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."
Some data 4 U (Score:4, Informative)
I was recently reading about the whole George Vaccaro [blogspot.com] 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.
Whoops, sorry (Score:4, Informative)
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.
Re:Whoops, sorry (Score:4, Interesting)
Re: (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
Re: (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 hav
Re:Channel miles (Score:5, Funny)
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 ;)
Re:Channel miles (Score:4, Insightful)
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.
Re:Channel miles (Score:4, Funny)
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.
So, how is work at Verizon these days?
Basic economics... (Score:4, Insightful)
the vendor changes according to how *useful* the service is
Or, more accurately they charge what they can get away with to maximize profits before people start shifting to less suitable substitutes. In this case things like voice mail(or even old style answering machines), actual email, or just don't text.
Texting just shows that the cell phone service market is not very competitive.
Or, at least at the moment, that people don't choose their service providers on the basis of per-text charges. As others have noted, those that text a lot generally go for unlimited plans.
I had a choice of a whole two of the cell companies given my location(verizon and alltel), and I'm old-gen, I don't text or surf. I bought a phone on the basis of reception, battery life, and bluetooth. The bluetooth headset helps reception because there's only a few good reception spots in my house/area. Being able to stash the phone in one helps. I have the second cheapest national plan they offer(I do travel semi-frequently). I don't even remember what the fees for data or text messages are - because I don't do that. Though I am considering getting a data plan now - my cell can act as a modem using bluetooth with my new computer. Then again, I have high speed internet at home through DSL that'd kick the data rate I could push through my one to two bar signal zone, have high speed internet at work, and most hotels/motels today offer free internet. The biggest area for me to use my computer would be in the airports - and I'm not in them enough. Still cheaper than the $10-20 my local hub wants for the hour or two layover I generally have, but I just do without at the moment. I looked at it mostly in the 'wouldn't this be neat' fashion.
Back on text messaging - you could say the same thing for long distance rates, pay phones, per minute charge rates for going over your monthly minutes.
In fact, it seems that phone companies like doing the same thing as banks - offer plans/accounts with decent terms and rates - yet charge fees/penalties like crazy for any deviations.
Sigh (Score:5, Funny)
517,602,528. There must be something infectious about Verizon and getting your decimal points in the wrong place.
Re:Some data 4 U (Score:5, Funny)
Why do people put up with this?
Because we can.
It's really a good thing! (Score:5, Informative)
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!
Re: (Score:3, Insightful)
Okay, now remember that you need a cell tower in every area you want coverage. Now remember that you need to wire up all of those cell towers. Comparing the cost of a single T1 to that is insane.
Re:Some data 4 U (Score:5, Informative)
Okay, now remember that you need a cell tower in every area you want coverage. Now remember that you need to wire up all of those cell towers. Comparing the cost of a single T1 to that is insane.
Not really - most of the towers are not owned by the cell company but by one of a couple of twoer companies who lease antenna space; so you'd need to add in lease costs.
I'd argue they are fixed costs rather than variable so they should not be considered when calculating the cost of sending the n+1 txt msg; and while the bandwidth cost is probably more of a fixed cost as well I'd say that since it limits carrying capacity more than the antenna (as far as I know)it's not a bad estimation of the marginal cost associated with a txt msg or other data transfer.
Re:Some data 4 U (Score:5, Insightful)
There should be a class action suit over this.
Why? No-one is forced to spend their money on text messages. Truth is the networks charge what they do because people are willing to pay it. People simply don't care about the bytes to dollar/euro/pound; ratio. For example, the last four messages I received from my brother contained a total of about 25 characters, 8 of which were exclamation marks.
If usage drops, then prices will follow, but that doesn't look like happening soon.
Re:Some data 4 U (Score:5, Insightful)
No-one is forced to spend their money on text messages.
Not 100% true. If you have Cingular/ATT disable text messaging on your phone, they don't promise that you won't receive any text messages. And I'm not talking about ATT's own free text-spam, but rather texts from people you don't know that you still get charged for. I wouldn't be surprised if other carriers do that too.
