay what ever the price is.. Then it’s really your fault. I know AT&T has it going on with texting.. And I think unlimited is the right way to go if you text alot. As in for me.. I have no plan for text and if my friends decide to send a “hi” .. Just a damn hi.. 20 cents taken away. So I’m just going to turn it off to stop those damn “hi” messages

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