If Text Messaging Is Too Expensive, Why Are More And More People Using It?
from the trumped-up-controversy dept
Earlier this week, the chairman of the U.S. Senate Judiciary Subcommittee on Antitrust, Competition Policy and Consumer Rights, Senator Herb Kohl, made a bunch of news for questioning why text message rates have become so high. He implies that because the number of national wireless carriers has shrunk from six to four thanks to mergers, that the four major carriers have too much market power. That sounds great, but is highly misleading -- as evidenced by a new report that notes that the number of text messages being sent is growing rapidly. If the price were such a huge problem, wouldn't that not be the case?Part of the problem is that the Senator seems to only be looking at the a la carte pricing for text messaging. However, these days, most folks who use text messaging on a regular basis have signed up for some sort of bulk texting plan, that allows them to send hundreds of messages for a set price. The a la carte text message pricing is really only for those who rarely, if ever, use text messaging. Furthermore, if the mobile operators really are constraining the market and push things too far by driving the price even higher, then there are many alternatives that will quickly show up. As we've discussed in the past, it's only a matter of time until other options for messaging become popular on phones, such as instant messaging clients -- which can provide service for free. Once again, it seems like the gov't is stepping in and complaining where there's no real problem.
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Filed Under: antitrust, herb kohl, text messaging
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Direction counts!
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Re: Direction counts!
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Re: Direction counts!
If I'm not paying for text messages, then I should have the option of simply turning it off. (Allowing for messages from the carrier, at their expense, would be acceptible as long as they do not send me upsell messages.)
So, the carriers charge me (either for a set number or even unlimited at a higher price than just voice, OR they charge me per message, AND they give you no easy way to block them all.
It's in their interest to keep things as they are. But the status quo is no quid pro quo.
Woadan
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agreed
It took a class action law suit to get the carriers to move in that regard. So my trust of the cellular telcos is low to say the least. I wonder if the Senator got these two issues confused as well.
Don't care much about the price of text messaging, I don't want it at all.
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Incoming and outgoing
Is this respect, it's similar to the idea of ISPs charging content providers for the connection to consumers.
It's like if the USPS charged the recipient of a letter for delivery in addition to requiring the sender to affix a stamp.
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Idiots?
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Re: Idiots?
Is that really the role of government?
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Re: Re: Idiots?
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Re: Re: Re: Idiots?
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Re: Re: Re: Idiots?
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Re: Idiots?
The price differences I've mentioned are based on the cafe mocha (largest size, whatever the hell it's called... venti, maybe?) I got today with extra vanilla and cinnamon that was 3.87 compared to the 1.99 plain coffee (sometimes with flavored creamers) offered at our local convenient stores.
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text message costs
Having unlimited text messages has saved me lots of money! I save my minutes and type quick messages
1) Running late - be there in 15
2) W/C later (Will call later)
3) Lost! @ 35th & Main call me -- this one is great for loud places. My friends & I keep the phone on buzz. They feel it, see it and go someplace to call and give directions.
Only when a text message is going to take long than 2 or 3 messages do I call someone.
4) Bored I can't believe this stupid meeting
5) Help date sucks! (i.e. call me with an excuse to leave)
6) Traffic - running late
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well..
in addition, for those who do go over their text limit, and do not realize it, the penalty is much more severe. with verizon i have gone over a few times when i am traveling in the US... phone bill jumps from 50 bucks a month to 100-150 pretty quickly
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Crazy???
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Re: Crazy???
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Re: Re: Crazy???
1,048,576/160 (bytes per SMS)*$.20=$1,310.72
I'd say that was excessive.
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And for #4, servers DO pay to connect to consumers. They have to pay for their bandwidth just like anyone else... The only way that simile would work is for users to have to pay per connection, which they don't. And this same reasoning would apply for incoming calls and outgoing calls.
Whatever, I love txt'ing. Keeps my business out of other people's ears and gives me a record of conversations.
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nothing
Come back and ring the alarm bell if and when he gets their responses and starts to try and get the subcommittee to do something about it. Though even then, it's quite a ways to actual legislation or pressure on the executive branch to take a look. But right now, it's just one guy on what might just be a fishing expedition for an issue to grab onto.
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it's just very convenient. not only that, but it's the only way some services work. My work also sends text to me instead of a disrupting phone call.