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: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:Some data 4 U (Score:5, Interesting)
Re:Some data 4 U (Score:5, Interesting)
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:There's a good reason we pay for incoming calls (Score:4, Informative)
Wrong!
I live in Ukraine where ALL incoming calls are free by law. So cell companies HAVE to compete on outgoing call rates. And the do compete - I see a lot of advertisements like: "0.1 cent for all calls!".
Also, the stupid '300 minute a month' plans are also US specific. Most plans here are of debit 'pay-as-you-go' type. For example, I pay about $20 a _year_ because I just don't talk much other the phone.
Re: (Score:3, Informative)
I'm on tmobile prepaid. At one point I thought the same thing as you, but earlier this year I had some problems with text messages and found out that (at least for prepaid) you CAN disable text messages. Of course, I just spent 15 minutes looking for where on the website it was and I can't find it (one of their phone reps walked me through the process). But it's there in that mess, somewhere. It was a bit primitive, but you could se
Re:Some data 4 U (Score:5, Insightful)
I never understood why you would have to pay to receive a text-message. I'm from the Netherlands and here only the one who sends a message has to pay, receiving is free. As far as I know it is like that in every courty in Europe (but I didn't check them all). Where you come from, do you have to pay to get called too? Because if you don't, the whole thing doesn't make sense - a one second call has way more data-transfer than a 100-character text-message.
Re: (Score:3, Informative)
Unless you have an unlimited incoming plan that starts at $25+ with Telus (don't know for the other carriers) Your paying for incoming calls.
Land line calls incoming and outgoing are free as long as the outgoing call isn't long distance so that's how they justify it.
Re: (Score:3, Insightful)
In Europe (and the rest of the World) Mobiles have separate number ranges, So you can tell you are calling a mobile by the number, and so you (the caller) can be charged extra ...
In the USA someone made the odd decision to scatter the mobiles within the normal geographical number ranges, and so the telcos cannot charge extra to call them (but someone has to pay for the "additional" cost) so the person called pays
This has been extended to SMS messages even though they could be a standard cost! SMS = Mobile?
B
Re:Some data 4 U (Score:4, Insightful)
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:Some data 4 U (Score:5, Funny)
you get charged to *receive* sms messages????
wow.
they'll be charging to receive phone calls next.
Re: (Score:3, Insightful)
Why should you have to pay for incoming texts? No one charges you for letters you receive (well, not unless the person sending it is really cheap). So why should texts be any different (especially since you're already paying the carrier a large sum to remain connected to their network)?
Re:Some data 4 U (Score:5, Informative)
Re:Some data 4 U (Score:5, Informative)
What was the justification for such a system? Surely it must be an entirely unintended side effect of some other short-sighted but at least sane idea?
In the US, there is are no dedicated prefixes for mobiles. A 415 number could be a landline in San Francisco, or it could be a mobile over there, or even a mobile from that area currently in Zimbabwe. The sending party can't possibly know this and might expect (when also in SF) to pay as little as zero, when also in SF and placing a free local call. Therefore, the receiving party pays, having full knowledge about the phone type (landline/cellular) and its location.
In Europe this is quite different: mobiles have dedicated prefixes. The sending party now knows to be calling a mobile and to get charged differently. Only when the receiving party is roaming (e.g. in Zimbabwe) it pays for receiving a call - the sending party pays up to the border.
These differences between Europe and the US have always existed for voice calls and simply continued to be when it comes to SMS.
With most European providers you don't even pay for receiving text messages even when roaming, precisely because there is no way to reject them.
(I know this why? Well, I have a landline number here in Holland, a mobile number here in Holland and one for the UK, as well as VOIP-redirected landline leases in San Francisco and London. And I've previously had mobile numbers in the US, Uganda and South Africa.)
