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Nothing beats an overcharging scheme like cell phone text messaging. What originally was envisioned as a small text paging add-on has become a massively lucrative service from America’s cell phone companies who rake in millions from one line messages. In 2008, 2.5 trillion messages were sent from cell phones worldwide, up 32 percent from the year before, according to the Gartner Group.
Woe to those who send or receive text messages without a special texting plan. Although the actual cost to send and deliver dozens of text messages is literally a fraction of a penny, almost every carrier charges a uniform 20 cents per message sent or received. A text-happy teen can rapidly skyrocket your cell phone bill, as one Massachusetts father discovered.
http://www.phillipdampier.com/video/WWLP Springfield Cell Phone Bill Shocker 12-26-09.flvWWLP-TV in Springfield reports on a Massachusetts dad confronted with a $500 text message cell phone bill last year. (1 minute)
Texting plans typically add a few dollars to your cell phone bill, although unlimited texting can cost you a ten spot every month per phone from some providers. For those customers receiving unwanted text message spam, most simply pay the bill, which only adds to provider profits. Carriers promise they will credit customers receiving unwanted text messages, and several will block them altogether for no additional charge. Carriers claim the popular text messaging service adds value to subscribers, and frankly utilizes less of their network resources than customers making quick voice calls back and forth.
Yet prices for cell phone text messaging keep increasing. Some carriers originally charged just five cents per message. Yet since the number of wireless phone companies have shrunk from six to just four today, prices have increased: first to 10 cents per message, then 15 cents, and today a near-uniform 20 cents per message. That generates profits credit card companies can only drool over. In fact, doing the math, sending 140 bytes of data in a typical text message costs you one cent for every seven bytes of data. That’s $1,497.97 per megabyte.
Senator Herb Kohl (D-Wisconsin) has had his share of constituent complaints from those who’ve received surprise enormous bills. Kohl is chairman of the Senate Judiciary Subcommittee on Antitrust, Competition Policy and Consumer Rights. He began investigating why text messaging costs so much.
“Text messaging files are very small,” Kohl says, “as the size of text messages are generally limited to 160 characters per message, and therefore cost carriers very little to transmit.”
Perhaps even less than Kohl suspects. Text messages are limited to 160 characters because they ride across barely-utilized control data circuits cell phone companies use to manage calls. Because these circuits are idle or underutilized, yet still occupy part of the spectrum, riding text messages across these channels costs carriers next to nothing, and don’t bog down wireless networks. But that staggering bill can sure bog down your budget.
The second gilded age marches on
Even more reason for the government to step in and stop this kind of robbery.
Correction: Verizon and AT&T charge $20 per month extra for unlimited messaging in addition to normal plan costs. Sprint charges $10 for the plan upgrade. T-Mobile charges $10 on new plans, $15 on old ones. Smaller texting plans are available for Verizon and AT&T at $5 per month for 200 messages or so, but it’s still a rip compared with the costs involved, as can be seen with smaller carriers that charge $5 for the unlimited addon. In carriers’ defense, the “unlimited messaging” plans do include the rather data-heavy picture message protocol, MMS, if your phone supports it. That said, picture messaging simply hasn’t caught on in the US (I blame poor phone user interfaces and slow picture upload speeds, which make sending a single VGA picture a twenty-second affair) so it’s routine for a cellular bill to show three thousan text messages and two picture messages.
Yep, it’s a racket, especially since text messages sometimes get bogged down in the “tubes” for minutes or hours, something that doesn’t happen with voice calls (it goes through or it doesn’t). That said, the alternative is battery-hogging, data-plan-required IM.
My Verizon plan charges $9.95 for unlimited text and pic messaging.
When it’s time to renew your contract, call your carrier and ask for customer retention. They’ll be more than happy to give you free texting to keep you as a customer. Afterall, it costs them almost nothing to send a text message. It worked for me when I called Sprint, plus I got some more discounts as well.
I currently own a Sprint phone (BlackBerry Curve) that I bought with a 2 year plan. I also bought a lot of accessory and software for this phone as well (Extended Memory Card, a case, phone chargers for the car and wall, a cell phone clip holder, software and etc). I paid out several hundred dollars of my money out of my pocket to get this phone, establish a phone number, cell service, get the accessories, and software for this phone.
