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OMG Did U C What U R Paying 4 Texting?

CmdrTaco posted more than 5 years ago | from the stop-texting-me-dammit dept.

Cellphones 721

theodp writes "If you thought gas prices were rising too quickly, writes CNET's Marguerite Reardon, check out what's been happening to text messaging. Since 2005, rates to send and receive text messages on all four major carrier networks have doubled from 10 cents to 20 cents per message. If the same pricing was applied on a per-byte basis to a single MP3 song download, it would set you back almost $24,000 according to one estimate. So why are carriers gouging their customers so? Because they can, concludes Reardon."

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721 comments

Some data 4 U (4, Informative)

suso (153703) | more than 5 years ago | (#24029231)

I was recently reading about the whole George Vaccaro [blogspot.com] fiasco and did some calculations on how much the cost of transfer is over a T1 line vs. what companies like Verizon charge for data transfer. Its astonishing that people put up with this:

  • Cost of a T1 line: $600 (Verizon's cost would be less and they probably have higher capacity lines in many places.)
  • Monthly bandwidth capacity of a T1: 40,687,488,000 Kilobytes (86,400 sec. * 30.41 avg days * 197 KB/sec)
  • Cost per KB over a T1 line: 60,000 cents / 40,687,488,000 KB = 0.0001159190 cents per KB = $0.000001159190 (for all those Verizon reps out there)
  • Verizon's charge per KB to the customer: $0.02
  • Verizon's markup on data transfer: x 17,253!!!!!
  • Screwing generation Y & Z: Priceless

Why do people put up with this? Some people might say I'm comparing apples to oranges, but Apples dont' cost 17,000 times more than oranges. There should be a class action suit over this.

Whoops, sorry (4, Informative)

suso (153703) | more than 5 years ago | (#24029277)

The 40,687,488,000 should actually be 517,602.528.0 I made a mistake the first time I did this and corrected the prices, but didn't correct the rest of the comment. The rest of it is right.

Re:Whoops, sorry (3, Interesting)

afidel (530433) | more than 5 years ago | (#24029317)

Doesn't matter since $600 is way high for a T1, in most places I can get one with transport and local loop charges for more like ~$450/month.

Channel miles (1, Redundant)

suso (153703) | more than 5 years ago | (#24029443)

I was being generous. You also have to account for cell towers not being right next to COs and so you get charged for channel miles. A T1 that is 15 miles from the CO might be in the thousands of dollars. But its been a while since I've had to look this up.

Re:Channel miles (2, Interesting)

IndustrialComplex (975015) | more than 5 years ago | (#24029559)

Might be thousands of dollars, but likely it is not.

Back during my days I call 'The search for internet', I priced out the cost of some of my options.

A T1 would have run me about $600/month, and I couldn't even get cable until I paid to run the lines myself. I was even too far for DSL (my CO didn't support DSL, but I would have been too far even if it did)

I cannot imagine that on average, T1 lines cost so much that text messaging needs to cost as much as it does. Heck, in the rural areas, could there even be that much text traffic?

Sigh (5, Funny)

suso (153703) | more than 5 years ago | (#24029339)

517,602,528. There must be something infectious about Verizon and getting your decimal points in the wrong place.

Re:Some data 4 U (3, Insightful)

Anonymous Coward | more than 5 years ago | (#24029363)

Okay, now remember that you need a cell tower in every area you want coverage. Now remember that you need to wire up all of those cell towers. Comparing the cost of a single T1 to that is insane.

Re:Some data 4 U (4, Informative)

Registered Coward v2 (447531) | more than 5 years ago | (#24029689)


Okay, now remember that you need a cell tower in every area you want coverage. Now remember that you need to wire up all of those cell towers. Comparing the cost of a single T1 to that is insane.

Not really - most of the towers are not owned by the cell company but by one of a couple of twoer companies who lease antenna space; so you'd need to add in lease costs.

I'd argue they are fixed costs rather than variable so they should not be considered when calculating the cost of sending the n+1 txt msg; and while the bandwidth cost is probably more of a fixed cost as well I'd say that since it limits carrying capacity more than the antenna (as far as I know)it's not a bad estimation of the marginal cost associated with a txt msg or other data transfer.

Re:Some data 4 U (5, Insightful)

rugatero (1292060) | more than 5 years ago | (#24029391)

There should be a class action suit over this.

Why? No-one is forced to spend their money on text messages. Truth is the networks charge what they do because people are willing to pay it. People simply don't care about the bytes to dollar/euro/pound; ratio. For example, the last four messages I received from my brother contained a total of about 25 characters, 8 of which were exclamation marks.

If usage drops, then prices will follow, but that doesn't look like happening soon.

Re:Some data 4 U (4, Insightful)

Rob the Bold (788862) | more than 5 years ago | (#24029669)

No-one is forced to spend their money on text messages.

Not 100% true. If you have Cingular/ATT disable text messaging on your phone, they don't promise that you won't receive any text messages. And I'm not talking about ATT's own free text-spam, but rather texts from people you don't know that you still get charged for. I wouldn't be surprised if other carriers do that too.

Worse than that (2, Interesting)

chriseyre2000 (603088) | more than 5 years ago | (#24029417)

Given that these messages use the infrastructure messages that are used to keep track of which cell the phone is in it effectively costs them nothing (other than the cost of billing the message).