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: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:4, Informative)
Have you ever sent a text message, then found out that it didn't get to the recipient until the next day? For crying out loud, if you're going to charge an arm and a leg for me to send a message, and again for someone else to receive it, all in the name of "convenience", then just make sure it gets there within a minute or two!
Re: (Score:3, Insightful)
Re:Mod down (Score:4, Insightful)
This article isn't about Europe and the rest of the world. But thanks for proving the point of the article and my post.
Re: (Score:3, Insightful)
I am having a hard time seeing who the class is or what their injury might be. You need a few more facts for price-fixing, and otherwise there is no cognizible injury in charging what the market will bear.
Re: (Score:3, Insightful)
Re:Some data 4 U (Score:5, Funny)
Not to mention that their text messaging packages are much lower per message. Verizon's cheapest package (that they don't advertise) is $0.002 per message.
Is that 0.002 cents or 0.002 dollars?
Re: (Score:3, Funny)
Re:Some data 4 U (Score:5, Insightful)
If you don't think text messages are worth 15 or 20 cents each, then don't use them. (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.)
I don't mind that the market will bear such high prices; what I mind is that there seems to be no competition on the part of the cell companies. Why would the price of SMS go UP when the cost of everything else related to cellphones has gone down? Compared to a few years ago, you can get more minutes, more features, better phones, etc. for the same or better prices... except SMS. Hell, I have unlimited web browsing on my cellphone, and it's $6 a month; unlimited SMS is $15 a month.
Re:Some data 4 U (Score:5, Informative)
No they will not. AT&T will NOT disable incoming texts.
you can easily bankrupt an ass-hat by having thousands of SMS messages sent via the net to them. AT&T will NOT block the incoming they claim they dont have the ability.
and yes this has been tested, I saw it happen to a business colleague. He kind of deserved it and the only solution was to have AT&T add a unlimited messaging plan to his phone for $29.95 a month. Otherwise he was having an extra $280.00 a month on his phone for the incoming spam and prank messages that was being sent by several hundred computers from all over the planet.
Re:Some data 4 U (Score:5, Informative)
Yes they will. They've done it for me and apparently for some other posters. It seems not to be a default configuration and you may have to shuffle through some folks until someone has a clue, but it can be done.
Keep trying.
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: (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, Insightful)
I don't get why US people put up with the receiver of a call or txt paying. It's absurd to me. Does the receiver of a letter pay? No. So why does the receiver of a call or txt pay??
Re: (Score:3, Informative)
I don't get why US people put up with the receiver of a call or txt paying. It's absurd to me. Does the receiver of a letter pay? No. So why does the receiver of a call or txt pay??
Two reasons, both of them quite sensible.
The first is that the US had significant cell phone use back when they were really expensive. If it's 1980 and I'm calling Mr. Hotshot on his carphone at a buck-fifty a minute, who should pay? Me, or Mr. Hotshot?
The second is that I don't need to know whether I'm calling a cell phone or not. It costs me the same either way. No need to memorize which numbers are mobile and which aren't. If I know what kind of phone I'm using, I know what my rate structure is. The reci
Re: (Score:3, Insightful)
The first is that the US had significant cell phone use back when they were really expensive. If it's 1980 and I'm calling Mr. Hotshot on his carphone at a buck-fifty a minute, who should pay? Me, or Mr. Hotshot?
You. Otherwise get Mr. Hotshot to call you, do a reverse-charges call, or just don't call his damn carphone so much. But, you get to choose.
The second is that I don't need to know whether I'm calling a cell phone or not. It costs me the same either way. No need to memorize which numbers are mobile
Re: (Score:3, Insightful)
anyway, wtf are you talking about here? It *IS* 'called party pays'... that's the whole point. I don't understand you. The cellphone user pays a regular fee for their service, *AND* to receive calls and txts.
Try thinking, please. If it was "called party pays", that would mean that if I had a landline phone and you called me from a cellphone, I would pay the airtime fees.
