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Cellphones Communications

What Carriers Don't Want You To Know About Texting 570

Posted by timothy
from the what-the-market-will-bear dept.
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."
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What Carriers Don't Want You To Know About Texting

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  • Um what? (Score:4, Interesting)

    by imroy (755) <imroykun@gmail.com> on Sunday December 28, 2008 @09:34AM (#26248789) Homepage Journal

    The truth is that text messages are 'stowaways' inside the control channel â" bandwidth that is there whether it is used for texting or not â" and 160 bytes per message is a tiny amount of data to store-and-forward over tower-to-tower landlines.

    From what I understand, the problem with SMS's sent on the GSM standard is that it is in the control channel - as the anonymous submitter stated. But there's only one control channel for each cell versus many data (voice, etc) channels, and it has a lot less bandwidth than even one data channel. It was only ever meant to handle connecting calls, phones moving from one cell to another, etc. Administrative stuff. SMS was never meant as a proper way to move lots of messages. But it's now a major form of communication and it's using a channel (the control channel) that is very limited.

    When "text usage goes up", I'm guessing the only thing the carriers can do is to install more cells in order to get more control channels. But surely there's a limit to how many cells can co-exist in a given area. But everyone's moving to various "3G" networks and AFAIK they have proper means to send messages, photos, videos, etc. The anonymous submitter is still an idiot though.

  • by Anonymous Coward on Sunday December 28, 2008 @09:42AM (#26248831)

    In Japan there's this magic concept. The $30 plan actually costs $30! Go figure! A brand new cell phone is also free with no contact. And you can watch TV for free on your cellphone. But, don't let the Americans know or they'll want decent service too! ...oops!

  • by CrackedButter (646746) on Sunday December 28, 2008 @09:43AM (#26248837) Homepage Journal
    Only outside the US as far as I know. Everywhere else uses sugar, not that that makes any difference since I don't drink fizzy pop.
  • by Terje Mathisen (128806) on Sunday December 28, 2008 @09:56AM (#26248913)

    The SMS channel uses 7-bit ascii, so those 160 characters are only using 140 bytes.

    Charging for receiving messages, which some US carriers seem to do, is just adding insult to injury.

    Terje

  • Re:Um what? (Score:4, Interesting)

    by betterunixthanunix (980855) on Sunday December 28, 2008 @09:59AM (#26248925)
    Yes, the control channel is bandwidth limited, but a text message is only 160 bytes. The control channel has a transmission rate of 270kbps. Do the math; literally hundreds of text messages per second could be sent over the air via a single cell.

    It is almost always the case that voice channel usage and text message usage increase in proportion with each other. A cell can handle far more simultaneous text messages than voice calls, however, so new cells would need to be installed to take care of the voice channels first, and so as the NY Times article points out, it literally costs the cell provider nothing to provide text messaging.
  • Re:Correlation (Score:4, Interesting)

    by Nazlfrag (1035012) on Sunday December 28, 2008 @10:09AM (#26248963) Journal

    You were once those feckless youth, and I'm sure believed what you had to say was of utmost importance. We have been conned into thinking that text messages actually cost the network operators anything, but while this is to do with the critical faculties of the general public it isn't about those teenagers utilising our new social conference ground. They are wiser than you assume.

  • by arashi no garou (699761) on Sunday December 28, 2008 @10:16AM (#26248999)

    I'm still looking forward to the day when I'm only charged for what I send, not what I receive. I have two phones on my account, one for me and one for my fiancee, and before I added a texting package any time one of us texted the other my account was charged twice. Once for the sent message, again when it was received. I honestly believe the cell companies do this to force you into a texting package.

  • Re:Um what? (Score:5, Interesting)

    by betterunixthanunix (980855) on Sunday December 28, 2008 @10:32AM (#26249073)
    And voice traffic increases in such situations as well (perhaps not as much for your stadium, but that is really an edge case). Go to your local urban intercity rail station; you'll see a lot of people talking on their phones. You'll also see a lot of people typing text messages. If you had the equipment, you would also see that the station is covered by multiple towers from multiple carriers, and that the number of people simultaneously sending texts, as opposed to typing the text and preparing to send it, does not exceed a couple hundred per second. It is very unlikely that the limit on text bandwidth would be reached before the limit on voice bandwidth; possible, sure, but not very likely.
  • by Anonymous Coward on Sunday December 28, 2008 @10:39AM (#26249099)

    I still think it's pretty funny that Americans have to pay to send and receive texts.

