What Carriers Aren't Eager to Tell You About Texting

[David Farber <dave () farber net>]

Begin forwarded message:

From: Gregory Hicks <ghicks () hicks-net net>
Date: December 29, 2008 2:35:58 AM EST
To: dave () farber net
Cc: ghicks () hicks-net net
Subject: What Carriers Aren't Eager to Tell You About Texting
Reply-To: Gregory Hicks <ghicks () hicks-net net>

Prof Farber:

for IP if you wish...

Regards,
Gregory Hicks

http://www.nytimes.com/2008/12/28/business/28digi.html?_r=1&em

Digital Domain
What Carriers Aren't Eager to Tell You About Texting

By RANDALL STROSS
Published: December 26, 2008

TEXT messaging is a wonderful business to be in: about 2.5 trillion
messages will have been sent from cellphones worldwide this year. The
public assumes that the wireless carriers' costs are far higher than
they actually are, and profit margins are concealed by a heavy
curtain.

Senator Herb Kohl, Democrat of Wisconsin and the chairman of the Senate
antitrust subcommittee, wanted to look behind the curtain. He was
curious about the doubling of prices for text messages charged by the
major American carriers from 2005 to 2008, during a time when the
industry consolidated from six major companies to four.

So, in September, Mr. Kohl sent a letter to Verizon Wireless, AT&T,
Sprint and T-Mobile, inviting them to answer some basic questions about
their text messaging costs and pricing.

All four of the major carriers decided during the last three years to
increase the pay-per-use price for messages to 20 cents from 10 cents.
The decision could not have come from a dearth of business: the 2.5
trillion sent messages this year, the estimate of the Gartner Group, is
up 32 percent from 2007. Gartner expects 3.3 trillion messages to be
sent in 2009.

The written responses to Senator Kohl from AT&T, Sprint and T-Mobile
speak at length about pricing plans without getting around to the costs
of conveying text messages. My attempts to speak with representatives
of all three about their costs and pricing were unsuccessful. (Verizon
Wireless would not speak with me, either, nor would it allow Mr. Kohl's
office to release publicly its written response.)

snip

Randall Stross is an author based in Silicon Valley and a professor of
business at San Jose State University. E-mail: stross () nytimes com.





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