Text-Messaging Rates Come Under ScrutinyNice 90% profit margin you've got there, mister!
12:28PM Wednesday Sep 10 2008 by Karl Bodetags: prices · business · wirelessTipped by wifi4milez 
The price of sending text messages via the nation's largest wireless carriers has skyrocketed in the last few years, jumping from five to twenty cents, per message,
both directions. That's a forty cent fee every time someone sends or receives a 160 character, 140 byte communication. It's a pretty dandy profit margin when you're charging (by
some estimates) around $1,310 per megabyte, and some in Washington are starting to wonder if it isn't just a little too spectacular.
According to the
Wall Street Journal, Sen. Herb Kohl (D., Wis.), chairman of the Senate Judiciary Antitrust Subcommittee, sent letters this week to the nation's largest carriers asking why prices are so out of control:
"What is particularly alarming about this industrywide rate increase is that it does not appear to be justified by rising costs in delivering text messages," Sen. Kohl's letter said. "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."
Many carriers have raised the price of individual SMS or MMS transmission in order to get users to sign up for more expensive bulk plans. The first generation iPhone, for instance, originally came with 200 free text messages. The new 3G iPhone, via AT&T, now charges customers twenty cents per message, or $5 for 200, $15 for 1,500, or $20 for unlimited. The pricing is set up so that the average SMS user (more than 200 SMS per month) has to choose between paying for these pricier plans, or getting hammered by per-SMS fees.
Of course, people keep paying the wireless carriers, so the wireless carriers keep raising rates.
