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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."
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.
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.
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.
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.
If we can put a man on the moon, why can't we shoot people for Apollo-related non-sequiturs?
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.
517,602,528. There must be something infectious about Verizon and getting your decimal points in the wrong place.
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
Pretty much the same as gas...
If you want news from today, you have to come back tomorrow.
to download an mp3 ... if the RIAA smells you.
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.)
I wank in the shower.
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.
Furthermore, get off my lawn!
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.
Seven puppies were harmed during the making of this post.
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.
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.
this nation, under God, shall have a new birth of freedom. -- Lincoln, Gettysburg Address
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.
To do something right, you often have to roll up your sleeves and get busy.
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
Thank god no one texts me duplicate Slashdot stories!
The only surefire protection against Microsoft infections is abstinence. - The Onion
Texting prices in .dk: ~5 cents and falling. Yay free market economy! The US should try it one day.
You started the economics discussion, so here comes ECON 102.
There are only a small number of wireless carriers. Therefore an oligopoly exists. The demand curve for oligopolies is "kinked." This means above a certain point customers will rapidly stop buying, but below this point buyers will not start purchasing in drastically greater numbers. This means that the oligopoly will set a price point right at the kink in the graph.
What does this mean?
1) A section of the populace feels txts are necessary, and demand is inelastic. This is the lower half of the demand curve. This means a change in price does affect demand significantly.
2) An increase in population of that subset of people changes the demand curve, and moves the kink in the graph higher on the price axis. A price increase ensues. The oligopolies charge exactly the price they can get away with because market dominance allows them all to effectively charge the same prices easily. One carrier changes, the rest change to follow.
3) To stop this pattern, you don't have users reduce demand, you have to break the oligopoly, because lack of competition means that prices don't follow standard supply and demand.
"All great wisdom is contained in .signature files"
Rubbish. That's only true if
(a) There are lots of suppliers (limit as number of suppliers goes to infinity)
(b) There are lots of buyers
(c) There's perfect information (about the value of goods, and about all options)
(d) All goods are equivalent
(e) The market is "free" of regulation (but there's a dodge here -- regulation constraining theft, murder, or the threat of one of those is allowed)
The mobile market fails on many of these. Certainly it fails on (a). (c) is also a failure -- all of the services advertise to distort their brand worth, use confusing contracts, and so on. (d) is of course not true, since each network has different coverage (and small networks that may be interested in cheap prices suffer here). (e) doesn't hold either, with the FCC et al. involved in the game.
But even supposing that the big BIG assumptions of the free market held, why do you think the "equilibrium" delivered by the intersection of supply and demand is stable? It seems obvious to me that it's an equilibrium because no player in the market is happy with the price, but the forces pulling the price each direction are perfectly balanced. That sounds like an unstable equilibrium to me.
Use the Firehose to mod down Second Life stories!
Because you'd get slaughtered by the incumbents - a price drop here, a refusal of peer agreement there and pretty soon you're out of business.
Something bad is coming when people are suddenly anxious to tell the truth.
Cellular carriers give out free or subsidized phones as a method of keeping their customers signed up for long contracts. They keep a stranglehold on the equipment to further that.
However, by law when a carrier makes a material change mid-contract their customers, *all* their customers get a get out of contract free 30 day window. It's a great deal and you should exercise your rights when a carrier changes *anything* whether the change affects you or not.
So now that you know you are gaining important new rights that you didn't have before they raised the text message rates you can take advantage of that. You don't have to stop using the service, you can probably just cancel the agreement, though they may deny that. If they do just hang up and call back, it costs cellular carriers over $400 to acquire a customer, they don't want to lose you even month to month though they may deny that. So you're now month to month and can threaten to leave unless they give you another free phone. Heh.
FWIW I have done this. There was much gnashing of teeth at the cell carrier. Uh-oh. A customer who has actually read the contract!
.
Text messaging costs as much as it does purely to rip people off.
[snip]
The size limit is pathetic too
[snip]
then again I'm quite a verbose person.
I didn't notice ;)
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.