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About those text message fees...

Tue Jan 6, 2009 2:43PM EST


Remember when you used to pay a dime for a text message... or maybe even a nickel? And now you likely pay 20 cents a pop, coming and going. Everyone complains about text prices (unless you're on volume, per-month plan), but in the end we always assume it's part of the cost of doing business... that carriers have had to raise prices because their costs have been increasing. How else after all to explain 100 percent price inflation in the last three years?

Perplexed, Wisconsin Senator Herb Kohl looked into the matter, polling the four major U.S. wireless carriers about their text message pricing policies. The result? Quite the runaround, stonewalling, and misdirection. And there's no surprise why carriers don't want to talk much about the issue: Text messages don't cost much to transmit.

How little do text messages really cost? The truth is that they're so tiny -- 160 characters is the usual max -- they functionally cost nothing at all. Yes, carriers need to invest in hardware and infrastructure to deal with the messages, but all of that was put in place long ago (and well before the price hikes began in earnest). As a point of reference, today a $100 hard drive can store about a billion text messages. Transmission costs are even less than that and decrease with scale. According to one computer science prof who's studied the matter: "Operating costs are relatively insensitive to volume. It doesn’t cost the carrier much more to transmit a hundred million messages than a million."

The very best part of this discussion comes at the end of the New York Times piece that blows the lid off one of the biggest scams going in the telecom space: "Once one understands that a text message travels wirelessly as a stowaway within a control channel, one sees the carriers’ pricing plans in an entirely new light. The most profitable plan for the carriers will be the one that collects the most revenue from the customer: unlimited messaging, for which AT&T and Sprint charge $20 a month and T-Mobile, $15. Customers with unlimited plans, like diners bringing a healthy appetite to an all-you-can-eat cafeteria, might think they’re getting the best out of the arrangement. But the carriers, unlike the cafeteria owners, can provide unlimited quantities of 'food' at virtually no cost to themselves -- so long as it is served in bite-sized portions."

What's next? The price-fixing lawsuits, 20 of which have already been filed around the country.


Link:
About those text message fees... : Christopher Null : Yahoo! Tech
 

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monopolies.
 

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i mean, phone companies provide a service for a fee. i remember back in the day we all had to worry about roaming fees and whatnot. it was something like $1 a minute if you were roaming on another network. at least we dont have that anymore, so as time goes on and technology gets better and more efficient, the services provided becomes cheaper.
 

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I have unlimited texting and don't mind payin the $15, much better than them raping me for sending more than 200 texts a month or whatever...
yeah seriously, i used to do almost 5000 texts a month.
at 20 cents a piece that's an extra 1000 bucks on my bill.
i'll pay the 15. actually i only pay 10 cuz i got unlimited back when tmobile first offered unlim. as a promo for 10/mo.

picture messages still cost me tho. :/
 
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