Re:Some data 4 U (3, Insightful)

tanner_andrews (234838) | more than 5 years ago | (#24029431)

There should be a class action suit over this.

I am having a hard time seeing who the class is or what their injury might be. You need a few more facts for price-fixing, and otherwise there is no cognizible injury in charging what the market will bear.

Re:Some data 4 U (1)

booyabazooka (833351) | more than 5 years ago | (#24029503)

Why do people put up with this? ... There should be a class action suit over this.

Somewhat fitting that the article author's name is Rearden (well, Reardon, but close enough). Verizon didn't set the cost of text messages; the market (all of us) did. It's not something you get to complain about. It's something you either buy, or don't.

Re:Some data 4 U (1)

kalirion (728907) | more than 5 years ago | (#24029557)

Another option is to sign up for one of the zillions of plans that offer unlimited texting. Probably something like that for downloading as well, haven't checked.

Re:Some data 4 U (0)

Anonymous Coward | more than 5 years ago | (#24029763)

I have one of those. It's great.

Re:Some data 4 U (4, Insightful)

Dirtside (91468) | more than 5 years ago | (#24029545)

If you don't think text messages are worth 15 or 20 cents each, then don't use them. (Yes, you can get your cell carrier to disable texting to your phone, you just have to yell at them for a while until they give you to a supervisor who can actually do it.)

I don't mind that the market will bear such high prices; what I mind is that there seems to be no competition on the part of the cell companies. Why would the price of SMS go UP when the cost of everything else related to cellphones has gone down? Compared to a few years ago, you can get more minutes, more features, better phones, etc. for the same or better prices... except SMS. Hell, I have unlimited web browsing on my cellphone, and it's $6 a month; unlimited SMS is $15 a month.

Re:Some data 4 U (3, Insightful)

Registered Coward v2 (447531) | more than 5 years ago | (#24029633)

I was recently reading about the whole George Vaccaro [blogspot.com] fiasco and did some calculations on how much the cost of transfer is over a T1 line vs. what companies like Verizon charge for data transfer. Its astonishing that people put up with this:

  • Cost of a T1 line: $600 (Verizon's cost would be less and they probably have higher capacity lines in many places.)
  • Monthly bandwidth capacity of a T1: 40,687,488,000 Kilobytes (86,400 sec. * 30.41 avg days * 197 KB/sec)
  • Cost per KB over a T1 line: 60,000 cents / 40,687,488,000 KB = 0.0001159190 cents per KB = $0.000001159190 (for all those Verizon reps out there)
  • Verizon's charge per KB to the customer: $0.02
  • Verizon's markup on data transfer: x 17,253!!!!!
  • Screwing generation Y & Z: Priceless

Why do people put up with this? Some people might say I'm comparing apples to oranges, but Apples dont' cost 17,000 times more than oranges. There should be a class action suit over this.

Why? The cost to produce a product has no bearing on price; it only determines wether or not a product will be produced based on teh demand - driven price.

The carriers should set prices to maximize their profits; which they try to do through offering teired and fixed rate plans. Given the marginal cost of extra traffic is virtually nil, the higher rates plans and flat rate bundles are probably mostly profit; by offering low usage plans you get the people who wouldn't own a cell phone if the paid $99/month while the all - in $99 captures people who are willing to pay alittle more than the highest capped plan per month to eliminate the chane they will go over their plan usage and get hit with a large bill every now and then.

Profit maximization, as long as their isn't collusion, is not illegal.

Re:Some data 4 U (1)

mapkinase (958129) | more than 5 years ago | (#24029659)

Note to myself:

When I will become a communist dictator of US, the first thing to do: nationalize the wire.

Re:Some data 4 U (1)

MichaelDelving (546586) | more than 5 years ago | (#24029661)

There has to be collusion begind it. All one carrier would have to do is make texting free (or in the neighborhood of reasonable), and they'd start picking up their competitor's texting customers as contracts expired. I think a lawsuit is definitely in order here.

Re:Some data 4 U (1)

terraformer (617565) | more than 5 years ago | (#24029671)

There are other services provided such as email, etc that one must account for. Now you can't say, but there are free services, although that is true, but those come at a cost of ads, etc; Also, $600 and $50 are far cries from each other. VZ, and the gang are selling the service of partitioning off these services. Are they gouging? Without a doubt. But is a 1-to-1 ratio of bytes to dollars fair, no? In a sane market, you would probably see a ratio 10-to-1 or even higher for this service. Buying in bulk will always be better. And the only way to make these markets sane is to have truly open access to pipes to competitors. What the cable cos do and VZ does with DSL (not fiber remember is a travesty). And to suggest the market will work this out without line sharing, is to suggest this is what our neighborhoods should look like... http://media.npr.org/programs/day/features/2006/aug/xeni_himalayas/3/main4_lg.jpg [npr.org] and http://i40.photobucket.com/albums/e210/kapson/1106/07/1.jpg [photobucket.com]

Re:Some data 4 U (1)

stewbacca (1033764) | more than 5 years ago | (#24029739)

A major flaw in your logic is that you don't include any overhead costs related to employing people to run these networks. Then there's always the fact that superfluous, trendy communication devices will always be grossly over-priced because people continue to pay for it, regardless.

