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AT&T and Verizon Fight Back Against Price Fixing Accusation

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Punishment

donebrasko

Jun 17, 2009, 11:45 AM
They are forcing people to get text plans. Thats why they raised the prices. So if you dont get a text plan, they will punish you by making you pay more.
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WiWavelength

Jun 17, 2009, 12:02 PM
donebrasko said:
They are forcing people to get text plans. Thats why they raised the prices. So if you dont get a text plan, they will punish you by making you pay more.


Exactly. That is the intent of the exorbitant increases in the PPU text messaging prices. The wireless carriers want to coerce all users, even casual messaging users, into signing up for messaging plans, as those plans -- unlike casual use -- guarantee additional, predictable ARPU every month.

It would be interesting to see numbers on how many wireless subs in that 2006-2008 time period switched from PPU to messaging plans due to the PPU price increases.

AJ
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ibnturab

Jun 17, 2009, 1:50 PM
Its not just ATT and verizon, T-mobile did the same too. I remember when an sms cost only 5 cents [ on t-mobile] to send/receive locally or internationaly until just 3-4 years ago. How can an sms cost more in 2009 than it did in 2002 ?? Now its 20c like the rest to send/receive.
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OldPhone

Jun 17, 2009, 3:27 PM
Not only that, but, a year ago T-Mobile charged .15 PPU and .20 for international text message sent and now it's .20 for both PPU and international. If you have a bucket international does not apply and it's .20. So T-Mobile is essentially saying it's the same price to send a message across the street as it is across the world.
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mrpmpfan

Jun 18, 2009, 2:25 PM
Do you know why text messaging prices increase for pay per use? Its because even when they were $0.10/message we had people calling up and complaining about the charges then, at AT&T we credit an insane amount of usage charges when a customer cries a little bit. So to help us with the credits we have had to dish out we had to increase the rates for pay per use. Because we do have a suprising amount of people who don't even read their bill and just pay it. In short, if you are going to text message a little, how bad is $5 for 200 text messages, if you are going to text a lot $20 for unlimited isn't bad either.
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RobbieJnn

Jun 18, 2009, 3:44 PM
mrpmpfan said:
Do you know why text messaging prices increase for pay per use? Its because even when they were $0.10/message we had people calling up and complaining about the charges then, at AT&T we credit an insane amount of usage charges when a customer cries a little bit. So to help us with the credits we have had to dish out we had to increase the rates for pay per use. Because we do have a suprising amount of people who don't even read their bill and just pay it. In short, if you are going to text message a little, how bad is $5 for 200 text messages, if you are going to text a lot $20 for unlimited isn't bad either.


exactly, im glad someone finally said it.

theres really only 2 types of 'tex...
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Azeron

Jun 18, 2009, 8:08 PM
Hell, we use it as a selling tool. "Mr. Customer you sent and received forty text messages last month which cost you $8! If you had a 250 TXT bundle it would have only cost you $5! That's a $3 savings! (Grimacing deep inside.) It looks like you are on pace to do about the same this cycle as well. I can backdate a feature change to the beginning of your cycle and even if you exceed the 250 allowance it is only $.10 per message sent and received above your 250." Yeah, only. It's only $.0999999999999 cents more than it actually cost to generate. I'm going to hell! I just know it. I cringe inside every time I talk a customer into a bundle. Hopefully, the Senate scrutiny will make the CEOs leery of government interference and they wil...
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Kryger

Jun 17, 2009, 2:49 PM
$20 unlimited text plan ftw
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Menno

Jun 17, 2009, 3:58 PM
alright... under the old plan, at .10 a message, you would need 50 messages before it would be cheaper to get a texting plan.

Under the new system it is 25 messages. Yes, it is lower, but honestly... if you are texting more than 30 messages a month, why arn't you on a plan to begin with?

Messaging when it came out was just something you did if you didn't need to talk to someone, just confirm a time, or say you were running late. now people use it AS communication, and hold whole conversations. The usage of texting has changed, so the plans do as well.
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Versed

Jun 17, 2009, 6:21 PM
Well they all raised their texting prices within a few weeks or month of each other, this is collusion. And I can see why the government is getting into this.
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Menno

Jun 17, 2009, 6:38 PM
ok.. you're not getting this.


take two gas stations. They both sell their gas at 3.00 a gallon.

One of them drops to 2.50.. I can guarentee you that the other will drop to at least 2.50 within half an hour or they will lose so much business it won't even be funny.