Re: (Score:3, Informative)
Re:Some data 4 U (Score:4, Insightful)
I was recently reading about the whole George Vaccaro [blogspot.com] 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.
Why? The cost to produce a product has no bearing on price; it only determines wether or not a product will be produced based on teh demand - driven price.
The carriers should set prices to maximize their profits; which they try to do through offering teired and fixed rate plans. Given the marginal cost of extra traffic is virtually nil, the higher rates plans and flat rate bundles are probably mostly profit; by offering low usage plans you get the people who wouldn't own a cell phone if the paid $99/month while the all - in $99 captures people who are willing to pay alittle more than the highest capped plan per month to eliminate the chane they will go over their plan usage and get hit with a large bill every now and then.
Profit maximization, as long as their isn't collusion, is not illegal.
Re: (Score:3, Insightful)
Is this really an issue? (Score:5, Insightful)
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.
Re:Is this really an issue? (Score:5, Insightful)
If text messaging were really this expensive, then the unlimited plans would be like $500 per month instead of $5-15 per month.
Re: (Score:3, Informative)
actually, with the new plan from AT&T with the 3G IPhone, the price for unlimited texting is $20/month. See here [att.com].
Re: (Score:3, Funny)
I wonder how many MMS messages you can send?
Re: (Score:3, Insightful)
Texting vs. Hubble (Score:5, Interesting)
Re:Texting vs. Hubble (Score:5, Informative)
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.
From the physorg article [physorg.com]:
Dr Bannister estimated the cost of the data from Hubble could vary between £8.85 and £85 per MB- much cheaper than the £374.49 per MB cost of transmitting one MB of text.
Green Text! (Score:5, Insightful)
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?
Re:Green Text! (Score:4, Insightful)
I still find it fascinating that I have an unlimited data plan with minutes that roll-over, and since talking mobile to mobile on people that have the same carrier (which happens to be the majority of the people talk to regularly), I've got minutes to burn. I can call them, or log in to a web-email app and email them, for my monthly fee. But sending a text message is so taxing on the providers system, apparently, that they need to charge extra for it.
Calculate based on Asian figures (Score:4, Insightful)
Re: (Score:3, Informative)
Re:Calculate based on Asian figures (Score:5, Insightful)
"Sue a company because I don't like the pricing on its voluntary plan?"
No, sue them all because they are in breach of competition laws by clearly using price fixing as a method of hiking profits above what fair competition would yield.
Re: (Score:3, Insightful)
And because they don't allow you to opt-out of receiving publicity text messages. Next thing you know, they are posing as spam and send you messages just to charge you.
Get unlimited texting (Score:3, Funny)
free (Score:5, Interesting)
Re:free (Score:5, Funny)
Yes, but....dude, this is *Sprint* you're talking about.
It's sort of like saying "I asked all these girls to go to bed with me and every one did!", which sounds impressive - until we find out that the only ones you asked were terminally-ill great-grandmothers.
Something should be done (Score:4, Informative)
In the UK, the Telecom Regulator OFCOM recently (as in a few days ago) started pushing our mobile operators to reduce the cost of sending and receiving text messages while abroad, where the price was often around 30p (60c!) or more just to send one.
I hope this sets a precedent and they start to clamp down on the cost of sending regular, local messages as well.
Same as gas... (Score:5, Insightful)
Pretty much the same as gas...
Re: (Score:3, Insightful)
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!
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).
Re:Same as gas... (Score:5, Funny)
I wish there was a "-1, American complaining he's paying too much for fuel".
(PROTIP: The average cost of petrol in the UK is just under $9 per US gallon.)
In case you didn't know, it does cost about $24k (Score:4, Funny)
to download an mp3 ... if the RIAA smells you.
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.)
Re: (Score:3, Insightful)
Efficient markets require perfect knowledge. Free markets require a relative lack of regulation.
If people actually cared, prices would go down, the information is available. People don't care.
