Text message pricing: Is Sen. Kohl fighting the wrong battle?

Text message pricing: Is Sen. Kohl fighting the wrong battle?

Summary: How much do you pay for a text message? In case you didn't know, the cost of a text message has doubled in the past few years - from 10 cents to 20 cents - and suddenly Sen.

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How much do you pay for a text message? In case you didn't know, the cost of a text message has doubled in the past few years - from 10 cents to 20 cents - and suddenly Sen. Herb Kohl wants to know why. (Techmeme)

I specifically ask each of your companies to explain why text messaging rates have dramatically increased in recent years. Please explain the cost, technical, or any other factors that justify a 100% increase in the cost of text messaging from 2005 to 2008. Please also provide data on the utilization of text messaging during this time period. Please provide a comparison of prices charged for text messaging as compared to other services offered by your companies, such as prices per minute for voice calling, prices for sending e-mails, and prices charged for data services such as Internet access over wireless devices, from 2005 to the present. Finally, please state whether your text messaging pricing structure differs in any significant respect from the pricing of your three main competitors. Please provide this information no later than Monday, October 6, 2008.

These are legitimate questions and the wireless carriers should answer them. And I applaud the Senator for asking them. But I have to wonder - as the U.S. becomes more like a third-world country, instead of a world leader when it comes to things like broadband speeds and advancements in mobile technology - is the fight over text messaging prices really the right fight?

Maybe it is. I go out on a limb here and run the risk of being ridiculed because my perception might be warped. I pay a flat $30 extra every month for a plan that provides unlimited text messaging - as well as picture and video messaging - for all five phones on my family plan. With all of the SMS alerts I get throughout the day (I love the news headlines that come via Twitter), as well as all of the texting that my pre-teen kids do, I am sure that I come out ahead at the end of the month. But if not, oh well. It's $30 and I don't have to worry about watching the itemized charges.

Also see:  Richard Koman: Sen. to carriers: Why do text messages cost $1,300 per meg? 

When it comes to mobile technology, I'm more interested in the advancement of mobile technology - speeds, applications and services that make the mobile experience as welcoming as the desktop/laptop experience, devices that aren't tied to a single carrier (iPhone/AT&T, for example) and privacy on the mobile Web.  I'm not trying to downplay the investigation of the dollars and cents of SMS text messaging. I just can't help but yawn and wonder if there are bigger battles out there.

Your thoughts?

Topics: Mobility, Collaboration, Hardware

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18 comments
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  • I agree

    While I like most believe the cost of text messaging is too high, surely there are other areas in which the service providers can be scrutinized. Unless collusion can be shown, I don't see anything the companies could be doing wrong. As the accuser, the government has the burden of proof.

    Is cell phone service going to be declared an essential service and in effect "nationalized" if the government decides the price is too high? Will the government dictate permissible cell phone service rates?

    Carl Rapson
    rapson
    • Text Messaging prices

      Having just been hit by Hurricane Ike, my cell service is non-existent. Instead, AT&T is "encouraging text messaging".

      So, I'll end up paying for non-existent phone service and for tesxting too.

      I hope the good Senator stomps all over the gree3dy b------s
      ebhb2004@...
  • Senarors should know about the Torrent

    It's all in the Torrent and it's all free.
    BALTHOR
  • The are NOT legitimate questions

    in a free market society. They are however completely legitimate
    in a command economy or fascist society where the state either
    controls or owns the private sector.

    Of course, the ignorant and misinformed will cheer this
    "unfairness" of text messaging because they've been taught that
    evil rich companies are more dangerous than interfering,
    meddling statists. Or, they just don't care as long as the statists
    interfere with THEM and not me.
    frgough
    • No, but they are legitimate questions in our society

      When you find a real free market society let me know. Until then you might want to look up the words collusion and anti-trust. Of course in your little slice of unreality these things never happen and all companies (especially the big rich ones) are perfect, created out of goodness and light, and therefor incapable of doing evil things. Yea right!
      Hemlock Stones
    • This is called monopolistic behavior

      frgough, I read your posts from some of the other articles and while I applaud your quest to defend a free market, I can't help but think you haven't been taught about monopolistic behavior.

      Price fixing (this is illegal BTW) is when companies get together with their competitors and decide to raise prices. Instead of having price determined by the intersection of supply and demand, it is determined by a few, those in control of that product. Compare this to the 'command economy' that you mentioned earlier, a few people (you were thinking of gov't, but they could be large companies as well) determine the price instead of the market.

      The senator mentioned that she noted they all increased prices around the same time (sounds like price fixing) and is giving them a chance to explain themselves, it could be they are all reacting to the same cost increase. If you like the free market, you should like that the senator is fighting to keep the market free.
      ricochet2200
    • RE: They are not legitimate questions

      [i]Really[/i]

      [b]I think they [u]are!!!![/u][/b]

      As a representative of his constituents who no doubt have raised concerns about the pricing in the wireless industry; he has every [b]right[/b] to ask these and other questions.

      Now, the wireless carriers [b]do not[/b] have to answer them; and should they make that choice, then the public can vote with their wallets.

      That is how a [b]FREE MARKET[/b] economy works. You need a refresher course in EC 101.

      There are other potentially sinister reasons at work; specifically one called "maximization of revenue", and possibly "guaranteed revenue stream". For most people, they are better known as [b]what the market will bear[/b] and [b]use it or lose it.[/b]

      Since you failed EC 101, allow me to explain.

      First, "maximization of revenue" implies that you price your product or service such that the "bundled price" is a "better deal" than one or two services. One can look at many "triple play" deals offered by cable companies. Just look at what the "triple play" (cable, phone internet) costs versus the sum of the three individually. Then figure the total for two of those three. (like cable and internet, or phone and internet). The phone companies are no different, they pile on all of the extra services so you can not get simple wireless phone service.