I would love to use SMS texting but I think that it's ridiculous to pay another cent per month when I already pay and extra $40 for unlimited data. SMS really should be included in that.
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Unholy Alliance?
If you're a telcom you want spammers...
they give you an excuse to randomly tax your customers.
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They either hit you up front, or after the fact. So they get their duckies either way.
They almost can't not offer text messages because people would vote with their wallet and feet and go to the carrier that does offer them.
I think Gartner reported that texting has increased fourfold in 5 years. Which came first, the chicken or the egg?
The real issue, Mike, is that texting uses the voice line, not data. And at least Verizon (but possibly the other carriers as well?) control the user interface on non-PDA/non-Smart phones, and you can't send a text without incurring the usage hit. So IM clients aren't necessarily the answer, at least not in all cases.
With Smartphones and PDA phones you can install an IM client on most (which the carrier desn't control), and which uses your data plan.
Then all you have to worry about is not going over the 5GB data usage limit.
Woadan
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Cos we have to?
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Re: Cos we have to?
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Re: Re: Cos we have to?
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Re: Re: Re: Cos we have to?
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Odd Pricing....
Oddly enough, I do have to pay an additional 15 dollars for 1500 txt messages a month. The Super-Dooper odd thing is that if I sign into MSN messenger on my phone the messages are considered text messages. I don't quite understand that...what is the difference between me sending a text message and watching a stream of pr0n on my phone? :)
Since I use my phone for business also it's a pretty easy decision. Do I try to save a couple bucks a month or just eat the extra cost to make sure my customers can call or txt me whenever they need to get in touch?
Free Market pricing works if there are numerous choices for service providers in the area that offer the same quality of service. Unfortunately for me, there are not.
It is similar to having only one ISP in your area.
You have two choices. You can pay the price they want you to pay, deal with the data limitations they want to enforce and put up with whatever polices they want to put in place or you can just not have internet access.
Do I think the gov. needs to step in and regulate the pricing? Not really. However, as a consumer I do appreciate them asking the same question I would like to ask because it can bring to light goofy quirks that get no attention when a regular Joe-Schmo like me asks.
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Not Priced Per Kilobyte
What the carriers are charging for is a service, not a "byte transmission". The price is ridiculous, and yet people still find it WELL worth the price for the benefit of instant, short, silent, inobtrusive communications with just about ANYBODY who owns a cell phone.
There is competition. From unlimied plans and bundles, from other carriers, and from IM services you can install on a phone or smartphone. You could call. You could find a PC and type a message. You could email. These are all close substitutes, and yet people choose to pay the going rates for SMS.
Your perspective depends on whether you think a company should be forced to charge their cost plus a small surcharge for a product, or whether they should be allowed to charge whatever a competitive market will support - aka, what the service is worth.
RE #11, Joe, "the reason more people use it is because it is more convenient than having a long phone conversation and cell companies are taking advantage of the situation." Yeah, damn them for building the network, running it, subsidizing your phone, connecting to the other carriers, and providing you with a service that you call "more convenient" than prior services...and then having the gall to charge you what it's worth to you instead of their basic cost.
RE #20, Woadan, "The real issue, Mike, is that texting uses the voice line, not data" Actually, Woadan, that's wrong. Texting uses the SS7 signaling system and the signaling interface between tower and cellphone, not voice channel or data channel. An IM client on the phone could be a patial substitute, but only to other people who use the same IM, and who are logged in - SMS has much broader reach.
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Re: Not Priced Per Kilobyte
The issue of compatibility is fairly moot when it comes to IM. Yahoo and MSN have by the far the biggest reach, and they are playing well with each other. AIM isn't. Even so, the apps are easy enough to install and configure, so there is no huge barrier. Plus, integrated IM apps will eventually make it to cell phones if there is enough interest.
The real issue is that the carriers, except for with PDA and Smart phones, control the OS and the interface to a large degree. And if they allow IM apps that use the data plan, they lose the SMS fees. (Though it would mean everyone would have to have a data plan, which some would not prefer perhaps.)
Doing so, however, would mean I get control over who can send me a message, and whether I even have the app up and running. SMS doesn't have that degree of granular control.