Re:You know what the problem is? Capitalism. (Score:5, Funny)
Free markets require perfect knowledge. And without that, the invisible hand doesn't work.
I suppose getting everyone to acquire perfect knowledge is going to be pretty tough. So my interpretation of your post is that as an anarchist you propose that somebody should regulate the market. Is that right? I couldn't agree more.
We will need some of us anarchists to join hands and form a regulatory board or such. Naturally the board would not be able to regulate anything unless it can regulate itself and so we will need some sort of hierarchy. Also, the board would need a mandate to regulate anything at all, let alone the market. So we could maybe try to get other people (who are not in the board) to consent to our plan. We could either buy guns and make them agree or we could ask them to pick their favorite among a bunch of us anarchist that are going to be the members of the regulatory body. Either way, it is going to work out easily.
Every sunday we could burn books to emphasize that we are anarchists, so that no one confuses our regulatory board with dictatorship or democracy (depending on how we got the mandate). You know, symbolism and all that!
Re: (Score:3, Insightful)
Just to compare (Score:5, Informative)
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.
Obivously (Score:5, Funny)
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.
Basic economics (Score:5, Insightful)
Not when you have oligopolies (Score:5, Informative)
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.
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: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.
Simple fix (Score:4, Interesting)
Web via txt? (Score:5, Funny)
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.
Monopoly? Oligopoly? (Score:4, Insightful)
To put it bluntly, your mobile communications' market isn't free. The companies serving that market don't feel the need to compete with each other in any way perhaps besides area coverage. Their clients' business is always a given as they are unable take it elsewhere (no alternatives) and are happily shelving away more and more money to get the exact same service.
So, if they have a captive audience and there is no other actor in the stage, what else forces them to put on whatever show they wish?
Re:Monopoly? Oligopoly? (Score:5, Insightful)
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.
Re: (Score:3, Informative)
First of all, it's anything but cheap. Phone networks are pricy. It's not something where you invest your 10k and start a business, which is quite possible in other areas. Think more around 100m for a small size start.
Second, you need contracts with other networks. First of all, because some countries don't like the idea of setting up phone towers all over the place, so you don't get the OK from the government to build one. Then your customers need to be able to call other networks, or you won't have many.
Mobile Monopolies (Score:5, Insightful)
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.
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.
Good gravy! (Score:5, Funny)
Thank god no one texts me duplicate Slashdot stories!
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.
What the Market will Bear (Score:3, Insightful)
The pricing of datacom and telecom services has not had anything to do with the cost of the service since the original AT&T monopoly was broken. Pricing is determined by the market, not by the cost of providing the service. This is because most of the cost is fixed, while the revenue is highly usage-dependent.
From the carrier perspective, the only thing that matters is revenue. The new product (whatever it is this year) will always be marketed at premium price. The old products are priced to maximize revenue. If they can gain revenue by lowering the price and selling more units at that lower price, they do. If they can gain revenue by increasing price and selling fewer units, they do that.
Voice minutes have become cheaper over time largely because of competition. SMS messages are currently fashionable, and so carry a premium price. As soon as text messaging starts losing fashion appeal, some carrier will start selling it for lower pricing, or even giving it away, to get subscription revenue. Abusing the customers with ludicrous per-message pricing will make that day come sooner rather than later.
Try this on... (Score:5, Informative)
Texting prices in .dk: ~5 cents and falling. Yay free market economy! The US should try it one day.
Re:I've never text'd (Score:5, Funny)
Re:I've never text'd (Score:4, Insightful)
My father's 64, I'm 37, and he and I text each other several times per day. Just because you're an adult, doesn't mean you have to be a Luddite.
Re: (Score:3, Insightful)
A winner! (Score:3, Informative)
I'm really surprised that more people haven't worked this out.
I have unlimited Internet, so I just log in to Google Talk and anyone can message me that way.
For messaging with the spouse, I use BlackBerry Messenger, because it's reliable and works even if she forgets to log in.