The chairman of a Senate panel on antitrust issues on Tuesday called on the Federal Communications Commission and the Justice Department to scrutinize competitiveness in the cellphone industry, pointing to a 100% increase in some text messaging charges by four companies that control most of the market.
Sen. Herb Kohl (D-Wisconsin) said that from 2006 to 2008, the price charged by the four biggest carriers for sending and receiving such messages rose from 10 cents to 20 cents.
And the increases seemed to occur in “lock step” — first from 10 cents to 15 cents and then from 15 cents to 20 cents, with each set of increases occurring within a period of months or even weeks, said Kohl, chairman of the Senate Judiciary Committee’s subcommittee on antitrust, competition policy and consumer rights.
“Are these price increases the result of a lack of competition in a highly concentrated market?” Kohl asked.
As a result of consolidation in recent years, four companies — Verizon Communications Inc., AT&T Inc., Sprint Nextel Corp. and T-Mobile USA Inc. — control 90% of the cellphone market, with Verizon and AT&T accounting for 60% between them.
[...]More than 1 trillion text messages were sent in the U.S. in 2008.
Found by Brother Uncle Don
Ya know, I can’t help but wonder if the US government wants Text Messaging priced out of existence. Because it’s got to be harder from them to “spy” on so much badly spelled and archaically abbreviated wordage. Not like spying on our email packets. The cost increase may be the result of the Telco having to increase their archival storage of text messaging, in order to fulfill some FCC/FBI/NSA requirement. Whereas before, the Telcos were just relaying the text traffic, and losing it after being read by their customers. So these price increases, could be what’s paying for the US government’s paranoid domestic spying policy.
A pricing czar. Lol
This is what happens when the lobbyists run things. Evidently the federal government is unwilling or unable to check the power of corporations anymore. Much to our disadvantage. I doubt our “socialist” president will spend any of his political capital going after them either.
#11, In some things, yes. I know our grocery bill has increased 50%+.
Remember that Bush II took Energy and Food out of the inflation calculations.
#13, Exactly. If you don’t like the cost, don’t frakking use it!
I would rather see text messaging go to 50c per letter and grocery prices come down then hear a bunch of people gripe about how they can’t live without text messaging. It makes me think all these people are bunch of HS kids who need the latest tool to keep in touch with their friends between class breaks.
As an early adopter of text messaging in Canada. I can say without question that the pricing for texting has increased over the years, not decreased. Early packages included unlimited texting messages.
My understanding of the technology is that the text messages are sent out over the backend channels of the wireless network that are used for managing the infrastructure. Not even utilizing the voice channel capcities… so I would think, well obviously they are running out of this backchannel space.
But of course, I just came back from France/Italy I there wasn’t one time I could say I was in a public place with people around that I could not find more than one person text messaging. There is no way we are close to the text messaging capacities that these countries are utilizing.
The answer is the same as the following question.
Q: Why does a dog lick his balls?
A: Because he can.
Because the world is chock full of really stupid people with nothing important to say who are willing to pay far too much to say it over a “service” that is just a control link used by the cell system that must be there for the system to work at all. So, people are paying for and “additional feature” that is an inherent part of the cell phone system and which costs the cell company virtually nothing more to implement than basic cell service (just hard drive storage of the messages).
I need to add that some of those stupid people are the same ones who talk about nothing while remaining parked for 50% of a short left turn arrow or who cause accidents while talking or texting about nothing while driving. My mesage to them: STFU! and pay attention to your driving.
He referenced lack of competition/consolidation as one of the reasons for the massive “increase” in prices in the cell market. However, it seems to me that there’s never been a ton of cell phone competition in any given market, since the original spectrum was set up with an A and B system. The A system was run by the ILEC (local wireline Bell) and the B system was sold to a competitive company. In a few cases the A carrier leased their spectrum to another provider because they didn’t want to screw around with it.
Once the 2 companies were established it became quite easy for them to raise funding for the FCC auctions of new bandwidth, buy up other carriers and consolidate their organizations. But all the while, there have only ever been 2 (sometimes 3 with the PCS spectrum auctions in the late 1990s) cellular providers in a given area.
Nextel isn’t technically a cellular service- they bought up a bunch of 2 way radio spectrum and started using it for iDEN, which according to the FCC is a “dispatch radio service” not cellular. Hence the PTT feature on all their phones.
So I find it funny to hear the congressman complain about lack of competition in the cellular industry when the government seemed to go out of its way to make competition nearly impossible.
Oh, and don’t forget that the FCC failed to perform its only real duty by defining a digital standard… so now I can’t take my unlocked Nokia over to Verizon, because it won’t work, period. Imagine buying an LG television and only being able to watch the local NBC affiliate… But that’s a whole different thread.
I’m just disappointed the video left out the best part.
I love to watch multi-billionaire, corporate CEOs calmly tell outrageous, bald-faced lies to Congress and by extension, to every single one of the American people.