Now, lets look at it the other way. Two places sell their gas for 2.50, but the cost to purchase that gas is increasing steadily. Neither company wants to be the first to increase prices because they know there will be a backlash. But it gets to the point where if they continue to sell at 2.50 they will lose money.

So the bump it up to 3.00. there is a backlash, but not that big as expected. After that, the other station raises prices? why? because if they k...
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Azeron

Jun 18, 2009, 7:50 AM
It does not cost carriers anywhere NEAR $.20 to send an SMS. They are getting over. Wasn't Sprint the first to go to $.20 per text? Are they being sued? Also, in Europe are not incoming texts free?
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Menno

Jun 18, 2009, 10:31 AM
Is this europe? No In europe most of the people are on what we would call "pre-pay" or "month to month" contracts as well, a lot of their networks (I can't say wireless, but their highspeed, and landline, so I assume wireless as well) were built using tax money. In the US, the companies foot the bill for the wireless networks themselves. Apples to Oranges.

And you're right, it doesn't cost them .20 for a message. But it does cost them money to build networks capable of handling media content (picture and video messaging, IM style texting). If people still only used texting as a "honey I'm running late" emergency thing, it most likely would be .10 a minute, but people increasingly use it as their primary means of communication.

Yo...
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Azeron

Jun 18, 2009, 11:17 AM
The only point made is that it does not cost them anywhere near $.20 to provide an SMS. Nor does it cost $.45 to provide a minute of airtime. This IS the United States and we will let the courts decide if wireless carriers can charge exorbitant fees for services or not.
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Menno

Jun 18, 2009, 12:47 PM
They don't charge exorbitant fees for services. They offer competitive rate plans, with clearly listed overage charges.
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Phone_Revenger

Jun 18, 2009, 5:32 PM
is it free for Mcdonalds to put cheese on their burgers? Of course not.

Assuming a single slice of cheese cost them a penny. Sounds cheap for the company right? Wrong.

0.02 (cheese) x 400 (burgers per day)= $20

$20 (cost of cheese per day) x 7 (days in a weeks) = $140

$140 (cheese per week) x 4 (weeks in a month)
= $560

$560 (cheese per month) x 1 million (stores in the USA) = 5,600,000

The cost for cheese for McDonalds a month?
$5,600,000 a month, and people wonder why a cheese burger cost more then a hamburger.

If it cost someone something for anybody, they will charge for it. How else would you meet the demand for people who average now 1,100 text per person per month? Towers have limits too, so you need to expand...
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WiWavelength

Jun 18, 2009, 6:51 PM
Phone_Revenger said:
How else would you meet the demand for people who average now 1,100 text per person per month?


Who knows where you mustered that average number? Source?

Regardless, here is an idea. Charge the excessive users more.

Phone_Revenger said:Towers have limits too, so you need to expand and expanding is not free.


You have essentially no technical knowledge of wireless communications, do you?

A one minute wireless conversation between two people, on the average, passes on the order of 150,000-300,000 bits of digital voice data. A single SMS requires no more than 1120 bits of digital text data. That is less than one percent of the same voice data....
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Phone_Revenger

Jun 18, 2009, 7:07 PM
"A single SMS requires no more than 1120 bits of digital text data. That is less than one percent of the same voice data"

1120 bits still doesn't equal 0

That's for a single message, you still times that by average number of users it becomes staggering.

"Who knows where you mustered that average number? Source?"

"Americans text more than they talk"
http://news.cnet.com/8301-1035_3-10048257-94.html »

Here's a source if you would like to read.

For someone who claims to know about the amount of data it takes to talk and text, you should know how much data a tower can handle.
You and I both know that number is not infinte.

How a cell phone handles the process or how little data it requires offers little relevance when you t...
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Azeron

Jun 18, 2009, 7:07 PM
http://www.dslreports.com/shownews/ATT-High-SMS-Pric ... »

AT&T: High SMS Prices A 'Faulty Notion'
Carrier insists 200% price hike is your imagination...
Jun 17 2009 by Karl Bode

"Yesterday AT&T and Verizon were hauled before Congress to explain why text messages have jumped 200%, when text messages piggyback on secondary control channels within wireless transmissions, costing carriers virtually nothing. Applied to real world bandwidth, sending 2560 songs via 160 byte SMS would cost an estimated $61,356,851.20, but according to AT&T and Verizon -- that's perfectly reasonable, and evidence of a highly competitive wireless market."


"Of course the reason carriers uniformly raised SMS prices from ten cents to tw...
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