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OMG Did U C What U R Paying 4 Texting?
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."
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.
Reviewing just the first hour of video games.
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?
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.
Pretty much the same as gas...
If you want news from today, you have to come back tomorrow.
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.
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.
This comment is for entertainment purposes only. Any similarity to real insight or information is purely coincidental.
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.
Tilt at windmills. Occasionally one will fall over out of sheer surprise.
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.
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.
God invented whiskey so the Irish would not rule the world.
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?
Slashdot, fix your code or at least hire someone who is competent at it to do it for you.
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.
--
make install -not war
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.
"Destroy science and religion. Science would re-emerge exactly the same; but not religion." - Penn Jillette, paraphrased
I was recently reading about the whole George Vaccaro 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:
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.
I'm a consultant - I convert gibberish into cash-flow.
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.
I am not a crackpot.
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.
Nerd rage is the funniest rage.
I never understood why you would have to pay to receive a text-message. I'm from the Netherlands and here only the one who sends a message has to pay, receiving is free. As far as I know it is like that in every courty in Europe (but I didn't check them all). Where you come from, do you have to pay to get called too? Because if you don't, the whole thing doesn't make sense - a one second call has way more data-transfer than a 100-character text-message.
I don't get why US people put up with the receiver of a call or txt paying. It's absurd to me. Does the receiver of a letter pay? No. So why does the receiver of a call or txt pay??
== Jez ==
Do you miss Firefox? Try Pale Moon.
The problem is that every carrier does this, so you can't just switch to a different one because your current one is screwing you. Your alternative is to either put up with it or forget the idea of owning a cell phone entirely. The logical extreme of the latter is to end up living like a hermit in some shack in the backwoods because all of society has terms and conditions you don't agree with.
I read the internet for the articles.
Yeah, if you could fit a telegraph in your pocket and use it inconspicuously when you're in a social situation in which it would be either rude or inconvenient to take/make a phone call.
This article isn't about Europe and the rest of the world. But thanks for proving the point of the article and my post.
There is no -1 Disagree mod. Slashdot.org/faq defines mod options. USE IT.
The price of a T1 is irrelevant; it's basic economics.
If a market is competitive, then the price will decline towards the underlying expense of actually providing the service. This is the paradigm assumed by the 99% of the posts here.
If a market is not competitive, the vendor changes according to how *useful* the service is, regardless of the underlying expense, and pockets the difference.
Texting just shows that the cell phone service market is not very competitive.
AT&T Family unlimited texting plan ($30 covering five phones) ... Let's just call it 26,000 messages per month. 3000 / 26000 = $0.115 per message.
Layne
You're a couple decimal places off... you mean .115 cents per message, or $0.00115
This is why I don't understand complaints about text message prices. If actually use text messaging a decent amount, then yes, it is ridiculous to pay per message.
If you want cheaper text messages, then buy a plan that includes them (Verizon has a 250 message option for $5 = $0.02/message). If you want to send a single text message here or there, then you're going to pay a premium for using services that aren't part of your plan. I don't see how this could be considered unfair.
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.
Let's consider these same calculations on the $30 unlimited ATT plan. A single MP3 download would cost... $30. Let's just say if I'm planning on downloading MP3s using text messages I'm going to get an unlimited plan and save myself $23,970.
the vendor changes according to how *useful* the service is
Or, more accurately they charge what they can get away with to maximize profits before people start shifting to less suitable substitutes. In this case things like voice mail(or even old style answering machines), actual email, or just don't text.
Texting just shows that the cell phone service market is not very competitive.
Or, at least at the moment, that people don't choose their service providers on the basis of per-text charges. As others have noted, those that text a lot generally go for unlimited plans.
I had a choice of a whole two of the cell companies given my location(verizon and alltel), and I'm old-gen, I don't text or surf. I bought a phone on the basis of reception, battery life, and bluetooth. The bluetooth headset helps reception because there's only a few good reception spots in my house/area. Being able to stash the phone in one helps. I have the second cheapest national plan they offer(I do travel semi-frequently). I don't even remember what the fees for data or text messages are - because I don't do that. Though I am considering getting a data plan now - my cell can act as a modem using bluetooth with my new computer. Then again, I have high speed internet at home through DSL that'd kick the data rate I could push through my one to two bar signal zone, have high speed internet at work, and most hotels/motels today offer free internet. The biggest area for me to use my computer would be in the airports - and I'm not in them enough. Still cheaper than the $10-20 my local hub wants for the hour or two layover I generally have, but I just do without at the moment. I looked at it mostly in the 'wouldn't this be neat' fashion.
Back on text messaging - you could say the same thing for long distance rates, pay phones, per minute charge rates for going over your monthly minutes.
In fact, it seems that phone companies like doing the same thing as banks - offer plans/accounts with decent terms and rates - yet charge fees/penalties like crazy for any deviations.
I don't read AC A human right