Is this really an issue? (5, Insightful)

hansamurai (907719) | more than 5 years ago | (#24029283)

Most people who are serious about texting have unlimited plans, at least in the U.S. I'm not sure how much they cost but say $5/month on top of your regular contract, even 100 text messages is 5 cents a piece.

Re:Is this really an issue? (4, Insightful)

192939495969798999 (58312) | more than 5 years ago | (#24029305)

If text messaging were really this expensive, then the unlimited plans would be like $500 per month instead of $5-15 per month.

Re:Is this really an issue? (1)

DWIM (547700) | more than 5 years ago | (#24029715)

If text messaging were really this expensive, then the unlimited plans would be like $500 per month instead of $5-15 per month.

True*, if the carriers were really justifying their charges for text messaging based on the "cost" to provide that service. But they are setting their prices based on factors other than cost. A.) they are charging what the market will bear, and B.) they are trying to set incentives for their customers to buy their unlimited plans.

*of course, if the plan is really unlimited, the cost would be unlimited using that logic.

Re:Is this really an issue? (3, Informative)

Nukenbar (215420) | more than 5 years ago | (#24029357)

actually, with the new plan from AT&T with the 3G IPhone, the price for unlimited texting is $20/month. See here [att.com].

Re:Is this really an issue? (3, Insightful)

kiehlster (844523) | more than 5 years ago | (#24029389)

It is going to become more of a problem when SMS spam starts to rise. I for one pay per message because of the low number I get, but when you start receiving excessive amounts of spam that starts to add up. I'm not going to pay $5/month for spam, and I certainly never send/receive more than 4-8 messages per month, so the cost isn't warranted. I'm just waiting for people to band together and class-action the big four for hiking prices without properly informing customers. The "I would have blocked data if I knew you were going to hike the price this month" argument is quite valid. It's all a scheme to get customers to pay for more expensive services.

Re:Is this really an issue? (1)

CastrTroy (595695) | more than 5 years ago | (#24029523)

Can they charge you to receive messages? That doesn't seem right, considering that you have no choice in the matter. If I don't want to pay for a phone call, I can just not pick up. Or, if I'm in the middle of a phone call, and I decide that it is going on too long, and it is going to cost me too much, I can just hang up. All the services I've seen only charge for outgoing. Is it common for them to charge for receiving a message? That would be a good way to get back at someone you didn't like. Send them 10000 text messages via MSN, and get their wireless bill to skyrocket.

Re:Is this really an issue? (1)

BeardsmoreA (951706) | more than 5 years ago | (#24029563)

Remember the rest of the world is still astounded at the fact you people pay to receive calls!

Re:Is this really an issue? (1)

maxume (22995) | more than 5 years ago | (#24029713)

And we are astounded that callers pay different rates for local calls.

The overall costs are about the same (U.S. low price plans are somewhat more expensive than worldwide), the payment structure is just a little different.

Re:Is this really an issue? (1)

Brandee07 (964634) | more than 5 years ago | (#24029677)

It is common to charge for both outgoing and incoming messages.

T-Mobile used to have a small number of free incoming messages per month to cover the messages they used themselves to send ads or 'you have a voice mail' texts. Don't know if they still do- I have AT&T now and the rates are extremely high. I don't text much, but my brother, on my plan, does, so we ended up getting him the Unlimited texting plan.

The obscene part is that over 75% of his texts, ingoing and outgoing, are from (not to) this one classmate of his. AT&T refuses to block text messages from a certain number, so he's stuck receiving hundreds of texts a month from someone he doesn't want to talk to and paying for them, or disabling text messaging on his phone entirely- which I'm pretty sure AT&T make me pay to do. The Parental Controls feature costs $5/mo/phone.

Re:Is this really an issue? (1)

ari_j (90255) | more than 5 years ago | (#24029709)

I have a friend whose provider (Verizon) charged per incoming message. The alternative is to have the provider disable SMS on your service altogether rather than having the pay-per-message option. Or switch to another provider, if there is one available in your area that Verizon isn't buying. In my area, there is not, and my 8 years of avoiding Verizon are coming to a close.

Re:Is this really an issue? (1)

WingedHorse (1308431) | more than 5 years ago | (#24029487)

I can't answer for company customers some of which might use a lot of messaging but for me, I am just a common consumer and can answer why I put up with this.

It doesn't even pinch.

I live in Finland (the promised land of cellphones) and I have a GSM contract that costs 0.66 euros (about 1.2 dollars) per month and 0.069 euros (0.11 dollars) per each text message or a minute of calling. Receiving calls and messages is free in Finland.

I had to check those prices. I had no idea what they were. Never cared.

My phone bill is normally around 10 euros (about 15 dollars) a month and I don't care if it is 15 or 10. Hell, even if I was able to more than halve it to 7 dollars a month, I don't think I would care enough to switch operators.

Am I saying it doesn't cost more to companies and heavy users? Ofcourse it does and they should care but they are propably aware of the subject allready.

And if not comparing to just bandiwth (for which I pay about 50 dollars a month) but to how much benefit I get for my 15 dollars to mobile phone and 50 dollars to bandwith, I don't really feel ripped off in either.

