SMS Price Gouging Investigated

SMS Price Gouging Investigated

Posted by Sam Churchill on December 29th, 2008

The NY Times says carriers are ripping off people with text messaging fees. The cost of delivering text messaging is virtually nothing. Text messages are tiny free riders, tucked into what’s called a “control channel“, space reserved for operation of the wireless network. It’s pure profit for cellular carriers because it doesn’t require a phone channel.

Now all four of the major carriers have increased the pay-per-use price for messages from 10 cents to 20 cents. With young people often sending 100 text messages a day, the added fees can be astronomical.

Legislators in Washington DC are now looking into price gouging complaints. 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. Gartner expects 3.3 trillion messages to be sent in 2009, up from 2.5 trillion sent messages, up 32 percent from 2007.

Short Message Service (SMS) is the communications protocol allowing text exchange between mobile phones. SMS text messaging is the most widely used data application on the planet, with 2.4 billion active users, or 74% of all mobile phone subscribers sending and receiving text messages on their phones, according to wikipedia.

Control channels insure that only one mobile uses a voice channel at a time. The sliver of spectrum devoted to a control channel (pdf) is used to set up a phone call. That’s why the length of the message is limited; it’s used for internal communication between tower and handset to set up a call. It was mostly unused until NTT DocoMo discovered it could adopted for text messaging. The channel uses space whether or not a text message is inserted.

A text message initially travels wirelessly from a handset to the closest base-station tower and is then transferred through wired links to the telephone network. Cellular Intercept Systems can capture Forward and Reverse cellular channels of a cell phone call using the control channel.

Professor Srinivasan Keshav, at the University of Waterloo, in Ontario, said: “Messages are small. Even though a trillion seems like a lot to carry, it isn’t.” Keshav said that once a carrier invests in the centralized storage equipment — storing a terabyte now costs only $100 and is dropping — and the staff to maintain it, its costs are basically covered. “Operating costs are relatively insensitive to volume,” he said. “It doesn’t cost the carrier much more to transmit a hundred million messages than a million.”

Professor Keshav, whose academic research received financial support from one of the four major American carriers, discovered just how secretive the carriers are when it comes to this business. Two years ago, when he requested information from his sponsor about its network operations in the past so that his students could study a real-world text-messaging network, he was turned down. He said the company liaison told him, “Even our own researchers are not permitted to see that data.”

Trans-late-it (transl8it), is a simple, free SMS translator. Just type in your SMS or TXT lingo and let transL8it! convert it to plain english OR type in a phrase in english and convert it to TXT. English teachers might find it useful. The Daily Telegraph ran a story a couple years ago on a teacher that could not decipher what a 13 year old student had written.

“I could not believe what I was seeing. The page was riddled with hieroglyphics, many of which I simply could not translate,” the teacher told the newspaper.

The teenager’s essay which caused the problem began:

“My smmr hols wr CWOT. B4, we used 2go2 NY 2C my bro, his GF & thr 3 :- kids FTF. ILNY, it’s a gr8 plc.”

Translation:

“My summer holidays were a complete waste of time. Before, we used to go to New York to see my brother, his girlfriend and their three screaming kids face to face. I love New York. It’s a great place.”

And now, ladies and gentlemen, direct from London, for your astonishment and pleasure…the world’s smallest web site!

source: dailywireless.org