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Senator Questions Rise In US Texting Prices
vimm writes "Senator Herb Kohl (D-Wis.) has started an inquiry on the rising prices of text messaging (up 100% since 2005) that has occurred almost in sync with the consolidation of 6 major carriers down to 4. In a letter sent to Verizon Wireless, AT&T, Sprint Nextel, and T-Mobile, Kohl said the increase 'does not appear to be justified by rising costs in delivering text messages.'"
This message just cost me $427 to text.
Senator Herb Kohl (D-Wis.) has started an inquiry on the rising prices of text messaging (up 100% since 2005) that has occurred almost in sync with the consolidation of 6 major carriers down to 4.
Well, it could be that the competition was driving prices down to a lower level and then after the two consolidated, this (money losing) price reduction natural re-adjusted back up.
Another reason could just be that it's just as easy to sell plans at 10 cents a txt as it is to sell them at 5 cents a txt. We simply don't realize the cost adds up as consumers.
It could also be that people use text messages about twice as much now as they did in 2005 and the hardware just can't take it, so they adjust the price to reduce usage.
I think we've discussed this absurd price before. I am quite naive about the whole electrical engineering side to this but well versed in the software of it. If it costs nearly nothing for me to talk for a minute, why couldn't they wrap the txt into a digital signal identical to what our vocal signal is wrapped up in and just let the receiving unit decode it as a special text message across the same audio range (like the old phone modems)?
My work here is dung.
Sounds like the Cellular industry hasn't been contributing enough to a certain Senator's campaign.
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Another interesting question: my phone service (through Verizon) has free after-hours calling, but I pay the same rate for text messages and other data services regardless of time of day. Surely if the data from my phone call is cheaper to transmit at 10pm, then the data from my SMS message is too?
Herb, we told you the check was in the mail, why can't you be more patient? I have to warn you if you continue on this track future checks may be even slower to arrive. I'm sure you'll start to see things our way very soon.
Sincerely,
AT&T
Issues that matter to people will always get raised during election time. The price of gas will drop dramatically pretty soon just before the election and there will not be any connection to world events. It happened times before and will happen again. Everyone knows Oil Industry == Republicans and the easiest way for them to gain favor is to relieve people with lower gasoline prices for a short while.
But these tactics aren't limited to the price of gasoline... we will see more issues like the price of texting or all sorts of other nonsense that people can rally behind. It is unfortunately a part of the game and typically, even though people get excited about the apparent intention to reign in some justice and sanity, almost nothing ever really happens... except, perhaps, additional contributions from the accused industry.
Except you get charged whenever somebody sends you a txt. Not cool.
SMS prices are not based on what they cost to deliver they're based on what the market will bear. Downloading an mp3 over SMS would cost over 5 grand.
I'm not sure there's so much collusion as a majority of people willing to pay insane prices for texting, and cell phones in general. I recently found a cell phone bill from about 10 years ago - it was $9.99 per line (times 2) plus tax (I got a local big-employer discount, the regular rate was $14.99 per line). It came with, I think 120 minutes, which is all I ever use anyway. My current Verizon bill is now easily $85/mo for two lines with a basic text package. Sure, there's been inflation, but there's also less competition.
I understand that in countries where the service providers are separated from the equipment providers the competition is fierce. I'm not sure but I'd guess that it's because people can jump from provider to provider on their non-crippled phones.
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OUTSIDE_IP=$(dig +short my.ip @outsideip.net)
I for one welcome our Questioning Senator Overlords!
Zhrodague.net - I do projects and stuff too.
We respectfully take your concerns into consideration, and present you with this money basket. We hope that this free donation to your re-election campaign, brand new BMW, and lakehouse are enjoyed thoroughly by you! Thank you for ceasing your inquiry - err, we mean, thank you for invariably enjoying our gifts!
Love,
The Telcos
Usually it's conservatives who argue for the free market to sort things out, and liberals want increased regulation.
Anyway, it would be good to let the free market sort this out. The fact that it hasn't implies that the cellular market is not free. Free markets work because of competition, the high prices of text messages indicate that there's no competition in that market. That's not a good thing, regardless of which side of the aisle you identify with.
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Quite right. And petrol going from $1.10/gallon to $4/gallon is no big deal either, it's only $2.90 worth of difference. There are more pressing issues than gas prices, like healthcare, crime etc.