Re:Is this really an issue? (1)

Austerity Empowers (669817) | more than 5 years ago | (#24029549)

$5/mo is outrageous, considering you'll eat more in ONE voice call than your little fingers could type all month.

This is why we need cell phone carriers to be just that, carriers aka bandwidth providers.

Re:Is this really an issue? (0)

Anonymous Coward | more than 5 years ago | (#24029723)

Only in that the carriers won't allow you to turn off text messaging. Unsolicited text messages can really add up

There is always,,, (1)

otacon (445694) | more than 5 years ago | (#24029303)

another option would be to pay the 10-15 dollar flat fee for unlimited texting that most providers have. I know that is what we use here at work because of the high volume of SMS messages generated by monitoring software.

Texting vs. Hubble (4, Interesting)

damburger (981828) | more than 5 years ago | (#24029309)

A professor at my university was recently asked by a British TV program to calculate the cost of retrieving data from the HST, and it came out quite a lot cheaper than sending text messages.

Re:Texting vs. Hubble (4, Informative)

Spy der Mann (805235) | more than 5 years ago | (#24029603)

A professor at my university was recently asked by a British TV program to calculate the cost of retrieving data from the HST, and it came out quite a lot cheaper than sending text messages.

From the physorg article [physorg.com]:

Dr Bannister estimated the cost of the data from Hubble could vary between £8.85 and £85 per MB- much cheaper than the £374.49 per MB cost of transmitting one MB of text.

Re:Texting vs. Hubble (1)

MichaelDelving (546586) | more than 5 years ago | (#24029757)

The texting cost calculations might be missing an important point. You probably don't have to 'provision' any (or much) bandwidth specifically for texting. Most of the time, when the 'pipe' is not already full, you have 'excess' bandwidth available for texting. You probably design your system to handle peak demand (uh, actual calls, and data/internet), which ideally is never quite met or exceeded in practice. That's assuming that the proportion of bandwidth eaten up by instant messaging is tiny, though.

Green Text! (4, Insightful)

Mongoose Disciple (722373) | more than 5 years ago | (#24029313)

Maybe these prices will help drive the American consumer away from their opulent sport utility text messages to something a little more environmentally sustainable.

You'd think one of the wireless carriers would be able to differentiate themselves in the market and make a killing off selling 10 cent text messages. (That is, people would change to their service when possible because they're half the price of anyone else, and 10 cents for a text message is still a huge profit.) Do I just not understand the market dynamics, or could this be a case of price fixing?

Re:Green Text! (3, Insightful)

faloi (738831) | more than 5 years ago | (#24029451)

I tend to think it's more about price fixing. They're charging what the market will pay. If they keep bumping the cost of text messages on a per message basis, more people will pay the monthly fee for unlimited.

I still find it fascinating that I have an unlimited data plan with minutes that roll-over, and since talking mobile to mobile on people that have the same carrier (which happens to be the majority of the people talk to regularly), I've got minutes to burn. I can call them, or log in to a web-email app and email them, for my monthly fee. But sending a text message is so taxing on the providers system, apparently, that they need to charge extra for it.

Re:Green Text! (1)

NeoSkandranon (515696) | more than 5 years ago | (#24029457)

Well, in that case said provider would probably be denied use of other carriers' towers in retaliation for "rocking the boat" so to speak. :)

Re:Green Text! (1)

adamstew (909658) | more than 5 years ago | (#24029465)

The carriers can do this simply because the majority of people don't shop for their cell phone plans based on the text messaging costs. All the major carrier's text messaging packages are pretty much the same across the board...might be different with sprint now, but they are very much a wild card right now. People really only compare minutes and the base monthly charge.

The people who care about text messaging already have the texting packages...The people who get hit with the $0.20 per message fee are the people who don't care about text messaging...they don't care what the per message fee is, because "i'll never use it". But then someone who uses a LOT of text messages start sending them racking up the victi...I mean customer's bill.

I've never text'd (-1, Offtopic)

HeyBob! (111243) | more than 5 years ago | (#24029323)

I'm 45, used pc's since 1977 and have never text'd, and never will.

Re:I've never text'd (2)

clay_buster (521703) | more than 5 years ago | (#24029427)

You don't have kids (teenagers). Texting is a lot less stressful than talking with them and makes you look hip. Ok, not "hip" because that would make you sound old.

Re:I've never text'd (1)

qoncept (599709) | more than 5 years ago | (#24029435)

Con'tulations, on not texting and on inventing your own contraction. I wish 6 billion people worldwide could say the same thing. What a horrible technology.

Re:I've never text'd (1)

Noroimusha (1267584) | more than 5 years ago | (#24029445)

I'm 45, used pc's since 1977 and have never text'd, and never will.

this is about mobile phones. i used to send 20-30 texts a day but rather make a 5 min call now cuse it is cheaper and less effort ( typing is an EFFORT i will finish it now :D )

Re:I've never text'd (3, Insightful)

corbettw (214229) | more than 5 years ago | (#24029475)

My father's 64, I'm 37, and he and I text each other several times per day. Just because you're an adult, doesn't mean you have to be a Luddite.

