September 10th, 2008
Sen. to carriers: Why do text messages cost $1,300 per meg?
Did you see CrunchGear on AT&T’s text charges? (I found it via Ars) It seems at 20 cents per message, AT&T is charging $1,310.72 per megabyte at those rates.
The rising rates for texting prompted Sen. Herb Kohl (D-Wisc.) to write a letter to the cell companies requesting information on the reasons why and wherefore.
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. Sprint was the first carrier to increase the text message rate to 20 cents last Fall, and now all of its three main competitors have matched this price increase.
… 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. …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.
And what was he expecting from our telecom policy?
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.
Ars reports this is “more of an opening of the discussion about these issues,” according to an anonymous staffer. “We have an open line, and we aren’t condemning them without hearing what they have to say.”
