What Carriers Don't Want You To Know About Texting 570
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."
Um what? (Score:4, Interesting)
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.
I'm in Japan for six months... (Score:5, Interesting)
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!
Re:Goodness gracious me (Score:4, Interesting)
It is less than 160 bytes! (Score:3, Interesting)
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)
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)
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.
Re:This makes me dream... (Score:5, Interesting)
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)
Re:This makes me dream... (Score:4, Interesting)
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.
Re:This makes me dream... (Score:5, Interesting)
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!
Re:It is less than 160 bytes! (Score:4, Interesting)
Competition? Never Happen! (Score:3, Interesting)
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)
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.
Re:Same old arguments (Score:3, Interesting)
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)
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.
The reason this is a boring topic (Score:3, Interesting)
Re:This makes me dream... (Score:1, Interesting)
"I'm not sure of many, if any, other countries where this happens."
Canada.
data/voice usage balancing (Score:5, Interesting)
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)
Re:This makes me dream... (Score:3, Interesting)
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)
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.
Obligatory (in)Famous Quote: (Score:5, Interesting)
"Texting is the closest thing to pure profit ever invented" - Sir Chris Gent, founder of Vodafone.
Re:INCORRECT Correlation (Score:4, Interesting)
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)
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)
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)
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)
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.
Re:This makes me dream... (Score:4, Interesting)
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.
Re:This makes me dream... (Score:3, Interesting)
I Work For Sprint (Score:1, Interesting)
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)
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)
Re:This makes me dream... (Score:1, Interesting)
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.
Re:INCORRECT Correlation (Score:1, Interesting)
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)
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.
Re:INCORRECT Correlation (Score:1, Interesting)
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)
"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)
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).