Sen. to carriers: Why do text messages cost $1,300 per meg?
Summary: Did you see CrunchGear on AT&T's text charges? (I found it via Ars) It seems at 20 cents per message, AT&T is charging $1,310.
Did you see CrunchGear on AT&T's text charges? (I found it via Ars) It seems at 20 cents per message, AT&T is charging $1,310.72 per megabyte at those rates.
The rising rates for texting prompted Sen. Herb Kohl (D-Wisc.) to write a letter to the cell companies requesting information on the reasons why and wherefore.
Since 2005, the cost for a consumer to send or receive a text message over each of your services has increased by 100%. Text messages were commonly priced at 10 cents per message sent or received in 2005. As of the end of the month, the rate per text message will have increased to 20 cents on all four wireless carriers. Sprint was the first carrier to increase the text message rate to 20 cents last Fall, and now all of its three main competitors have matched this price increase.And what was he expecting from our telecom policy?... 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. ...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.
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.
Ars reports this is "more of an opening of the discussion about these issues," according to an anonymous staffer. "We have an open line, and we aren't condemning them without hearing what they have to say."
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Talkback
How about this Senator
Or, on a politer note, point him to a copy of anything written
by Thomas Sowell.
Or, I guess you could give the short answer: Because we can.
To which the Marxist will reply: That's not fair.
To which the Marxist loving tyrant will say: Cool, that means
the ignorant masses will grant us power to control one more
aspect of their lives, and then two years later wonder why there
are shortages everywhere and blame the nearest Republican.
Not sure what planet you are on?
You don't happen to be a SEO or senior manager of one of the said companies do you?
Yes, I am against him finding out
And, no I don't work in the cell phone industry at all. I'm just
becoming more and more alarmed at how the state feels it is
entitled to interfere in the affairs of business because it
ALWAYS leads to shortages, hardship and suffering.
Fannie Mae and Freddie Mac are the latest examples.
But, I am definitely the lone voice in the wilderness on this
because most people, conditioned to think that business exists
as a giant entitlement engine and that the state should
guarantee "fair prices" and "fair wages," will be cheering this
senator on.
Free Market / Antitrust.
I am against the state interference of normal free market ecosystem. Our Cellular telecom industry isn't exactly healthy.
1.) We rank on the bottom 30% of the world for quality of service in wireless services
We have the among the worst cell networks, and prices are fairly comparable around the world (when you compare it with USD).
2.) We pay both to receive / send calls or data.
(The rest of the world only pays when they are the ones sending or calling.) I'm still unhappy with getting junk calls and having to pay for it.
I however would like to know the answer to this inquiry as well simply because I am a tax paying consumer and under the law I do have a right to know what I am paying for. I'm not interested to find out if the prices are cheap or fair. I am however extremely interested as to whether prices are artificially manipulated by a combination of corrupt commercial practices in the telecom sector.
Even most of the third world countries have better cell networks than us in the US. What's wrong with that picture? We basically invented the telecom infrastructure and as well as the concept and technologies used in today's wireless communications.
Check this out: Heidi Lamar
http://www.knowledgerush.com/kr/encyclopedia/Frequency_hopping/
I fail to see why if we are being the #1 economic gorrila on this planet, that our cell networks are performing that much under par and not matching up to our economic prowess.
Bogus arguments
messaging.
Regarding collusion? No evidence for that exists at all. There
are a wide variety of plans offering a wide variety of options.
You can get by message texting plans with prices varying by
provider. You can get unlimited plans. You can get a data plan
with a smart phone and use instant messaging to completely
bypass texting.
No, what this is about is a senator who wants to flex his power
and stomp on some people.
But what also concerns me is this attitude that the state is
always pure in its motives (except when they are Republicans)
and that business is always evil. The classic recent example is
the witch hunt on the oil companies (I also do not work in the
oil industry), in which the state via Nancy Pelosi actually
advocates the nationalization of the industry.
Bogus proxy
Referencing the oil companies right now...
tuning into the news lately, but the oil companies
have been plying federal regulators with illegal
drugs, sex and money. Why do you think they'd be
doing this, eh? Out of the kindness of their hearts?
Or maybe because they want to skirt around the law?
As for nationalizing the oil industry...oil is a
natural resource and most of the major drilling is
going on in publicly owned lands. That makes the oil
public property, and I'm betting we'd get more money
to pay off the trillions of dollars of debt this
government has racked up keeping the oil revenues in
our pockets rather than oil companies out to soak us.
The people in Alaska understand this quite well, which
is why they have a revenue sharing program for their
oil.
There must be collusion
If I have cell service with Company A and company A starts raises my rates then shouldn't Company B expect more customers? You'd think so but no. Company B raises their rates to match so there is no reason for me to switch providers. What's with that? Collusion maybe? Sure sounds like it.
It's like all the companies got together and decide they all raise the their rates at the same time to maintain the status quo. This all run counter to free market where competition is healthy.
Maybe.. Maybe not..
It could also be a case where Company B sees that Company A is getting away with charging more for a given service - so they figure "COOL! What the heck, if they can get away with it, so can we..." - and they raise prices. This, of course, is followed by Company C, D and E all running with the same mentality.
