Congress demands to know why text message prices have skyrocketed
Filed under: Budgets, Extracurriculars, Technology, Recession
Early this week, Sen. Herb Kohl, who chairs the Antitrust Subcommittee in the Senate Judiciary Committee, sent a letter to the big four cell phone providers to demand they account for their outlandish recent price increases on text messages. Since 2005, the price of a text message has doubled to an industry standard of 20¢, and perhaps not so coincidentally, it has done so with all four phone providers: T-Mobile, AT&T, Verizon, and Sprint.
Kohl, a Democrat from Wisconsin, demanded that the cell phone companies show him paperwork about their price structures, including evidence of what made them decide to raise rates in such a dramatic way. The rate hikes, Kohl says, were "hardly consistent with the vigorous price competition we hope to see in a competitive marketplace," and he intends to look into them.
My cell phone provider, T-Mobile, likes to pretend that I'm still getting a good value for my money. How does it do this? By slipping in the word "just" right before it drops the insanely overpriced charge. As in "send and receive messages for just $0.20 each," a quote taken from its website. Note the leading zero, which I assume is there to make the rate seem lower.
"Just?" That means if I send "just" five messages, I've already racked up a dollar. If a friend sends me "just" five messages, that's another dollar. And woe to me if any of my friends sends me a message more than 160 characters long, because my carrier will break it up into two dispatches and charge me twice for the same note. A standard quip out of Bartlett's Familiar Quotations takes more than 160 characters. This paragraph took "just" 370.
What's more, I have no control over who sends me text messages, but I still have to pay when I get them. Good thing the Postal Service doesn't do it that way, or we'd all be paying for each piece of junk mail we get. What's fair about a charge you have no control over?
"Just" 10 years ago, a text message cost a nickel. "Just" two months ago, one cost 15¢. Now each is 20¢. Don't tell me that jump matches the cost of living, T-Mobile, because it doesn't, and telecom services aren't tied to gas prices, so don't try that one, either. Last year, AT&T lured iPhone subscribers by including 200 free text messages in the standard plan, but in July, it started charging $5 a month for those same 200 messages. At the 20¢ rate, sending a mere megabyte of information would cost more than $1,300. I know that something smells funny, and I'm feeling ripped off.
I don't expect cell phone companies to squeak by without making a profit, but neither does Kohl. His main worry is possible price fixing among the cell phone companies. It should not escape our notice that this issue has been taken up by the branch of Congress, the Antitrust, Competition Policy and Consumer Rights Subcommittee, that attacks companies that collude to raise prices in a non-competitive atmosphere. (Veep nominee Joe Biden sits on it, too, as does Arlen Specter). Hey, you phone companies aren't talking to each other in secret to keep the prices high, are you? That's what Kohl wants to know, too. Go get 'em, bulldog!
Reader Comments (Page 1 of 1)
9-11-2008 @ 4:24PM
ROADMASTER said...
Text messaging is like western union...stop..You've got a phone talk!..stop. Charging me for something I have no control over has to ...STOP.!!!!!!!!!!!!!
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9-11-2008 @ 10:54PM
goretti said...
I just blocked all my text messages outgoing and incoming it was getting ridiculous on price. My carrier is Verizon now when anyone tries to send me a text message they will get a message saying I cannot receive text or video messages. I say if you have something to tell me call me. Its working for me.
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9-13-2008 @ 10:55PM
Kirk Griffiths said...
Simple: The carriers are all in bed with each other as far as their rates are concerned.
They all noticed that a lot of people send text messages so...they increased text messaging prices. It's that simple.
Cellular providers are a "necessary evil". We like our cell phones, so we generally just put up with rate increases and poor customer service. And the cellular providers know they have us by the short hairs.
Like the 'Big Oil' companies, the credit card companies and banks, they have no empathy for their customers. They all pop us with fees and higher prices at every chance. And, where are we 'little guy' customers to go if we don't like our cell phone company's service or rates? They are all nearly the same rate-wise and our contracts "lock" us in (unless we pay a penalty for early termination that is).
That is why the cellular providers (with mandatory 2 year contracts) hate "unlocked' phones with open-ended contracts (like land lines) where customers can opt out for any reason.
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9-12-2008 @ 5:20AM
Leigh said...
Wake up people. ! Noone TALKS on their phones anymore so these greedy companies raise the rates on what feature they know we use! And what a coincidence all the prices are the same.
LG
www.myspace.com/leighgoldstein
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9-12-2008 @ 11:18PM
CA said...
They are all criminals robbing the poor. There is no reason why a text message should cost 20 cents. I was paying 10 cents a text, then I noticed my prepaid time was going fast, so I started a log, and not only was T-Mobile shaving minutes off of my prepaid account they had started charging me 20 cents for outgoing, and incoming text messages. The cell phone companies are nothing more than criminal enterprises, that are legally being allowed to rob the poor. I hate the greedy rich, and someday they will reap what they sow.
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9-22-2008 @ 7:30PM
J.P. said...
Big companies think they can get away with anything, this is getting crazy all of our bills and products are going up in price and nothing is being done about it congress only does investigations when it is around election time. What happened to a few years ago when they were looking into the oil companies as to why gas was so high? I wish we could get some working class average people into government maybe then things would change. It is so sad that there are so many people who can not afford to live comfortably and struggle daily while CEO's and bie executives get millions per year and they just keep raising their prices. When will this end ?! This is the greatest country in the world we all need to keep our heads up and strive for success. I will not be beaten. We need to show the big corporations that we have the power NOT them.
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9-16-2008 @ 11:52PM
lola said...
What about hearing impaired people who rely on txt msgs??? thre should be something the congress can do about it!!!
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