    I'm not sure of many, if any, other countries where this happens.

  • by mprindle (198799) * on Sunday December 28, 2008 @10:39AM (#26249103)

    Just recently I had to battle with an AT&T rep to get 18 text messages on my phone and 18 on my wifes phone credited back. They came from an unknown source and they all had two letters in them that was pointless. After talking to the rep for 10 mins or so he finally consented and gave us credit for them. I forgot to mention that I don't have a texting plan so each message received, that I didn't want or ask for, was going to cost me .35 each!

  • by Paradigm_Complex (968558) on Sunday December 28, 2008 @10:39AM (#26249105)
    In this case I believe "byte" is revalued at 7-bits. It's still 160 bytes, just now it's 1120 bits instead of 1280 bits.
  • by reallocate (142797) on Sunday December 28, 2008 @10:40AM (#26249111)

    This makes me dream of the day when there is real competition in the wireless industry...

    Keep dreaming. We won't see wireless competition because people don't really want it. What they want are cheap phones and phones that work anywhere. They get the latter as a result of market domination by a few corportions, and are willing to accept the hit on the former.

    People like their toys and tools to be standardized. Look at the personal computer market. For everyone around here who rants about the evils of Microsoft, there are a dozen others who don't care because the dominance of Windows and one particular kind of hardware platform plays to their advantage.

    The world is just one village.

  • Re:Correlation (Score:5, Interesting)

    by mollymoo (202721) on Sunday December 28, 2008 @10:43AM (#26249137) Journal

    Better off financially? Almost certainly, particularly as text conversations are frequently longer than one message each way. But I don't think that's the point. Calls require an instant response and a lot of attention an you can't really multicast voice as effectively. Setting up even a 3-way call takes longer than writing a short text ("Pub tonight?") and sending it to half a dozen friends. Texts, like emails, can be responded to at your leisure. I prefer to receive texts than voice calls for that reason. A-la-carte texts can be absurdly expensive, but packages (available with many hundreds of texts per month if you're a heavy user) will hardly break the bank.

    The bandwidth comment in TFS is curious - the bandwidth for voice is also there whether you use it or not as well. Mobile voice and landline networks work that way too - mostly fixed infrastructure costs for the operators, but a pay-per-use model for the consumer. It's nothing new. Increasingly commonly, broadband works like that as well.

  • by baffled (1034554) on Sunday December 28, 2008 @10:48AM (#26249165)

    It costs phone companies a hell of a lot more to send 1000 texts than it does for a 3G user to download a 160kb image.

    It's true for pretty much every business everywhere that if you do things in incredibly tiny properties, you're going to be charged through the roof.

    Yes, which explains why my x86 processor crunching 3 billion incredibly tiny instructions per second costs me millions of dollars to operate, and my gigabit ethernet lan sending millions of incredibly tiny data packets per second is just as costly.

    How on earth did you get modded +4 insightful.

  • Re:Correlation (Score:5, Interesting)

    by WDot (1286728) on Sunday December 28, 2008 @10:59AM (#26249233)
    I disagree. To get the equivalent of a text message in a short call, I would have to say "My plane landed safely in Phoenix, I love you, bye," and then hang up before they have a chance to respond. I use phone calls for conversations, even short ones. However, if I can fit the entire conversation into 160 characters, I use a text message instead.

    I, like almost everyone else on Slashdot, think that text message rates are exorbitant, but I have no room to talk since I signed up for a plan. Yes, I'm a "feckless youth" like conureman says, but I pay out of my own pocket for my plan. I justify it to myself by saying that I'm paying for convenience, and I am.
  • by pooh666 (624584) on Sunday December 28, 2008 @11:02AM (#26249253)
    How much would it cost you to send a text message without using any of their networks? I know that is the point, but the issue is that monopolies are ok now, when we have been told that the U.S. government will protect us from such bad things. I have no idea what the point of the AT&T break up was, maybe someone's wife cheated or didn't fix a race or something. This is the age old story of the rich lining the pockets of the rich and focusing on one related issue like this does little good.
  • by Anonymous Coward on Sunday December 28, 2008 @11:05AM (#26249273)

    "I'm not sure of many, if any, other countries where this happens."

    Canada.