Drill baby drill - on Mars
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NO U DONT UNDARSTAND!!!!!1 OMG LOL ITS DA TENAEGRS TAHT R CLOGNG TEH ARETUBS WIT TEH TEXT MESAEGS!11!1 OMG WTF LOL IF TH3Y W3RE ANY CH3AEPR THEY WUD COMPLATALEY CLOG TEH TUBS!1!1!!1 OMG LOL
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Or maybe a showy issue that most americans can identify with, will help non-technical americans realize how badly monopolies are robbing them? You know, and I know, that the cost of sending a text message is so incredibly small charging any amount of money beyond voice service is essentially highway robbery. But many people think it's new, and thus must be a huge complicated thing.
Yeah, text messages themselves are stupid secondary problems. But waking people up, and forcing them out of the idiocy of news tv talking heads, and forcing them into the cognitive dissonance caused when they realize businesses are hurting them because capitalism ISN'T working as designed... that helps a lot. Otherwise it sounds like a bunch of pompous academics in suits talkin fancy words and talkin smack about god and the president.
Unfortunately, I'm sure we're all aware this is just a senator trying to make it look like he's rattling a few cages
Actually, afaic, Herb Kohl is one of the few good guys left in Congress. And fwiw, since he's got his own millions of bucks from the Kohl's department store chain, he doesn't need money from anybody. Got his own stash, thank you very much. So while I wouldn't deny that he's a publicity whore (duh! he's a politician!) I would say that it's a safe bet that, oddly enough, he's pushing this in part simply because he's disgusted with the telecom companies.
Now if only HE would run for president.
A man's gotta dream; ya know?
It's all about the information. And what we do with it.
In CDMA, the broadcast from one base-station is divided into many channels ... 1 pilot, 1 sync, 1-8 paging, and up to 61 traffic channels (per frequency channel). Ignoring the pilot and sync, which allow the cell phones to find and synchronize the the system, we have paging channels where the phones watch for messages from the base station letting them know what channel to go to for an incoming call, and traffic channels for those calls.
Into this system, text messaging was bolted on as an afterthought. These are short messages, so they get sent out on the paging channel, since it isn't worth the time and effort to set up a traffic channel, only to tear it down again 80ms later, after the message has been transmitted.
Then came unlimited text messaging plans, and teenagers. "Hi sue! How R U?" [send] "Gr8! Saw Bob at park." [send] "Really? What was he wearing?" [send] "The shirt you bought him!" [send] "Awesome!" [send]. All of a sudden, relatively speaking, the text messaging system volume overloaded the paging channel's regular traffic. Network areas which only ran a single paging channel, suddenly needed to assign more channels to paging. Ok, not a problem, the standard allowed for up to 8. But in areas where a lot of phones were in use already had multiple paging channels. These find themselves in running out of paging channel bandwidth, while large swaths of traffic channels are not in use.
The problem isn't that text isn't cheap to send. It is the standard and the system were developed for voice traffic, and a tiny fraction was reserved for short data messages. The use case of teenagers with unlimited text messaging wasn't considered. To change the standard, and the systems which employ the standard - such as to add more paging channels - will require new phones and/or software upgrades to all existing phones out there, or they'll suddenly not work. It isn't just a matter of upgrading software in the network base-stations.
Companies only believe in the free market when it suits them, so they don't deserve it. The only way to keep prices low is to intelligently regulate and keep the corporations small and relatively powerless so they don't have the resources to buy their way into the government's good graces.
Without stiff and proper rules keeping corporate interests separate from government interests, you always end up with corrupted governments relaxing regulations and robbing public resources for private profit, or as they like to call it, privatizing. Notice under the Bush administration that all of the deregulation and plundering of public property has resulted in a highly unstable economy. When you eliminate so many rules that the only thing stopping the resulting mega corporation from ripping people off are the inherent ethics guiding a company, you'll quickly be reminded that the only moral standard they answer to is the bottom line.
If guns kept people safer we'd be allowed to carry them on commercial flights.
I must say, I love the logic of that position! Let me try one:
If bottled water kept people safer we'd be allowed to carry it on commercial flights.
I want peace on earth and goodwill toward man.
We are the United States Government! We don't do that sort of thing.
But the price they charge customers will depend on what customers are prepared to pay. Network operators charge more, per amount of data moved, for text than they do for voice (a single SMS uses less bandwidth than a second of voice, yet costs about 20x voice on most plans). Since it is waste, they can afford to discount heavily to bulk buyers (who don't mind their SPAM taking a bit longer to get there).
Thus, network operators love text: it converts their waste into something more valuable than their main product. How cool is that!
Engineering is the art of compromise.
You're talking to a society of people that will spend $1.25 for a bottle of water out of a vending machine which is sitting right next to a water fountain.
Prices will go down when people stop using the service.
will require new phones and/or software upgrades to all existing phones out there
Why not just roll it out in stages like any other protocol update? Build a specification that uses the EV-DO part of the network for SMS and have all new phones receive/send SMS that way by default.