My contact with Sprint is for 2 years and the cell service plan I have is the “Sprint Everything Plan”. This plan includes “unlimited” calls (both local and long distance), e-mails, text messaging, and data are included in this plan. There are no limits on the plan as this plan includes unlimited services for everything. The plan cost me $123.11 a month, which includes government fees and taxes, total equipment protection plan, and Sprints surcharge of a .99 cent Administrative Charge in which was not disclosed to me at the time I signed up that I would also have to pay as well.
The Sprint Everything plan cost $99.99
Total equipment protection is $7.00, which covers service/repair and insurance for loss of the phone.
Government taxes are about $8.00 and some odd cents
Anyhow, I bought the phone and established service in August of 2009; I was forced to sign up for a two year contact with an early termination fee based on the having the phone service for anything less than 2 years. I received the phone by mail, right away I had problems. The cell phone that Sprint sent by mail, was the wrong color, so I contacted Sprint and had it changed out for the right colored phone I wanted. Also, when I originally signed up, I had asked the Sprint representative if I could have an old number ported over to this new phone. Sprint said no problem, but when I went to activate the phone with the ported number they stated that they could not do it on this phone. I finally ended up with a new number that I selected after going about 20 to 30 phone numbers in Sprint’s database.
Finally, I thought everything is good to go and I would no longer need to deal with any other issues. I made my payments early every month by using my cell phone to contact Sprint by dialing *3 and then using my credit card to pay the bill. No problems right, wrong!
Today on Monday, January 11, 2010 I received a letter delivered by U.S. Mail Postal Service from Sprint stating that on January 10, 2010 that Sprint would now be changing the terms of my account and if I did not enroll in automatic payments by January 10, 2010 I would be getting charged another $4.99 per month on top of my bill because I had not signed up for automatic bill payments. The letter is dated December 21, 2009. I find this hard to believe that Sprint sent this letter out on December 21st, 22nd, 23rd, 24th, 25th, 26th or even as late as January 7, 2010. Most mail will reach my home within 3 to 7 days, even if it comes from the East coast.
Now, I have never been late on any of my payments and have always paid at least 10 days or more earlier than the payment due date. Also, I get this letter in the mail today which is January 11, 2010 and it has a compliance date of January 10, 2010. So, I decided to call Sprint’s Customer Care number listed on the letter to dispute this and to let them know that they are under a contract with me and cannot just change the pricing terms of the contract on a whim.
I first spoke with someone, who did not provide me his name. He stated that he could not help me and transferred me to another representative. I asked for the next representative name as she did not provide it and speaking with her, she stated her name was Amy. I asked for her last name but she would not provide this information. I then asked for ID # and she provides ID #NF840760. I then explained that I received this letter in the mail and that there company now wants to change the terms of their contact with me. I explained that I have never been late on my payments for the service and I wanted to know why they are trying to change the terms of my contract. I explained that I had a due date and wanted to be able to make payments like I always have and did not want to have my credit card or bank information stored charged at their convenience. She put me on hold for a couple of minutes and then came back a stating that there was nothing that she could do about this. I stated that this was a breach of contract and that I am not going to pay this fee nor was I going to furnish my bank information to be stored and have automatic payments taken out of my accounts whenever they felt like it. Amy again put me on hold, she came back and stated that yes, it was a breach of contract and I could cancel my service with Sprint without any early termination fees. I said that this was not acceptable either as I had paid for a proprietary cell, accessories, and software that could not be used with another phone and/or provider. I stated that I wanted my money back for the phone, accessories, and software I had bought. Amy again put me on hold again while she contacted her supervisor.
Amy’s supervisor then picked up the phone and stated his name as being Chazz. I then asked Chazz what his last name was. He stated that he did not want to provide this information, so I asked for his ID #. Chazz, the Supervisor provided me with an ID # of YW148409. I again explained to Supervisor Chazz that I have never been late on payments and I was unwilling to provide any bank or credit card information to his company to start charging automatic payments from any of my accounts. I then stated that I am not going to pay any additional fees for not choosing to do automatic billing as this is not what was agreed to in the original contract.
Supervisor Chazz stated that he could cancel my service agreement without any early termination fee and that I could port the phone number to another carrier. I stated that I wanted my money back I paid for the cell phone, accessories and software I had bought for the phone as the phone is not transferable to another cell phone carrier. Supervisor Chazz stated that he could not refund the money for the phone, accessories, and software. Supervisor Chazz then asked if I wanted the phone turn off right now. I told him to not touch anything or disconnect the service until I contacted the news and an attorney about this matter.
So, this is where I am at. My contract is being breached and I believe that this may be a case of mail fraud as well.