Re:I've never text'd (1)

IndustrialComplex (975015) | more than 5 years ago | (#24029653)

To hell with being a luddite, texting just seems to be a backward step to me.

We invented the telegraph, then the phone, and now its like going back to the telegraph.

Re:I've never text'd (0)

Anonymous Coward | more than 5 years ago | (#24029521)

I'm 24 and I made Verizon disable text messaging on my phone. Conversations that take 10 minutes of texting can be had in 30 seconds with more detail. Too many important aspects of communication are impossible to translate into words. Just not worth my time.

Re:I've never text'd (0)

Anonymous Coward | more than 5 years ago | (#24029695)

I'm 24 and I made Verizon disable text messaging on my phone. Conversations that take 10 minutes of texting can be had in 30 seconds with more detail. Too many important aspects of communication are impossible to translate into words. Just not worth my time.

In the spirit of the article title: UR DOING IT WRONG!!!

Conversations over text? Maybe back and forth once...but not whole conversations, not in general.

This same type of response was given in another recent thread that discussed text messaging. Stop trying to devalue something just because you cannot come up with an effective way to use it.

Text messages are most effective for short bursts of information. That should be obvious. And if you insist on finding a conversational use for them (there are some), they let you have those when you are somewhere that talking on the phone would be frowned upon.

There see, I just gave you two ways to use it that don't fit into your complaint. You're welcome. You're 24 and you already qualify for 'get off my damn lawn!'...how closed minded will you be in another 24 years?

Calculate based on Asian figures (4, Insightful)

fork_daemon (1122915) | more than 5 years ago | (#24029335)

In India the cost of texting is as little as 80paisa. i.e 0.80 INR. Now calculate the difference and make your new calculations on it.. Why do you guys spend so much then. Sue the companies that charge you so much for something which costs next to nothing.

Re:Calculate based on Asian figures (2, Informative)

CastrTroy (595695) | more than 5 years ago | (#24029691)

Based on the current exchange rate on xe.com, .8 INR is equal to .018 USD. That's 1.8 cents per text message.

Get unlimited texting (3, Funny)

xpuppykickerx (1290760) | more than 5 years ago | (#24029341)

and solve this issue. Caution: Unlimited texting may decrease your social skills and will cause everyone around you to want to smash your phone!

free (5, Interesting)

jupiterssj4 (801031) | more than 5 years ago | (#24029347)

I just emailed Sprint asking for free text messaging and got it. I have done this for about 10 extra things on my account for free. I have 500 free text messages a month and never used half

Re:free (1)

DWIM (547700) | more than 5 years ago | (#24029769)

Yeah, they're going to be happy to do that. They want you to try it out, like it a lot, and "need" it. Soon enough you'll be sending well over 500 messages per month (they hope).

Something should be done (3, Informative)

neokushan (932374) | more than 5 years ago | (#24029355)

In the UK, the Telecom Regulator OFCOM recently (as in a few days ago) started pushing our mobile operators to reduce the cost of sending and receiving text messages while abroad, where the price was often around 30p (60c!) or more just to send one.
I hope this sets a precedent and they start to clamp down on the cost of sending regular, local messages as well.

Same as gas... (4, Insightful)

Frosty Piss (770223) | more than 5 years ago | (#24029359)

So why are carriers gouging their customers so? Because they can, concludes Reardon.

Pretty much the same as gas...

In case you didn't know, it does cost about $24k (4, Funny)

Anonymous Coward | more than 5 years ago | (#24029361)

to download an mp3 ... if the RIAA smells you.

Re:In case you didn't know, it does cost about $24 (1)

sm62704 (957197) | more than 5 years ago | (#24029493)

to download an mp3 ... if the RIAA smells you.

I've always wondered that about dogs, too - how can anything that stinks that bad smell anything at all?

I work with EDI VANs... (0)

Anonymous Coward | more than 5 years ago | (#24029367)

And often, to impress on my clients (who are the ones paying the VAN fees, etc.) how very expensive it is, all I have to do is say one thing:

The only thing more expensive in the world per byte than text messages are VAN fees

Though, according to these figures, I may have to reverse the saying now!

You know what the problem is? Capitalism. (4, Interesting)

apathy maybe (922212) | more than 5 years ago | (#24029375)

The so called free market isn't free.
If customers had any idea about the true cost of things to the companies that they purchase from, they wouldn't buy at the prices that things are being sold at.

Free markets require perfect knowledge. And without that, the invisible hand doesn't work.

Oh yeah, like in the US you have to pay to receive messages? Would you put up with having to pay to receive emails or take all phone calls? Fuck no.

Meh, this is a random ol' rant.

(Oh yeah, to the fuckers who say "communism", I'm an anarchist. Check my "homepage" for info about that. Oh yeah, and no I don't get anything for the referral link, and if it really bothers you, you can remove it.)

Re:You know what the problem is? Capitalism. (2, Funny)

daveatneowindotnet (1309197) | more than 5 years ago | (#24029485)

Youch somebody got yelled at when the cell phone bill arrived last month

Re:You know what the problem is? Capitalism. (1)

apathy maybe (922212) | more than 5 years ago | (#24029643)

Actually, I don't live with my parents (which is what I assume you are trying to imply), I live on a different continent even with my partner.

