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What Carriers Don't Want You To Know About Texting
An anonymous reader writes "Randall Stross has just published a sobering article in The New York Times about how the four major US wireless carriers don't want anyone to know the actual cost structure of text message services to avoid public outrage over the doubling of a-la-carte per-message fees over the last three years. The truth is that text messages are 'stowaways' inside the control channel — bandwidth that is there whether it is used for texting or not — and 160 bytes per message is a tiny amount of data to store-and-forward over tower-to-tower landlines. In essence it costs carriers practically nothing to transmit even trillions of text messages. When text usage goes up, the carriers don't even have to install new infrastructure as long as it is proportional to voice usage. This makes me dream of the day when there is real competition in the wireless industry, not this gang-of-four oligopoly."
The feckless youth I see texting in public do not appear to be the sort who employ reason or critical faculties. That's the kind of customer base dreams are made of.
The cost of that cleanup, of course, will be borne by taxpayers, not industry.
...but it's good to see this fact receiving some mainstream attention. I guess it's inevitable that people now tend to ask that if it costs x dollars to transfer y megabyte from my phone, why do text messages cost a lot more when they are so tiny? In the digital age text message fees seem more and more ludicrous even to ordinary people.
It takes a man to suffer ignorance and smile
Be yourself no matter what they say
As a service that the operators could milk their customers with. It was only when it started getting popular that they heard the cha-ching sounds and start charging outrageous fees.
No, apparently you failed economics.
If there is sufficient competition in the market profits will be driven to zero and the price of the service will approach the *actual* cost of providing it (which is close to zero, apparently). The fact that text messages cost 1000s of times more than they should indicates that there is insufficient competition in the industry, excessive barriers to entry into the market, etc.
SMS is just a special case of very low-bandwidth data traffic, which should be superseded by email or jabber anyway.
-jcr
The only title of honor that a tyrant can grant is "Enemy of the State."
World prices for sugar is about 1/5 that of sugar costs inside the USA.
HFCS is less expensive in the US than sugar.
The artificial prices of sugar and the artificial price of corn leads the USA to use corn for sweeteners and corn to make ethanol.
The solution is to stop propping up the US sugar companies. If C&H cannot compete on the world market, then let them fail. Why should the population of the US prop up an industry which has had many many decades to compete on the world market.
I was an exchange student in Finland back in '96. This was when *nobody* had a cell phone in the US. Shortly before I left for Finland, my sister and I were in a shoe store. We heard a guy walking down the isle talking to himself, and we both looked nervously at each other, because we were about to encounter an obviously crazy guy. Turned out he was on a cellphone.
:)
Anywho, when I got to Finland, everybody in the high school had a cell phone. Well, almost everyone, and if they didn't have one when I got there, they got one that year. And the thing was, *they texted all the time, because it was cheaper, much cheaper, than a voice call*.
Flash forward five years to the states, and then everyone is getting cell phones, but *without text service*. And now, text service is something that costs per text, or something ridiculous like that. In Finland, and I would guess most of Europe, you get some ridiculous amount of texting included in your plan, or you just have a straight-up bandwidth plan, which covers voice, text, media, etc.
I wish Americans would travel a little more often, to see how the US is becoming a technologically backwards society. Technological improvements which are more efficient are seen as opportunities to gouge customers, instead of compete and offer lower prices. The same thing was going on with banking about five years ago. American banks were charging fees to have people access their accounts online, while Finnish banks were giving it away for free, because then they didn't need to pay tellers. Oh yeah, and you could pay your bills and do banking by text service.
Computers are useless. They can only give you answers.
-- Pablo Picasso
HFCS is only less expensive because of the sugar tariffs place on the importing of sugar.
The problem is political.
Corn farmers are getting tax incentives to grow corn.
Then creative people need to figure ways to use all this corn.
It's hard to find something in the usa that isn't made with corn. It's not the healthiest thing. Farmers could be growing crops that are much healthier.
It's not C&H's fault that there is a sugar tariff.
How many participants in an industry do you need to have before you'll say that the goal of competition has been met? Four seems like it would be enough. If there was some advantage to be had by using a price structure that accurately reflects the true cost of text messages then I suspect one of the carriers would have already tried it.
"WTF? Does that mean the US telcos are double dipping?!"
No, it is just a different model.
In the US/Canada, calling a mobile vs. calling a landline is the same price (often unmetered or very cheap). In most cases it costs just a few cents a minute to call anywhere in the US, landline or mobile, usually including Alaska and Hawaii. Some packages even extend that to Canada, and western Europe (non-mobile in the latter case).
That is not the case in Australia, the caller to a mobile is usually charged a hefty surcharge. Take a look at your international calling rates, you will see no special mobile rate for calls to the US. It is all the same rate, there are no special mobile area codes (a.k.a. city codes).
In many cases, you can even transfer your home number to a mobile if you are eliminating your landline.
One could argue which concept is better, fairer, or whatever. As with Australia (and almost everywhere) it really depends on the package you get.
The only athletic sport I ever mastered was backgammon - Douglas William Jerrold
No its not obvious... supply and demand economics, right? Well, the demand is high, but the supply is essentially infinite as TFA points out. N/infinity = zero for extremely large values of N. Therefore it should be practically free. What we are looking at is a price-fixing scam.