The old system could be left in place indefinitely (AMPS was a dinosaur and still supported up until Feb 2008) and would receive less and less traffic as all those teenagers upgraded their phones. Hell, I doubt it would take that much time. The phone that Mom and Dad bought them three months ago is so YESTERDAY.
I want peace on earth and goodwill toward man.
We are the United States Government! We don't do that sort of thing.
The fact that it hasn't implies that the cellular market is not free.
Says who? There are four providers of text messages, and several other means of communicating data. Would you believe that for many people, the VERY SAME DEVICE that sends text messages for $0.10 can be used to send a one-minute voice communication for ZERO INCREMENTAL COST to the customer, but the customer chooses to pay the $0.10 anyway?
Not to mention the myriad of other ways people have to share information OTHER than text messages.
The high prices of text messages indicate that there's no competition in that market.
Except that YOU don't get to decide whether the price is high or not. The market does. And the *MARKET* has decided that the price of text messages is reasonable. People are willing to pay $0.10 to send a text message. What it COSTS to provide the message is irrelevant.
Did you know that people sell oil and gold for more than the cost to mine it? Did you know that that soft drink you pay $3.50 for at the movie theater costs the movie theater pennies worth of syrup and cold water?
Did you know that you can get a cell phone plan that lets you talk on your phone from nearly anywhere in the country and to anywhere in the country for *LESS* than it used to cost for a landline and long distance?
Did you know that many drugs sold for $10 or more a pill cost mere pennies to manufacture? All you have to do is invest a few billion in finding one that works.
And while the incremental cost of sending a text message may be $0, all you have to do to send them is invest a few hundred billion in a cell phone network....
At the end of the day, if people are willing to pay $0.10 a minute and $0.10 a message, then that's what people are willing to pay. Which one provides the better margins to the cellular company is irrelevant, as long as people are willing to pay the price charged and the company has enough revenue to stay in business.
paintball
No, they do it so that families who have teenagers have to have an unlimited plan or face a $2000 cell phone bill.
Taxation is legalized theft, no more, no less.
Yes but the substantive content and intrinsic profundity of the messages has increased over the years. Further costs are incurred as a result of the sheer philosophical depth of these messages.
AC sucketh at logic. Every day thousands die in Africa from malnutrition, so should solving the problem of poverty in the US be abandoned?
The cost of text messaging is vastly disproportionate to the actual data transfer that takes place. VASTLY. If you paid the same amount for data transfer on your internet connection you would be shitting blood and blowing steam out of your ears instead of saying "Who cares.[sic]".
Solving the problem of over-priced text-messaging is as simple as changing a variable or a few in the billing systems of the main carriers, no doubt.
Even during an economic downturn, there are people who text-message. Lowering the cost of that text-messaging means they have more money to put into buying clothes or butter or cars or computer games or any actual goods that drive the economy rather than spending arbitrarily inflated amounts to the major mobile carriers.
Repeat after me: "THIS IS NOT A ZERO-SUM GAME!". Just because one Senator writes a letter on the subject of cell-phone company gouging, doesn't mean he can't also fight on any of those issues that you deem more important. It also doesn't mean that other Senators can't fight for those other issues. Or are you implying that all Senators are in collusion and fighting only for lower text-messaging costs?
No wonder America is eating itself if they allow people like the parent to vote...
if we'd just established a national telecom network rather than give subsidies to the telecoms so that we can pay for the infrastructure they ream us for using, then this wouldn't be happening.
IT/communications infrastructure is just as important as roads and sewers these days. and there are much more efficient ways of managing our national communications network than the mess of private networks we have right now--which does not give us the benefits of consumer choice, yet still lacks any kind of centralized planning which a natural monopoly ought to have.
if all communications infrastructure could be nationalized, the first thing to do would be to:
compare the progress & development made on the internet/web as an open public communication network with that of our nation's cellular networks. very little innovation or technological progress has been made in cellular technology because these proprietary networks are closed to outside developers. only a small number of handset makers are given permission to build devices for use on these private networks, and the telecoms' tight grip of these networks preclude the possibility of adopting new features.
and since the internet can handle the transmission of digital video, audio & text just fine, there's no point in having redundant communications networks that are dedicated to TV/radio/telecommunication--especially in the case of long distance calls and text messages where telecoms charge extortionate prices for something which costs close to nothing to accomplish through the public internet.
and if cellular networks were converted into municipal wi-fi coverage, not only would it provide ubiquitous wi-fi internet access for everyone, but we'd stop having to pay extortionate rates for cellular data plans. we would be converting a highly specialized network of limited usefulness to a much more generally useful network that can accomplish all of the same things and more.