  • by firewood (41230) on Sunday December 28, 2008 @11:22AM (#26249359)

    as long as it is proportional to voice usage

    That's the reason for the pricing model. SMS has to be priced high enough to make sure its use doesn't grow faster than voice.

    The telcos want to balance the profit they make from the use of both channels, voice and signaling, while being backward compatible and not having the expense of updating the protocol to use the data channel(s).

  • Re:Correlation (Score:5, Interesting)

    by YttriumOxide (837412) <yttriumox@gma i l .com> on Sunday December 28, 2008 @11:41AM (#26249467) Homepage Journal
    I use text a lot for work. I live in Germany, but deal with people from all over Europe for work. Often, I may need to give or receive an address, and since I don't speak every European language, addresses are a complete pain if spoken to me on the phone or left in a voicemail. With text, I (or others) can just show the address to a taxi driver and there's no confusion. (example: The address of the Holiday Inn in Brno, Czech Republic is "Krízkovského 20" (carons over the r and z - can't show them on Slashdot) - if someone told me that by voice, I'd be lost - put it in a text, and it's dead easy)
  • by arashi no garou (699761) on Sunday December 28, 2008 @11:46AM (#26249493)

    My fiancee is getting a new phone as a late Christmas gift (only late because of a delay in shipping) which has AOL IM built in, and my BlackBerry will also do IM. Since unlimited internet is only $15/month for her phone and our group unlimited text package is $30/month, I will most likely drop the text package when her phone arrives. I prefer IM to SMS anyway.

  • Re:Correlation (Score:3, Interesting)

    by gartogg (317481) <[sdaman] [at] [mindspring.om.tld]> on Sunday December 28, 2008 @11:55AM (#26249557) Homepage Journal

    Wrong. It costs money to receive text messages, and you pay for the minutes on the phone whether you are calling, or being called.

    I don't understand why, but that is the way it works here. We should not live in a place where capitalism is understood as see how you can screw people by making it impossible to do anything about the current system, and neutering the FTC and Justice department by upward revisions of the concentration needed for industries to be considered monopolistic, or ogliopolistic. Also, where they have skew the legal stem so that only the rich can afford to use it to redress grievances, and obfuscate the law so that the average citizen cannot tell whether what companies do is legal, and then misinform them by having industry shills write the textbooks used in classrooms to teach economics and social studies.

  • by lobiusmoop (305328) on Sunday December 28, 2008 @12:10PM (#26249643) Homepage

    "Texting is the closest thing to pure profit ever invented" - Sir Chris Gent, founder of Vodafone.

  • by Lachlan Hunt (1021263) on Sunday December 28, 2008 @12:43PM (#26249885) Homepage

    While there may be some price plans that allow for free incoming calls or free incoming text messages, the majority of US price plans charge airtime for incoming calls and charge the same for incoming text messages as outgoing - currently 20 cents per message.

    WTF? Does that mean the US telcos are double dipping?!

    In Australia, depending on the plan, text messages generally cost around 10 to 20 cents to send. The receiver never pays to receive an ordinary call or sms. (There are exeptions for premium rate services though).

  • Re:Correlation (Score:4, Interesting)

    by lysergic.acid (845423) on Sunday December 28, 2008 @12:45PM (#26249897) Homepage

    no, voice and landlines are different. this is basically like if you were shipping a package to someone and you "piggybacked" a message onto the delivery by writing a note on the actual box. the surface area of the box is going to be there whether you write that extra message on it or not, and it doesn't cost FedEx or USPS anything extra to deliver a box with writing on it. as long as you're paying for the box/shipping, you really shouldn't have to pay for the text you write on the package.

    the article is talking about actual bandwidth usage, not the bandwidth potential of the existing infrastructure. yes, the infrastructure is going to be there whether you use it or not, but it's there because of all the voice traffic we send/receive. consumers are charged minutely or per-message rates because, presumably, these activities increase network usage. but sending SMS doesn't increase network usage as it's recycled bandwidth.

    but even if SMS activity used more network resources, it should not cost anywhere near what we're being charged for them today. it's only because the telecoms have a monopoly/oligopoly that they're able to charge these outrageous rates. frankly, it would be more efficient if simply build a national open wireless infrastructure. text messages could be sent/received for free using open standards like e-mail or XMPP. voice calls could be made independent of carriers/telecoms using VoIP. this would also foster innovation and technological progress as people would be free to develop new applications/technologies using the wireless network.

