Text message costs questioned by Senator, AT&T charging $1,300 per MB

September 10, 2008

Text message costs questioned by Senator, AT&T charging $1,300 per MB At the $.20 per text message cost that AT&T charges, the end total comes to $1,310.72 per MB of data usage- based on the average data size of an SMS message.  While this is an extreme example, text message rates have increased 100% since only 2005, which has prompted Senator Herb Kohl of Wisconsin to question the wireless carriers.

The Senator sent a letter to cell companies asking several questions, and asking them to explain the steep hike in charges over such a short time period, according to ZDNet.  Three short years ago in 2005, text messages were commonly priced at 10 cents per message- both sent or received.  In a matter of weeks, the rate per text message will have increased to 20 cents on all four wireless carriers.  Sprint was the first carrier to raise its prices last Fall, and now all of its three main competitors have matched the 20 cent pricing.

Here’s the main paragraph from the letter sent to wireless carriers verbatim: 

“….I specifically ask each of your companies to explain why text messaging rates have dramatically increased in recent years. Please explain the cost, technical, or any other factors that justify a 100% increase in the cost of text messaging from 2005 to 2008. Please also provide data on the utilization of text messaging during this time period. Please provide a comparison of prices charged for text messaging as compared to other services offered by your companies, such as prices per minute for voice calling, prices for sending e-mails, and prices charged for data services such as internet access over wireless devices, from 2005 to the present. Finally, please state whether your text messaging pricing structure differs in any significant respect from the pricing of your three main competitors. Please provide this information no later than Monday, October 6, 2008….”

All very logical questions indeed, with the main concern being that all four major US carriers increased their pricing by the same amount at the same time.  This was bound to raise a red flag, as the wireless industry should be competing on price rather than collectively benefiting themselves.  I understand that as the industry moves more toward an “open” standard of doing business they’ll lose customer exclusivity and therefore might need any extra help they can get, but they shouldn’t make it so blatantly obvious that is was a “group” effort to boost revenues for everyone.

With such high-bandwidth services and data-intensive mobile applications that are constantly running on carrier’s networks, the data used by a normal text message is rather inconsequential in the scheme of things.  “Text messaging files are very small, as the size of text messages are generally limited to 160 characters per message, and therefore cost carriers very little to transmit,” stated Senator Kohl in his letter.

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3 Responses to “Text message costs questioned by Senator, AT&T charging $1,300 per MB”

  1. truthseeker:

    A fine post, but Sir, let’s not buy into the current appalling trend of spelling “lose” as “loose”, a corruption which is almost endemic on the Web now. For such an otherwise well written, smart, erudite post, it is doubly alarming, since many will take it an endorsing this egregious error.

    Where did such an otherwise educated man get it from, pray? Standards any looser and we shall lose civilization completely.

  2. uprightcitizen:

    Please, let’s not buy into the new way of spelling “lose” as “loose”. For such a smart, well written post, it is alarming to see this – thousands will now follow your authoritative lead.

    Civilization may fall if this corruption spreads any further. Lose the “loose”, please.

  3. bernard b carman:

    you gotta be kidding me! the only replies thus far to this article about this SMS SCAM talk about spelling mistakes? GET REAL! 8-)

    i’m kind of wondering why there isn’t some kind of law suit against the phone companies for operating such a SCAM.

    while i philosophically believe companies have the right to charge whatever they wish to in a “free market”, it just seems so very odd that there is little to no competition for reducing SMS charges, as there is for mobile voice plans.

    something just smells funny about this entire issue.

    i just switched from Sprint to AT&T in order to get an iPhone and i told them to just turn my SMS OFF and that i didn’t want to contribute to the SMS SCAM.

    regardless, i suppose as long as people are OK with paying $1,300 per MB for texting, the phone co’s will continue to take their money!

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