Americans’ cellphone texting costs

Both a US senator and a business professor writing about him in the New York Times found it a challenge recently to get to the bottom of cellphone texting's costs to customers vs. their costs to the cellphone carriers, given that the amount of texting Americans do has grown ten-fold in the past three years. Sen. Herb Kohl (D-Wisc.), chairman of the Senate antitrust subcommittee, was curious about why the cost of individual text messages (not unlimited plans) had doubled between 2005 and '08, and – when he asked the carriers – they spoke "at length about pricing plans without getting around to the costs of conveying text messages." Those costs did not go up anywhere near proportionately to the volume increase of text messages. The way the professor/commentator put it in the Times, "Customers with unlimited plans, like diners bringing a healthy appetite to an all-you-can-eat cafeteria, might think they’re getting the best out of the arrangement. But the carriers, unlike the cafeteria owners, can provide unlimited quantities of “food” at virtually no cost to themselves — so long as it is served in bite-sized portions [e.g., 160 characters per text]."

Leave a comment