OMG Did U C What U R Paying 4 Texting? 721
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."
Texting vs. Hubble (Score:5, Interesting)
Re:Whoops, sorry (Score:4, Interesting)
free (Score:5, Interesting)
You know what the problem is? Capitalism. (Score:4, Interesting)
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.)
Worse than that (Score:2, Interesting)
Simple fix (Score:4, Interesting)
Re:Channel miles (Score:3, Interesting)
Might be thousands of dollars, but likely it is not.
Back during my days I call 'The search for internet', I priced out the cost of some of my options.
A T1 would have run me about $600/month, and I couldn't even get cable until I paid to run the lines myself. I was even too far for DSL (my CO didn't support DSL, but I would have been too far even if it did)
I cannot imagine that on average, T1 lines cost so much that text messaging needs to cost as much as it does. Heck, in the rural areas, could there even be that much text traffic?
mmmm I love deregulation in the morning (Score:3, Interesting)
Now kids remember "Deregulation will result in more competition and lower prices for the consumer"
I love it when an industry that is inherently non-competitive due to the fact that the spectrum is limited and the only way to make money in telecommunications is through economies of scale. The only guys who make money in telecom are the big guys and they make it buy making us pay and controlling parts of the spectrum. This is why it is licensed, the "tubes" are only so big and you can't add more.
It is just like the media ownership rules. Buy loosening the rules, consumers don't benefit but the bottom line gets bigger for the big guys. Government used to understand that because these companies are caretakers of our EM spectrum, they are allowed to make money and have monopolies (or close to it) but they must follow certain rules like justifying price increases with fact.
OK, rant over. Proceed with texting while driving.
Re:Some data 4 U (Score:5, Interesting)
i have an AT&T phone - i don't have a text message plan because i have the data plan and juse AIM/ICQ on my phone...
i get charged 25cents for each incoming text message - there is no way for me to disable incoming text messsages...
that is bull shit - i don't want them - but they don't have a way of disabeling them coming in - and yet they will happly charge me for incoming...
if they are going to charge on a per message basis - the sender should play flat out, oh wait they do... then why the hell am i paying to recive?
right now at AT&T the rate (if you don't have a messagling plan) is 35cents to send and 25cents recive..
that is 60 cents per message..
are they trying to tell me that they are so damn bad at delivering small bits of data accross the cell network that it costs them more than the oh so inefficent us postal office does to send a first class letter physicly accross the country (42cents)
the phone compaines are full of shit.. as soon as there is a better way - I.e. a company that doesn't screw everyone over .. i will be more than happy to switch
Re:Some data 4 U (Score:5, Interesting)
I am on T-Mobile, and there is no way to opt out of receiving text messages. Each one I get costs me $0.15, whether it's from someone I know, a text sent to the wrong number, or simply just a spam text, which I get fairly frequently.
Re:Some data 4 U (Score:2, Interesting)
(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.)
Why would you disable *receiving* text messages? It's sending them that costs money...
Most carriers charge for both sent and received text messages. Yes, this means that if you and your friend are on the same carrier, they get paid twice.
Re:Basic economics (Score:5, Interesting)
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.
Re:Some data 4 U (Score:5, Interesting)
U.S. Cellular is fairly unique among readily available providers in WI in that they don't charge for incoming text - only outgoing. They've raised their outgoing prices along with everyone else, but they proudly advertise the fact that incoming text is free for everyone, even if they don't have a text plan. Any other national or regional carriers that do this?
Re:Basic economics (Score:4, Interesting)
Price is the intersection of supply and demand curves.
Are you really so naive?
If text messages cost to the user a lot more than what they cost to carriers the normal laws of economics would make new carriers appear on the market that offer competitive prices and drive the cost down to the _real_ service cost. Why doesn't it happen? Well first entering the wireless carrier business require a huge initial investment and second: *monopoly*. The current american carriers are a cartel that agrees to keep the sms prices over a certain price so that the business is profitable for all the players.
quoting from a comment:
So you wonder, why do I pay so much for a SMS or a MMS or even a Call: after the debts for the initial hardware infrastructure have been paid by the carrier you are still paying because of market segmentation (You wonâ(TM)t change the carrier on the fly) and a little monopoly (Almost impossible to start a new carrier from 0).