I pre-pay my mobile phone, and I only have trouble when travelling internationally. I also don't use my phone much.

Of course, I'm not a typical user.

Anyway, capitalism is still the problem.

Re:You know what the problem is? Capitalism. (3, Insightful)

maxume (22995) | more than 5 years ago | (#24029783)

Efficient markets require perfect knowledge. Free markets require a relative lack of regulation.

If people actually cared, prices would go down, the information is available. People don't care.

Carriers limit the number of characters ... (0)

Anonymous Coward | more than 5 years ago | (#24029387)

Er, no dear, this limit is imposed by the GSM standards, it's not something the carriers have any choice over.

So, this this fundamental error in the article, how to believe any of the rest of it?

Then go from GSM to 2.5G (1)

tepples (727027) | more than 5 years ago | (#24029573)

Er, no dear, this limit is imposed by the GSM standards, it's not something the carriers have any choice over.

Don't the 2.5G standards have a protocol for longer messages?

Well DUH (1)

sm62704 (957197) | more than 5 years ago | (#24029399)

So why are carriers gouging their customers so? Because they can.

"Why do you rob banks?" a famous depression-era bank robber was asked. "That's where the money is" he replied.

Does anybody really think that any company at all is going to charge any less fro any product than they can get away from? Personally I refuse to text at all; I pay a dime for the text as well as air time. If I'm in a situation I can't or don't want to answer the phone, I'll call the caller back. Text messaging may have its legitimate uses, but I think it's probably mostly used by kids.

We're getting unlimited access plans for cell phones lately, maybe it's because the kids are growing up and getting jobs and realising that money only grows on trees if you have an orchard?

Re:Well DUH (1)

saider (177166) | more than 5 years ago | (#24029771)

Text messaging may have its legitimate uses, but I think it's probably mostly used by kids.

Texting is good for short one-way messages like reminders or simply questions. There is a lot less time involved in sending a text versus a short phone call. You save on the waiting for the other person to pick up, and possibly waiting for the voice mail prompts. The receiver just opens their phone and gets the message. They don't have to dial voice mail and go through the menu, etc.

My wife is a nurse, and often cannot take a phone call whenever she wants. Sending a "Get milk on the way home" text saves a lot of time and hassle compared to a voice mail.

Just to compare (5, Informative)

Anonymous Coward | more than 5 years ago | (#24029403)

In Norway, NOK0.59 is a pretty average price to pay, which corresponds to about $0.012 using todays rates. Furthermore, many companies give you 100+ free messages per month. With my own usage pattern, I keep my cellphone for free (No monthly charge, 120 mins of calling and 90 sms for free per month). Stiff competition does wonders :) If companies in Norway can do this, I'm sure it would be possible in the states too, as long as the consumers keep up the pressure.

Obivously (4, Funny)

Dunbal (464142) | more than 5 years ago | (#24029425)

If the same pricing was applied on a per-byte basis to a single MP3 song download, it would set you back almost $24,000 according to one estimate.

      Looks like we're not downloading MP3's from the same place... Even if my price goes up 2000%, I will still pay exactly $0.00 for my MP3's.

This really is no surprise. (1)

jskline (301574) | more than 5 years ago | (#24029441)

Fact is that it completely falls into the category of "charge what the public will bear". I think that was why the call it a "Free Market Economy" because someone provides the service, and you pay for the service until the point where the value isn't there anymore and begin to drop away from the service. Then they reduce prices to bring you back, and magically everyone finds this "happy medium" thing... Enough with the basic economy stuff though.

Now you also know why I cringe every time I get a spam message on my phone, and the carriers won't refund the charge because their system is open to hacking and spamming. The who mess just sucks.

Basic economics (0)

Anonymous Coward | more than 5 years ago | (#24029447)

Goods and services in a free market are generally offered at a price somewhere between what they cost to produce and how much they're worth to the consumer. In which direction it leans more is a good indicator of the competitiveness of the market in question. I.e., if you have a limited number of suppliers and the price is near the costs, they're in heavily competition, which is usually good for the consumer. If the price is near what the typical consumer is willing to spend, the suppliers are engaging in (usually tacit) collusion, if not acting as an explicit cartel.

Escape from Oppressive Contracts (1)

l3prador (700532) | more than 5 years ago | (#24029463)

I've never done this myself, but I've heard that these sorts of increases are a good way to get out of a 2 year contract early, which is only fair, since they totally are trying to change the contract on us to charge us more than we originally agreed to.

Basic economics (4, Insightful)

Frequency Domain (601421) | more than 5 years ago | (#24029467)

Price is the intersection of supply and demand curves. The US carriers charge what they do because people are willing to pay those prices. If you don't like the pricing, don't text. If enough people vote the same way with their fingers, prices will drop.