  • Re:huh? (Score:3, Interesting)

    by Yosho (135835) on Sunday December 28, 2008 @01:11PM (#26250099) Homepage

    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.

    I think what the author meant is that there's no competition until the companies are actually competing. If any one of them lowered their texting prices, the others would have to lower theirs to match or else they'd lose business. This would eventually all of them lowering their prices, keeping the same customers, and making less profit than before. They all realize that as long as they all keep their prices high, they'll all be raking in the profit.

    If you've got any local cell providers in your area, take a look at them. They've probably got something like a $40/month plan that includes unlimited minutes and text messages. Of course, they probably don't have a lot of business because you'll lose coverage as soon as you go outside of the local area.

  • Re:huh? (Score:3, Interesting)

    by buddyglass (925859) on Sunday December 28, 2008 @01:19PM (#26250173)

    I think what the author meant is that there's no competition until the companies are actually competing. If any one of them lowered their texting prices, the others would have to lower theirs to match or else they'd lose business. This would eventually all of them lowering their prices, keeping the same customers, and making less profit than before.

    Assuming there's not explicit collusion and price-fixing going on, the four carriers are competing. Your analysis of what would happen if a particular carrier offered unlimited texting, if true, just suggests there's no advantage to a carrier offering that price structure. If that's the case, then I don't fault them for not offering it.

  • Re:Correlation (Score:3, Interesting)

    by nicolaiplum (169077) on Sunday December 28, 2008 @01:47PM (#26250409)

    In some parts of the world, notably the North American continent, one cannot expect SMS between carriers to work properly; there are many missing routes, including where there is a route from carrier A to carrier B but not from B to A so you can't get a reply to your SMS. Also even when it works it can be very slow, transit times of hours are within my experience.
    It's not like Europe where SMS can be expected to work so well that it effectively always works and is fast.
    Of course the North American telcos still charge you for your SMS when it disappears into hyperspace because their network isn't configured properly, but I'm sure you all expected that.

  • by horatio (127595) on Sunday December 28, 2008 @02:15PM (#26250649)

    That's what pisses me off. Both Sprint and AT&T have both told me that there is nothing I can do about unsolicited text messages (except to add texting specifically), that I will be charged for them. Sprint, at least, has a bit buried on their website which most of the reps don't know about where you can block specific numbers - but last I checked it was limited to 50 numbers - no way to block all text messages. Alternatively, like you, we can call every month and argue with the clowns.

  • by jandrese (485) <kensama@vt.edu> on Sunday December 28, 2008 @02:40PM (#26250805) Homepage Journal
    To be fair, the counterpoint to this is the Euro system where you basically pay twice as much to place the calls. In the US system the sender and the receiver split the cost of the call, in the Euro system the sender pays all of it. There's a reason caller-id is standard on all US cell plans though, since they have to make the decision to take some charges if they accept the call.
  • I Work For Sprint (Score:1, Interesting)

    by Anonymous Coward on Sunday December 28, 2008 @03:23PM (#26251141)

    I take cancellation calls calls for Sprint. Business is good because Sprint customers have been dropping like flies for the last couple of years.

    I see it over and over and over. Someone gives a phone to their 15 year old, no one bothers to discuss a text plan and the first bill comes with several hundred dollars of text charges. Sometimes the customers calls me and threatens to cancel and we adjust all of the charges minus the cost of the text plan. But very often the consumer pays the bill because they don't know that the threat of canceling will get the charges adjusted. So that's hundreds of dollars of free money for the phone company. That's a shitty business model because in exchange for the free money they lose any goodwill they had with the customer. A couple of hundred dollars extracted from a customer who now hates you. And imagine the family fight between the 15 year old and her parents. I've heard them screaming at each other in the background while I take the cancellation call. I hear it all the time.

    The cellphone companies have been doing this for years. It's called overage, or from the carriers point of view, free money. In the early days of the cellphone business capacity on cell towers was precious, so overage charges were necessary. Now days the networks have huge excess capacity, but they still charge overage because it's part of their business model. It's just easy money off the suckers who don't watch their usage.

    The phone companies know that their onerous billing practices cause customers to hate them. But they are addicted to the ARPU (average revenue per unit). In Sprint's case, the company is broke, completely drained by it's failed buyout of Nextel. Now, with the economy tanking and their credit rating junk, Sprint can't borrow money. I think the CEO is a good man who would like to do the right thing and cap text charges at a reasonable price. But they have to have the money and they can't afford to cap these overage charges.