A very similar thing is happening in Italy where a new carrier (Wind, but later Blu did the same thing) entered the field offering free sms, then started to charge for them after it established a position in the market.
Re:Some data 4 U (Score:5, Interesting)
If you don't want to pay for text messages, don't send any, then call the customer service rep. T-mobile will credit you the inbound charges in most cases (if you're polite about it and explain you never use text messaging so all that you received was unsolicited).
Still a hassle, but I've heard a rumor that T-mobile will begin allowing customers to opt-out of text messages starting in August when they bump the rates to $0.20.
It's still ridiculously overpriced. This is what happens when the FCC and FTC don't do their jobs and let the companies merge and merge and merge until we're left with oligarchies rather than true competition. I think it should be illegal for phone companies to charge for the first couple minutes of an inbound call and ANY inbound texts.
Right now, they're just milking SMS for all they can because they know its days are numbered. The first phone on the market (i.e. one of the open platforms coming out) that treats text messages as ordinary data and eliminates the phone company's ability to charge outrageous per-message rates will kill this little "profit center" dead.
Re:Is this really an issue? (Score:2, Interesting)
But opting into unlimited plans shouldn't be necessary. My company has a few sat phone accounts, and guess what they do? The plan gets automatically adjusted by the carrier at the end of the month according to usage.
You didn't use your account at all this past month? Fine. They'll bump you down to the minimum plan and charge you accordingly.
Used it every hour of every day? Still fine. They bump you up to the unlimited plan and charge you the appropriate amount.
Can't you see how beautiful this is? And how mindbogglingly simple? This is the kind of thing we should be expecting from our cell carriers! (But, noooo, it makes too much damn sense!)
Re:Some data 4 U (Score:4, Interesting)
but they don't have a way of disabeling them coming in
Not true. One of our employees was racking up around $50.00 a month from unsolicited incoming text messages. Just took me a simple phone call to AT&T to get them completely blocked from his phone.
Re:Some data 4 U (Score:3, Interesting)
ATT used to do this, before they became Cingular, back when they were still ATT (confused yet?). I used to have a website set up for people to type into to text me whenever they wanted. Obviously, I took that down a long time ago, as that would cost me a small fortune today.
Re:Some data 4 U (Score:5, Interesting)
Sprint turned off my text messaging (Score:4, Interesting)
My 8-year-old daughter's free* phone on a new phone number came with over 1000 spammy and raunchy text messages. They wanted to charge us over $100 for the messages. I called Sprint the instant I opened the box.
At first, she tried to say that we were on the hook for it but then I explained that we had just received the phone and I had just opened the box (direct from Sprint). I told her that we didn't want text messages (especially if some randomly-dialing computer can cause you to be charged hundreds of dollars before you even notice). Recently after we changed plans, I noticed that I got a text message again. I called them up and told them that text messages were supposed to be off on all our phones. They took it off again and I haven't had one since.
It's really not too much of a problem on Sprint. Just tell them you don't want them and they disable it.
Re:Same as gas... (Score:4, Interesting)
Except that the US doesn't have terrible gas prices ;) Try working out how much we're paying per gallon in the UK and comparing it!
Of course, the US has states as large as the whole UK. The UK is simply not going to burn as much fuel maintaining infrastructure as the US is.
It reminds me of a fluff piece I saw on the local news a while back. The angle was comparing the price of gas to the price of various other commonly used liquids. For example, they noted how much more shampoo cost per gallon. Of course, that overlooked the fact that we don't use shampoo by the gallon.
Volume affects a market. What your paying per gallon may not have the same effect if you're not using as much of it (and no - its not all about the SUVs).
There's a good reason we pay for incoming calls! (Score:4, Interesting)
In the calling-party-pays system, the person paying for calling the cell phone is NOT a customer of the cell phone company. Therefore the cell companies have NO incentive to provide competative rates for incoming calls. If you have to call someone, you aren't going to not call just because they are using company-x.
