Cost of text messaging keeps rising: $1310 per megabyte

It seems the only person outraged enough to complain about the rising cost of text messaging and possible collusion (aka price fixing) among the carriers is Senator Herb Kohl, head of the US Senate antitrust subcommittee who sent a letter to four mobile phone operators (Verizon, AT&T, Sprint and T-Mobile) which reads in part:

“Your four companies are the nation’s leading wireless telephone companies, collectively serving more than 90% of the nation’s wireless subscribers. Since 2005, the cost for a consumer to send or receive a text message over each of your services has increased by 100%. Text messages were commonly priced at 10 cents per message sent or received in 2005. As of the end of the month, the rate per text message will have increased to 20 cents on all four wireless carriers . . . What is particularly alarming about this industry-wide rate increase is that it does not appear to be justified by rising costs in delivering text messages . . . Also of concern is that it appears that each of companies has changed the price for text messaging at nearly the same time, with identical price increases. This conduct is hardly consistent with the vigorous price competition we hope to see in a competitive marketplace. What has changed in recent years is the level of consolidation in the wireless telephone industry.”

Bob Frankston, who posted a comment to the article says: “Once you start questioning why we have to pay for transporting bits the industry’s basic definition as a service business is open to question. Next we’ll ask why we have to pay every month a high fee to just use the existing copper wires to carry data when these same wires cost far less when used for phone calls and used to cost $1/month when used as alarm wires. Most of the wires have long since been paid for.”

Perhaps Senator Kohn should also be investigating the lack of competition in the market for wired broadband services.

Comments

  1. crazy! i can see people installing IM over IP software, so they pay only for the few bytes per message … as usual people w/o in-depth networking knowledge get hit and ‘milked’ by telcos
    wish the FCC would get involved, or the BBB!