Re:Basic economics (1)

Technopaladin (858154) | more than 5 years ago | (#24029773)

You are right because honesty shouldnt be a part of economics. I am a tad tired of the Supply vs Demand argument when its so one sided in a consumerist capitlistic culture. It seems to be either the Greedy or the Idiots of the world run everything what does that say about humanity? Its why I support well regulated Trade and appreciate the SEC(when its honest), Consumer advocates, COnsumer Product Safety commision, FDA, and FTC. o and consumer reports

Simple fix (4, Interesting)

glitch23 (557124) | more than 5 years ago | (#24029513)

I have SMS disabled on my phone at the carrier level. The only SMSs I can receive are administrative which are free. No one can send me a mesg and I can't send out. I did that after my previous carrier (which got bought by AT&T) started charging for incoming messages. I asked why they did that and they said because everyone else was charging for incoming too. And of course then it went from 10 cents to 20. I don't need SMS so the charges don't hurt me because I don't have any.

Re:Simple fix (1)

Brandee07 (964634) | more than 5 years ago | (#24029745)

AT&T refused to disable SMS messaging on one phone on my family plan unless I paid $5/mo for the Parental Controls feature pack.

I'd jump ship when my contract is up, but I honestly don't think the other carriers are any better.

Re:Simple fix (1)

damburger (981828) | more than 5 years ago | (#24029751)

Charging for incoming as well!? That is like someone arse-raping you and then charging you for their dick.

Web via txt? (4, Funny)

hack slash (1064002) | more than 5 years ago | (#24029525)

I wonder what the feasability is of getting two mobile phones, each with unlimited text accounts, hook one up to your home PC and the other to your laptop. Now for the tricky part; write custom software that would enable you to use the text messaging system as a communication system between the two computers.

So with such a setup you can do rudimentary webbrowsing (without images) / emailing etc., your laptop sends an url via the mobile to the mobile at your home, which the PC there picks up, retrieves the webpage & sends it back in txt message "packets" and your laptop retreives and combines back into a web page, with all the txt messages encrypted so the carriers can't directly snoop on your browsing/emails.

Monopoly? Oligopoly? (3, Insightful)

GreatBunzinni (642500) | more than 5 years ago | (#24029529)

To put it bluntly, your mobile communications' market isn't free. The companies serving that market don't feel the need to compete with each other in any way perhaps besides area coverage. Their clients' business is always a given as they are unable take it elsewhere (no alternatives) and are happily shelving away more and more money to get the exact same service.

So, if they have a captive audience and there is no other actor in the stage, what else forces them to put on whatever show they wish?

Mobile Monopolies (4, Insightful)

Doc Ruby (173196) | more than 5 years ago | (#24029539)

Telcos can charge you 4-10-30-50 cents for a text message that costs them hundredths, thousandths of a cent to carry because they monopolize the network. If your phone could login to any radio network to which it can eletromagnetically connect, depending on which services and prices it provides, then the networks would compete for those connections.

Instead, you're locked in. If you want to switch in realtime, you have to pay prohibitive "roaming" fees that are arbitrary and extremely high - higher than even the ripoffs from the primary network. Switching your primary network requires "porting" your phone number, days or weeks of bureacratic "processing", and sometimes can't port, and breaks your old primary network's contract at great expense.

These constraints are all made-up for telcos to retain their old monopoly status with their existing customers. The exact same truths that forced open the wired networks are still true for the wireless networks, but the telcos have lobbied to make that much more expandable market into an "exception".

Note that this problem is more true in the US than in Europe and elsewhere. Foreign countries don't have as much contractual monopoly, but do have some residual technical fragmentation that is more of a basis for lockin, even though there's somewhat less lockin. But since their formerly more separate states (AKA "countries") had separate telcos that compete with each other, there's still some effort to keep whatever lockin they can, though there's less of it.

The US Congress should fix the laws to apply "universal access" to the radio networks as well as to the wired networks (including the Internet). Make these lockin contracts illegal, so they become the exception (merely to purchase rates even lower than the open market produces after competition, to pass along to consumers the savings telcos get from lower "churn" rates). We're a loooong way away from that kind of Congressional alliance with consumers instead of telcos. But we can get there, just as we got there with landlines after many years of fighting.

We just have to start by making the problem of telco monopoly privilege the conventional wisdom. 300M Americans whining about paying too much with no choice usually eventually has an effect.

Worse (1)

drdanny_orig (585847) | more than 5 years ago | (#24029581)

It's actually worse, at least on AT&T -- they charge both sender and receiver. It cost me $10 to add the 200/mo feature for my wife and I on a "family" plan. There's a word for that sort of robbery. But then there's also a word for fools like me who pay them. :-/

Wireless Services in general = rape (2, Insightful)

y86 (111726) | more than 5 years ago | (#24029613)

My verizon contract is up this month, forget renewing. Forget it all, I'm going 50$ a month wifi card, EEEPC and Skype. They can keep their minutes.

Cell Phone Carriers and Spammers in Collusion! (0)

Anonymous Coward | more than 5 years ago | (#24029615)

This is a scam by the cellcos. They are in collusion with the text spammers. None of the big four US cellcos will allow the consumer to opt out of or turn off text messaging. One to five unsolicited text messages that the consumer is forced to pay for per month rakes in a very healthy windfall for the carriers. Since January, I have shelled out about two dollars for spam. It was pay or have my service canceled and then be screwed for the early termination fee.

mmmm I love deregulation in the morning (3, Interesting)

Beached (52204) | more than 5 years ago | (#24029625)

Now kids remember "Deregulation will result in more competition and lower prices for the consumer"

I love it when an industry that is inherently non-competitive due to the fact that the spectrum is limited and the only way to make money in telecommunications is through economies of scale. The only guys who make money in telecom are the big guys and they make it buy making us pay and controlling parts of the spectrum. This is why it is licensed, the "tubes" are only so big and you can't add more.