Woadan
Derek said: "Texting uses the SS7 signaling system and the signaling interface between tower and cellphone, not voice channel or data channel. An IM client on the phone could be a patial substitute, but only to other people who use the same IM, and who are logged in - SMS has much broader reach."
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Phones are now useless
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Re: Phones are now useless
yup, it is a "trespass of chattels", actionable under Tort law. Further, if the return address is bogus as is generally the case then the UCE (unsolicited commercial e/mail ( spam)) is also a violation of the Federal CAN-SPAM act
actioning these complaints however is best done as a class action suit, brought by your carrier on your behalf. for that reason, if you start receiving what you feel are excessive UCE messages -- call your carrier and get on their case
UCE is often sent using "bot nets". the UCE then appears to have "come out of nowhere" as it is sent from thousands of different computers -- all using bogus return addresses
you should all know that when you execute the e/mail send program you can put *anything* in the return address-- "The Big Bad Wolf" {bbwolf@bbwolf.net} would work just fine
sending e/mail htat cannot be traced back to its source is illegal under the federal can-spam act -- but not hard to do. hard to trace though
until un-authorized programming is eliminated from the environment the problem will continue
change is comming. slowly.
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Bulk plan prices are going up, too
When they upped it to 20¢ last month, I looked at the packages again. The $5 plan is still there, but it's not unlimited anymore; it's now for a set number of messages. The unlimited plan has TRIPLED to $15/month.
So no, this price increase is quite definitely NOT just limited to us "a la carte messaging" users.
I used to get spam (and have to pay for it) as well, because they had a "convenient" service where you could send a text message to any phone by email. Fortunately, that's one service you can voluntarily shut off using their web site. Now I just have to keep reminding my contacts to please not text message me from their phones, because I don't want to pay for it (and I have no choice but to pay for it if they send it).
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Same reason Wide-screen Monitors are popular...
The masses are ignorant fools!
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misc rambling
A comapny will subsidize the initial product and make profit off of the use of that product. Text messages are priced quite high compared to other data. Printer ink is priced quite high compared to other liquids. People are becoming upset about text messaging prices. People are already pissed about printer ink prices ........ etc.
I do not think that either can be considered a competitive market. There is lock-in, contract, etc. Is this not a monopoly ?
The Justice Dept is tasked with investigating the market place and taking action where abuse is occurring. The present situation wrt text messaging and printer ink prices is much more abusive than anything Google has done. But then I suppose that there is politics at work here, so relief is not in your future.
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Text Messaging *IS TOO EXPENSIVE*
Think for a moment. Most voice calls/messages are 10 cents per minute or less. Now consider standard SMS at less than 160 characters. The air time isn't just a fraction, it's exponentially less.
Just because Wireless service Providers *CAN* charge disproportionate fees doesn't mean they should be allowed to do so.
Also, don't forget Mike (the Author)Masnick is a Schill for the industry who's company depends on the good graces of the industry to pay for advertizing (including seminars, industry meeting announcments, new product announcements, etc.).
In the words of "Deep Throat", "Follow the money."
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Re: Text Messaging *IS TOO EXPENSIVE*
If it is a freely competitive market, then yes they should be allowed to. The only problem is if there isn't enough competition.
Also, don't forget Mike (the Author)Masnick is a Schill for the industry who's company depends on the good graces of the industry to pay for advertizing (including seminars, industry meeting announcments, new product announcements, etc.).
Mike doesn't make his money off of advertising. His company depends on the "good graces" of their clients paying their bills, just like anybody else's company. And it's "shill". And "whose". And "advertising". And "announcements".
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it is way overpriced
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Shill For Industry?
"Also, don't forget Mike (the Author)Masnick is a Schill for the industry who's company depends on the good graces of the industry to pay for advertizing (including seminars, industry meeting announcments, new product announcements, etc.)"
Dude, you're so far off the mark it's a joke. Have you read this blog? I am an occasional writer here, so you could call me biased, but we've been called telco shills a few times over. The joke comes when the telco shills write in to call us anarchists, and anti-business.
Read the blog. Or just seach it for the term "telco". When telcos are abusive or knuckleheads, this blog says so. When telcos are innovative, this blog says so. When telcos do the right thing, this blog says so. If you added it all up, you'd see the first case happens more than the latter two. The total = integrity. Too bad it's such a foreign concept to most.
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