Capitalism works just fine ... text messaging is too expensive, so I don't use it.
There ... capitalism at it's finest. If someone using text messaging is complaining it's too expensive, then maybe they should look at alternatives or STFU. THAT is what capitalism is all about.
Oh. So when I get a message telling me that Zoltan has prepared my fortune for me, or that my Perfect Crush is waiting for me, or I can find out my top five Perfect Lovers and I get dinged $0.10 apiece for receiving them, just exactly how is that "capitalism at its finest" and how, pray-tell, am I supposed to stop 'using' it?
Per-text messaging rates exist to punish those who send or receive the occasional message. It has nothing to do with the big "problem" the telecom companies are talking about - the power text users who're "clogging" the network with their flurry of messages. Those, you see, are on low-priced fixed-rate unlimited message plans so they remain unaffected.
It's simple math. At $0.10 apiece, unless and until I start sending/receiving more than 50 messages consistently each and every month it's not worthwhile for me to sign up for a plan - even though it's a mere $5.00 per month. However any time I talk to a rep from my phone company they tell me my option is to do just that.
This isn't capitalism; it's extortion.
BD Phone Home!
Shameless plug. Like you weren't expecting it.
That's the problem right there. In the US, the person *receiving* the message pays for part of it. In sensible countries (like Australia), the person *sending* the message bears the full cost - there is zero charge to receive a message.
As a result, there is a *lot* less SMS spam in Australia.
"Or are you implying that all Senators are in collusion and fighting only for lower text-messaging costs?"
No. They are all going after populist minor problems that everyone can agree on, but aren't major issues. Most of the time, the problems they examine aren't solvable by congress directly anyway and its a huge waste of time. Congress has examined Exxon multiple times, but usually only in an election year. They are letting the real problems slide in order to get re-elected more easily. The entire process has become circular. "If I vote for this my critics will tear me apart and I won't be re-elected to solve problems in the future". Sound familiar?
Even those who arrange and design shrubberies are under considerable economic stress at this period in history.
Yep. Because I'd have one too. So if he is a bad guy, I will see his, he will see mine, and probably figure I'm not the only one. So more likely, he's another one just like me.
Meanwhile, the other guy's thinking: "Whoops. Looks like dumbass brought a gun to a plane fight."
Breakfast served all day!
Did you know that people sell oil and gold for more than the cost to mine it?
Did you now the Oil companies are watched like hawks for trust violations? and that a large part of oil prices are set by the largest cartel in the world? Hardly a free market.
Did you know that that soft drink you pay $3.50 for at the movie theater costs the movie theater pennies worth of syrup and cold water?
Sounds like vendor lock in, which last time I checked was considered a coercion of the free market.
Did you know that many drugs sold for $10 or more a pill cost mere pennies to manufacture? All you have to do is invest a few billion in finding one that works
NO, bad idiot, read some facts. drug companies spend more on ads then R&D, it's just they get the govt. to strong arm everyone through intellectual property laws to pay more, Complete failure of the free market.
In the competitive free-market advocated by Milton Friedman, not The oligopolistic-market advocated by the modern republicans, the consumer demand and the cost of supply set prices, not the whims of some giant company that has strong armed govt. support and stifled competition.
It's basic morals, universalize the maxim: if every company did the same you'd only have on company left after a while, it would be the one who controlled the food and you'd have to sell your life away for just enough food to survive. It happened in the past, it was called feudalism, and is basically what your view of business advocates at it's extreme.
The controls are pretty redundant, and their routing is not obvious from anywhere inside the passenger module. The odds of randomly hitting anything critical with a centimeter-wide slug from a handgun before other passengers with guns would take you out is astronomical. Especially if they just had a bowl of complementary derringers at the boarding ramp.
And how is "not able to fight back" going to help us with that?
Can you be Even More Awesome?!
Basically, the US Constitution was supposed to say what the government was allowed to do. Specifically it is not stating what the citizens are allowed to do. It limits government, or was supposed to.
It was brilliant - form a country with a government what was basically not allowed to do anything but defend its citizens from not being free...
If it wasn't in the constitution, the federal government wasn't supposed to be doing it.
This issue is a bit more complicated than you think.
... the post office is charging $0.42 per text message, and it takes days to get there!
Yes, but a post office text message can contain about 840 Verizon text messages and a memory card with 16 GB of data. Trying to send that over a cell phone would take half a week of data transfer and cost you three arms and a leg!
The odds of randomly hitting anything critical with a centimeter-wide slug from a handgun before other passengers with guns would take you out is astronomical. Especially if they just had a bowl of complementary derringers at the boarding ramp.
Oh great, then I'd have someone's kid shooting the back of my seat for the whole flight.