It is just like the media ownership rules. Buy loosening the rules, consumers don't benefit but the bottom line gets bigger for the big guys. Government used to understand that because these companies are caretakers of our EM spectrum, they are allowed to make money and have monopolies (or close to it) but they must follow certain rules like justifying price increases with fact.

OK, rant over. Proceed with texting while driving.

Re:mmmm I love deregulation in the morning (1)

damburger (981828) | more than 5 years ago | (#24029729)

But... but... teh market is better!!!111

Just preempting what a disturbing number of slashdotters will say based on the response to the metal shortage thread. What you are suggesting is blasphemy to the gods of neoliberalism.

Paying to receive (1, Informative)

Anonymous Coward | more than 5 years ago | (#24029631)

You poor saps in the US are apparently even willing to pay to receive text messages! So unless you often talk to yourself, double the price quoted per text sent to get a more realistic figure.
 
To people in Europe a system like the one in the US would be totally ridiculous. I don't have a plan for my phone at all, and I have a few hundred free texts per month, with no cost to send or receive them to anywhere in the world.
 
    The potential for abuse alone should be enough to damn the practise - if I know your number and you can receive texts, there's literally nothing stopping me from sending you 50 dollars worth of costs to you at no cost to myself. I could even schedule it to be done automatically for god's sake!
 

Hunger (1)

VincenzoRomano (881055) | more than 5 years ago | (#24029639)

This is the sympton.
Stupidity is the disease.
The American operators will kill the SMS market and the value added services business (and the related premium rates).
This is maybe the right time for the USA to give a closer look to the European business model.

2.4 cents per SMS (1)

pkphilip (6861) | more than 5 years ago | (#24029649)

Telecom carriers in the US are really ripping people off.

Here in India, it is Rs. 1 per SMS with most telecom carriers. That works out to about 2.4 cents per SMS.

But there are plans which are even cheaper.

Example from Airtel (www.airtel.in), you have the following add-ons that you can opt for with your telecom plan:

250 Local SMS at Rs 25/month
400 Local+National SMS at Rs 49/month
999 Local+National SMS at Rs 99/month

Also, incoming calls as well as SMS is free unless you are on a roaming plan (that is, you are out of town but you want to remain reachable over the same phone number on your mobile).

What the Market will Bear (2, Insightful)

natoochtoniket (763630) | more than 5 years ago | (#24029725)

The pricing of datacom and telecom services has not had anything to do with the cost of the service since the original AT&T monopoly was broken. Pricing is determined by the market, not by the cost of providing the service. This is because most of the cost is fixed, while the revenue is highly usage-dependent.

From the carrier perspective, the only thing that matters is revenue. The new product (whatever it is this year) will always be marketed at premium price. The old products are priced to maximize revenue. If they can gain revenue by lowering the price and selling more units at that lower price, they do. If they can gain revenue by increasing price and selling fewer units, they do that.

Voice minutes have become cheaper over time largely because of competition. SMS messages are currently fashionable, and so carry a premium price. As soon as text messaging starts losing fashion appeal, some carrier will start selling it for lower pricing, or even giving it away, to get subscription revenue. Abusing the customers with ludicrous per-message pricing will make that day come sooner rather than later.

Makes NZ seem cheap (0)

Anonymous Coward | more than 5 years ago | (#24029733)

In NZ, we have only Telecom and Vodafone for choice. They each have a 2000 txt addon/plan, and I think they both have a 500 txt plan.
The 2000 txt plan is for $10/month on their pre-pay plans -- 0.005 cent per txt, to any cellphone on your own service provider (telecom to telecom, vodafone to vodafone).
Their 500 txt plan -- also $10 [0.02c per txt] is to any network -- vf to tc, vf to vf, tc to vf, tc to tc, etc.
I believe that the 500 txt plan on vodafone is only available to post-paid plans, but the txt2000 addon for SuperPrePay is, clearly for pre-pay.

Also, but almost sounding like free advertising for vodafone, they have $6/month for unlimited txt/voice (and maybe photo messaging) to any ONE person "Best Mates" addon for SuperPrePay.

So... No Free Market in operation here then... (1)

zotz (3951) | more than 5 years ago | (#24029741)

"Because they can, concludes Reardon."

And why can they? Because there is no Free market in operation here huh? But if someone suggests that their pricing should be regulated, they will spout about letting the market sort things out...

all the best,

drew

It's expensive because... (1)

squoozer (730327) | more than 5 years ago | (#24029787)

...it's what the kids and other people that don't understand money do. It's easy for the phone companies to gouge this section of society while also catering for the general population by giving them a few text's included in their monthly package.

I'll bet if you look at the economics of it they would break down like this:

  • 20% will pay stupid money for sending tiny, nearly pointless text messages./li>
  • 60% will not pay but think that text messages are a useful add on to the basic phones features so texting is a minor selling feature that can be added with little cost.
  • 20% will never text because it's too complex or they are against it on religious grounds because it harms children (or some other nonsense).
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