All companies want to make a profit. If they don't have that as a primary goal, they usually aren't in business for very long. Witness the dot bomb bubble of the late '90's. Billions in venture capital blown through, many times without a business plan or a clue as to how the company was going to make any money.
At least the cellular companies have the profit thing down. Collusion? Nah.. Doesn't have to be. It may look bad, but I don't see it being necessarily a given.
At the moment, the cellular market is fairly saturated. If you can find a new means to increase the bottom line, and it means jacking up your prices, then what the heck. The share holders will be happy. Wall Street is happy. Given the CEOs of the other companies are also looking at ways to raise their gross income, they're likely to follow in your footsteps. Customers look at it as part of the fact that everything else is going up.
I don't see texting as being a primary decision factor in choosing a cell carrier. If you're a heavy texter, you're likely to have an all you can eat text plan. If you're not, then you're not likely to be caring quite that much. You'd be more concerned with the cost of your voice minutes and the deal you can get for that.
Bear Sterns, etc.
Safeguards
If the oil companies were not under any obligation to keep prices at a reasonable level our gas could be costing us $6 a gallon right now.
It is a necessary evil for our government to watch out over these companies and make them justify their pricing. If no one did, these companies could all do as they please. Perhaps the Senator is on to something and perhaps the "jig is up" with the telecoms. They could lower the price as a result of being caught red handed.
And, since you keep referring to Republicans..... oh, nevermind. That's another debate altogether.
Actually if you took 5 minutes to do some research
They are two examples of how capitalism without control or constraint can and will destroy itself.
http://news.goldseek.com/GoldSeek/1221060509.php
http://www.nytimes.com/2008/09/08/business/08fannie.html?bl&ex=1221105600&en=acda2111e537322e&ei=5087%0A
http://loanworkout.org/2008/08/fannie-mae-freddie-mac-failure-the-lies-the-cover-ups-and-the-making-of-a-disaster/
that last link is a prime example of why special interest lobby's must be stopped or curtailed and castrated so as not to impose such a large amount of political clout.
Incorrect
Sowell refers to as socialized private companies. In other words,
they can gain all the rewards, but never have to take any of the
risks because the federal government ensures they will be bailed
out at taxpayer expense.
When you are guaranteed solvency by the federal government,
you are the most federally regulated business possible.
That's it...ignore the facts.
in the way of a good argument. Ignore them when they
point out that regulators were asleep at the wheel for
years. Ignore also the little tidbit that pure
capitalism, just like pure socialism, can't exist in a
vacuum because of human greed. Ignore the history of
this country when we didn't have federal regulation
telling big business "you just can't do that" with
things like sweat shops, forced child labor,
indentured servitude and predatory monopolistic
practices. Ignore all these things and more because
big business is our friend...it would never do
anything to harm this country.
No you are incorrect.
Stop with your rhetoric for a minute and do some research. I would like an apology when you find that you are in fact wrong (again) but I know that you are not man enough to admit it, so I won't hold my breath.
no, it wasn't capitalism
senators and other politicians geting favors, people lining their own pockets, companies writing bad loans and selling them (knowing full well they were bad loans).
people would go to one compan yand be turned down, then go to a corrupt one and get approved, all would pacoket the money and the loan would be sold.
same thing happened with the World Bank and lending money to poor countried, the people doin the loans did not care, they go their money up front and went away....
It was
Now before someone decides I am a socialist, stop right there. I am all for capitalism. It's a wonderful tool for moving ahead, BUT it must be regulated so that things like the housing market, Enron, and many other impacting professions do not end up like they did.
Enron occurred immediately after the energy companies we deregulated. This isn't speculation, this is hard and documented. The same is true of Fannie Mae and Freddie Mac, they were not regulated which led to book cooking, lies and outright deceit, which led to their current position of being bailed out and NOW they are being investigated and there is a lot of damming evidence that is going to put a lot of people away... so long as the judicial system works like it is supposed to.
But the fact remains unregulated capitalism will destroy itself because of ignorance of those on the outside (consumers) and greed on the inside (CEO and such). And now the American tax payer in on the line.
even the forefathers of our nation
If your company fails because it makes poor decisions, it's not the people's responsibility to cover your loses and pay you 24 million to buy out your company that failed. because that 24 million you just got payed is coming out of every US citizen's pocket and that's a crime if I ever saw one.
You see you are making the same mistake that other make...
It's not about protecting the company at the expense of the tax payer. If you looked at the bigger picture of what is at stake here, you would realize that there is about 1.4 trillion dollars that had the government NOT stepped in when they did, would have taken our economy out completely. In other words making the great depression look like a small pimple on an elephants tush. And that would have cascaded into other world markets as well.
I don't care if either company sinks or swims. BUT because they made illegal and bad choices the outcome would have been far worse had the government NOT stepped in. So now do you understand what is meant by regulation?
Companies are free to do as the market will bear, so long as it is legal AND also does not jeopardize our economy. But because these two particular companies have such close lobbiest ties, they were able to literally get away with lying to the public and the government. Also they have very close ties to the Stock Exchange, so when they take a hit so does our economy.
You have noticed that we are in a recession and that the dollar is very weak with the housing market crumbling all around us. It's because of a lack of regulations and oversight that this has happened. Like it or not, we are not mature enough to have a true free market. So the parents (government in this case) have to step in and make sure the children are playing by the rules.
Where are they?