    Now is the time to write your congress critter about cellphone company billing practices. It's time to impose some common sense government regulation. As Wall Street and Bernie Madoff have shown, you can't always depend on business to do the right thing without regulation and oversight.

  • Re:Correlation (Score:2, Interesting)

    by stuffeh (1108283) on Sunday December 28, 2008 @05:55PM (#26252283)
    Talking in class? You're kidding right? What kind of a school did you go to where the teachers allowed you to talk to friends so freely during instruction from the teachers?

    Here in California, mobiles were banned in 1988 from schools because only drug dealers would have them at school. But back in 2002-2003, the law changed so that each school district now can dictate themselves on if mobiles should be or not. The best argument is ease of communication between child and parent about coordination for changes in plans for after school. I for one, would want to find out asap that mommy had to go "help out" the gardener and couldn't pick me up.

    But use during class obviously is restricted, usually. Thus sms is the most unobtrusive method of getting the message across to anyone, even the dumb ass two seats away who's paying you $1.15 a question for the test on the Krebs cycle.
  • Texting in Asia... (Score:2, Interesting)

    by One_Minute_Too_Late (1226718) on Sunday December 28, 2008 @06:07PM (#26252387)
    My parents, when they report back from Asia, always tell me that their text messages are included for no extra charge. They also say that the North American handsets are about 10 years behind the Asian models in terms of function and price.
  • by Anonymous Coward on Sunday December 28, 2008 @07:00PM (#26252771)

    This is exactly the behavior that can mitigate the situation. Consume more CSR time and wages than text messages bring in.

    Of course, if this is not done on a large scale, the phone companies will simply remove the extra-squeaky wheels and be better off for it.

  • by Anonymous Coward on Sunday December 28, 2008 @07:28PM (#26252977)

    Traditions are just a way to keep stupid unfair standards so they can benefit from it.

    The original AT&T Wireless, before they merged with Cingular, charged only for sending texts. And the original AT&T Wireless subscribers kept their plans under the new Cingular name. However, Cingular charges for both incoming and outgoing texts, and that's where AT&T Mobility LLC (the 2007 merge) stands today.

  • Re:Correlation (Score:3, Interesting)

    by Golddess (1361003) on Sunday December 28, 2008 @08:31PM (#26253421)
    As long as they are not disrupting others, I do not see the issue.

    It may not have been a cellphone, but back when I was in high school, I used to take out whatever novel I was reading at the time, and just read that for the duration of the class. And my teachers never bothered me about it. Why? Because I was not disrupting others. Because I got my work done regardless.
  • by Anonymous Coward on Sunday December 28, 2008 @09:10PM (#26253611)

    In the states, they don't have a 'mobile phone' area code like we do in Oz. If you buy your mobile phone in California, you have a California number.

    Therefore in the States, when you call someone's number you have no way of telling if it's a mobile or not. Therefore the extra cost goes to you, the mobile user.

    It's exactly like global roaming. You pay when people call you because they don't know they're triggering an overseas call.

  • Re:Correlation (Score:1, Interesting)

    by Anonymous Coward on Sunday December 28, 2008 @11:33PM (#26254433)

    "It's also much more convenient for the recipient: They might be in the middle of gaming, driving, talking or a meeting. An SMS can be unobtrusively checked when some free time becomes available. SMS is also known not to be urgent by the recipient, while a phone call can't be assumed to be possible to ignore for hours."

    what a bunch of bs. nobody says you have to answer you cell when it rings. nobody says you need to keep the ringer on when doing something 'important'. A voicemail message can convey more detail (as well as tone) than a text ever could. And as to a phone call cant be ignored for hours? Please. We all know people who you are lucky to get a reply back in the same *week*.

  • Re:Correlation (Score:3, Interesting)

    by WTF Chuck (1369665) on Monday December 29, 2008 @01:11AM (#26254945) Journal

    It's one thing to be a bored honor roll student reading a book, (been there, done that), it's quite another to be an average student chit-chatting away with your friends when you should be making an effort to learn.

    Your teachers probably never bothered you about it because your work got done, and you did well in the class. If you didn't do well in the class, they should have been all over your ass about it. It really confuses teachers when you ace an AP math course doing pretty much what you did, (OK, I admit, I did use that class to catch up on sleep from time to time as well).

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