In the mobile-party-pays system, the person paying is the cell phone owner, who IS a customer of the cell phone company and can shop around or choose a different plan to get better rates. The cell phone companies have a huge incentive to offer competative minute plans since people tend to shop around when buying a phone. Also, because there is no difference in calling a cell phone, this system allows people to abandon their landline phone and use a cell phone only -- no need for two separate bills.
In the US most people have a plan that provides more than enough "free" minutes so that they never get a per minute charge. What is the charge to call a cell phone in a calling-party-pays country? The equivalent of $0.15/minute? On my mobile-party-pays plan I have NEVER come close to going over my allocated minutes, so the marginal cost per minute is $0.00/minute.
Re:Channel miles (Score:3, Interesting)
Text messaging costs as much as it does purely to rip people off. The same as some companies charge over a quid for a poorly sampled proprietary ringtone. I used to spend maybe £10-£20 a month on texts until I realised how stupid it was and just started trying to be more organised and basically only using my phone for receiving texts rather than replying to them. Sure, I lost a lot of friends, but the savings were worth it!
Actually, these days I pay nothing for my texts because I have a company phone, but I still try not to be stupid with unecessary texting and "hi, we'll be there in 5 minutes" pointless phonecalls, etc. People eschew good organisation these days and instead waste money on their phones.. sometimes a text can easily be worth 10p (20 cents, except in the UK it's always cost that much, it never used to be 5p), but most of the time I expect it isn't. The size limit is pathetic too, I often end up getting up to the 3 texts limit if I'm sending any more than a yea or nay answer.. then again I'm quite a verbose person.
Re:Mobile Monopolies (Score:4, Interesting)
Whine harder. Don't send money. Vote for and donate to those people who do the right thing, or will when elected. Expose the bribetakers and liars publicly.
Politics is a differential equation. Making it harder and more expensive to do the wrong thing is the only way to get the right thing. If it's important, we do it. If we don't, we're as much to blame as the people working for the wrong side.
Nobody said democracy would be easy, or even very democratic. But it's all we've got. Unless we surrender, and then we've got nothing but an iron boot stomping on a human face forever.
Sprint's grandfathering practices (Score:3, Interesting)
Re:Some data 4 U (Score:5, Interesting)
Re:You know what the problem is? Capitalism. (Score:3, Interesting)
Let me tell you, if I got a single text message from some stranger that I had to pay for, I would drop their service the next month, and I would tell them why.
Luckily for them, they took my threats seriously and blocked my incoming text messages. I had Cingular, which is now AT&T. The block must have carried over, because I still don't get text messages.
Re:Some data 4 U (Score:1, Interesting)
you can get out of your contract because they did this.
I would highly recommend this. Even if you're satisfied with their service, just to send a message.
Now a disclaimer. I am a T-Mobile ex-employee, I was very happy with my employment there (and still am, left on pretty good terms after being promoted several times to boot). Of all the company call centers I worked at, T-Mobile seemed to be the most dedicated towards doing the right thing for their customers (examples can be seen on their 24/7 phone support, mid contract upgrade prices - where they pro-rate the phone discount if you can't wait a year, and their 1 year commitments (may have changed)).
Now if any company could be made aware that their customers demand reasonable text messaging (SMS) terms it would be T-Mobile. So when the time comes, call them up, tell them you want to cancel, give them the reason as "taking a stand against rising text messaging costs" or something like that, and ask for the corporate mailing address and a manager. This last part is important. While there's upward of 1k call center employees per call center (10-13 call centers), there are only 25-50 floor managers. By letting one of them know this they'll realize that in a short time they're getting alot of cancellations over SMS pricing.
If enough people do this they *will* re-evaluate their SMS pricing and policy. They had somewhere in the vincinity of 11-12m customers and are one of the smaller cell phone companies, they take Churn (customer turnover) seriously, also they were one of the few that used to include 50 free incoming texts per month (long since gone).