      This then leads us to "guaranteed revenue stream". The wireless carriers are prime examples of that. Sign up for a two year contract, and try to get out of it. Would it be fair to say that your [b]are "hung" by the b---s?????[/b] Nice "early termination fees anyone????

      These are all anti consumer practices; and as one of our representatives, I feel it is his responsibility to keep the wireless carriers [b]in line,[/b] and if that means asking some embarrassing questions, then too bad!!!!!
      fatman65535
    • I wonder...

      how a brain dead moron such as yourself would respond to this, http://www.ftc.gov/opa/2000/05/cdpres.shtm

      So just keep on goose stepping. Have you got your application for the Hitler Youth back yet?
      jackbond
  • RE: Text message pricing: Is Sen. Kohl fighting the wrong battle?

    I agree with the article mentioning the serious disparity between US technologies versus the rest of the world (specifically that we are shockingly nearly 3rd world in that sense.) But while that in itself needs to be brought to the forefront, so too should the fact that US cell companies have far more monopolistic tendencies than international companies.

    Specifically: internationally, one can buy any unlocked phone, pop in any company's sim card, only get charged for outgoing calls and outgoing texts, and one can reload any time the card runs out of minutes. (a.k.a. 'no contract' here in the US). In the U.S., the no-contract phones available are little more than basic play phones for a 5 year old. Advanced phones MUST be purchased with a contract or at scathing prices on ebay. And contract prices, for the average consumer are hardly 'affordable' at an average $50 per month.
    Multiply that times 12 and add in, oh, some taxes, fees, and overcharges... and you've got yourself a down-payment on a car.

    Go Senator Kohl. This battle IS worth fighting for.
    hafsabeen
    • US in the middle

      But at least you can still come over from Europe, go to a T-mobile shop, buy a SIM card, activate it, and use it in your mobile phone which, in most EU countries, is unlocked EVEN if you have a contract.

      It used to be possible in Canada, too. But then it got Rogered. Great way to kill tourist industry, btw.. Roaming charges for EU folks are MUCH higher than in the US (that's because Rogers charges it's EU partners so much). So what we do? We go to the US of A and avoid the great white north.

      In Germany, I popped into a mobile phone shop. Hi, I'm here for 5 days and I need a SIM card. OK, will you call more to phones in Germany or abroad? Abroad. Europe or overseas? Europe. OK, here's the best option for you. I don't remember the price per minute, but it was incredibly cheap. Heavy use and I still had about 3 Euros left after 5 days.
      kitko
      • Middle? or one and The Same...

        exactly. Why is it incredibly cheap in Germany, Europe in general, or even Africa!? A friend of mine works for a telecommunications co in South Africa and showed me that they're on a 4G? network?! uh, we're pretty excited to get 3G these days. And then add kitko's point about having incredibly cheap minutes via a quick stop at a mobile phone shop. (Having spent a grand total of 10 dollars for over 3 weeks of use abroad, i completely agree.)

        It ends up making me wince when i pay my mobile phone bill!

        Based on what i've heard from Canadian friends and the above, i'd say that both the U.S. and Canada are lumped into the one category: stiffing the consumer for services that are clearly inexpensive.
        hafsabeen
  • About time. SMS is way too expensive.

    As in something like 4X the cost of data from the Hubble. [url=http://www.physorg.com/news129793047.html]link[/url]

    On a happier note, T-Mobile just recently added the capability to turn off SMS receipt for their customers. That suits me just fine since the majority of SMS texts I ever got were spam and I didn't have a plan that let me get/send any SMS's without having to pay.
    Letophoro
  • RE: Text message pricing: Is Sen. Kohl fighting the wrong battle?

    You are in the tech field. You are not the general public. Text messaging matters to tweens and the parents who pay for it. Mobile web speeds are just not that important.
    aep528
  • RE: Text message pricing: Is Sen. Kohl fighting the wrong battle?

    Yes, there may be bigger issues to confront on this issue, but that is no reason to not address this one. The problem with government is that they always want to focus on "big" problems that they can never agree on or resolve. I say let's see if they can handle a small one like this. The questions are fairly simple and straight forward, even thought the lawyers will not answer them that way.
    SomewhatSmart
  • RE: Text message pricing: Is Sen. Kohl fighting the wrong battle?

    did you know, Sam, that if you're using Verizon and have unlimited text/pix, they don't charge you
    minutes for pix sending, but every picture sent costs you 1 minute of your voice time? they use 777-000-0011 or something as the 'number' calling. loverly!
    elmerpaul
  • RE: Text message pricing: Is Sen. Kohl fighting the wrong battle?

    "I pay a flat $30 extra every month for a plan that provides unlimited text messaging - as well as picture and video messaging - for all five phones on my family plan. With all of the SMS alerts I get throughout the day (I love the news headlines that come via Twitter)"

    Who in their right mind would pay to receive an SMS? :-O

    Paying to receive calls and SMS was mentioned as a possible "resource" mobile operators in Europe could use when their termination fees get stomped on.

    Vodafone did a quick survey and worked out most of its customer base would walk if they had to pay to receive calls or SMS. :-D
    pico_D
  • RE: Text message pricing: Is Sen. Kohl fighting the wrong battle?

    Just look at the cost of text messages in civilized countries! They put us to shame and in most instances, the phone company is a monopoly.
    ebhb2004@...
  • RE: Text message pricing: Is Sen. Kohl fighting the wrong battle?

    They should be charging $1 per message for text messages. Maybe it'll finally put an end to the childish nonsense. It's a phone, kiddies, you talk on it.
    John_Doe69