The very best part is when you can tell from their expressions and the tones of their voices, they could care less everyone knows they’re flat-out lying.
I find such breathtaking arrogance endlessly fascinating.
Q: What do you call an American with half a brain?
A: Gifted
All the phone companies are doing is, saying maybe talk shouldn’t be cheap; maybe, talk should be worth something. I agree talk shouldn’t be cheap.
This whole thing is ironic. We all have been taught that talk is cheap, and it is.
However, hearing cheap talking Senators beating their chest and saying phone companies are over-charging for a teenager luxury item is a hoot.
Congress having public hearings to just yap about something considered egregiously wrong and illegal is stupid and unproductive.
Both the American public and congress should just do something or stop complaining. No one is forcing anyone to buy these plans.
If American’s and their congress where smart with their money there wouldn’t be an economic crisis.
It’s really simple, STUPID AMERICAN’S Begets STUPID a CONGRESS.
The guy has the Milwaukee Bucks and Kohl’s Department stores. If he thinks these guys are colluding for high profits, how about he start his own cell phone company, and drive those guys out of business?
I also notice that the airlines charge the same amount for flights, all at exactly $227, raising and lowering their prices within hours of each other. Is this collusion too?
Here’s the whole hearing.
Is Congress stupid? do we really have to have these hearings and investigations just to figure out that the cell companies are just trying to make more money off customers on features they use the most of?
But, you would have to be a idiot to pay per text message if you are a big text user. Does this even apply to anyone? Maybe Congress should figure out why I had to cancel my landline because it costs twice as much as my cell plan! Maybe Congress should stop trying to control the retail markets and let the stupid consumer decide what is worth it or not.
Seems to me that most consumers would eventually drop texting if it became too expensive. Frankly I think Congress misses the hole problem with cell phone companies. That is all the gimmicks for free phones or reduced phone costs. Their is nothing for free as we have seen time and time again. Make it so we buy the phone and pick the plan. Make it their is no contracts! Now that would be doing something Congress!
#34, jescott,
Maybe Congress should figure out why I had to cancel my landline because it costs twice as much as my cell plan!
Bullshit. Please show me the land line that costs more than a cell phone.
remember in a consumer based market, screwing your customers is always best for you and why care about your customers!? they are just loaded with cash..
(after a little digging)
why this passion to bring “justice” to the pricing of a peasly, unnecessary luxury item like texting?
-because congress discovered the TelComm’s are making more money than they are.
The worst part, (for congress) is, of course, the TelComm’s are doing it *Legally -and SOMEHOW, they do it without massive deficits.
-perish the thought :p
have a look: [links at bottom of page]
one blogger did some math on the subject and came up with some eye-opening results.
-SMS messaging crossed the crossed the $100 Billion mark (annual) in 2007 (!) -that’s more the entire movie industry (with virtually no overhead, relative to movie making costs) [1]
-the cost of transferring one megabyte using SMS pricing is $1,497.97 (!)
-should you desire to transfer a 4mb song, $5,991.88
-cost to transfer 2560 songs: via SMS messaging: $15,339,212.80 [2]
-no wonder congress is moaning..
(also, it circumvents GovCorp control of information and news. (though i’m sure the CIA loves it)
[plus, they haven't figured out to tax this bounty into the stone age yet]
——————-
As astounding as the above may be.. if you take the talking points after the 3:00 minute mark in the video you can almost directly transpose the argument to:
***The Banking Industry*** -as a whole and in relation to ATM’s. -only it’s way worse..
SO where is the outrage and inquiry into the banking industry’s (newly consolidated) monopoly?? (and price hikes)
They brought down (several) industries, then got their puppets in congress to fork over trillions of the peoples money so they could by up any remaining (hard) assets and banks. -at fire sale cost.
-I’m sure your all familiar with the plethora of new fees and charges the majority of banks now charge as of 1/2009
-no need to elaborate.
If congress wasn’t up to their necks in complicity with the banks, of the wholesale destruction of the U.S. we might have heard something on this by now.
Instead, we get cries over text messaging.
Yup, we have the best Democracy money can buy.
the saddest statement of all: We *willingly* keep voting these treasonous crooks back into office..
Links:
[1] $100b article
[2] Math whiz’s article -very well done.
-s
(Turn off your TV)
I call distraction! no one really cares about this because they haven’t slowed down texting at all. anyone who texts a lot doesn’t even bat an eye over 29.99 a month for basically a service that costs nothing to implement for the telcos. If everyone quit paying 29.99 a month then you would see the price drop like a rock. If you don’t like it, don’t use it!
hey now.. where can i find the html tags that wordpress uses to make the nifty links the editors made for me above? (post #39) or does the standard “a” tag work?
-s
sms messages should be very cheap because no additional equipment is required from the cellular providers in order to supply this service. Another service that should be cheap it’s the text2land.com service that allow you to send sms messages to landline phones.