Tag: wireless

Phone usage billing over the years: revisiting “A truly embarrassing truth”

Around eight years ago, back in this blog’s infancy, I wrote a post about wireless phone billing practices entitled “A truly embarrassing truth for wireless phone companies”. A lot has changed since then, so I thought I would go back and revisit the original article.

Text messaging hasn’t really gone anywhere in eight years. Despite the rise of smartphones and that feature phones (sometimes called “flip phones” or “dumb phones”) are now the exception instead of the rule as they were about a decade ago, a lot of people still use text messages to communicate. The billing has changed too: most if not all plans in the current era are keyed around smartphone data usage, with the voice minutes and messaging thrown in for free.

(And a quick aside here: unfortunately, the quality of voice calls over the public switched telephone network (PSTN) has changed to match that “thrown in for free” bit. Early in the wired phone network’s history, dropped and misrouted calls, particularly long distance calls, happened on occasion. By the 1990s, though, such occurrences were unacceptable and had been engineered out of existence. I still consider it unacceptable in 2016 for calls over the PSTN to be dropped or fade out. It’s one thing for calls over an unregulated, strictly VoIP network to have this happen (Facebook Messenger, Skype, Ring.cx, etc), but the PSTN is simply supposed to be more reliable than that.)

The only phones where voice minutes and message aren’t “thrown in for free” as said above, are prepaid pay-as-you-go plans. Even on these, text messages have dropped back down to the slightly more reasonable level of 10 cents per message, even though a one minute phone call costs the same (at least on T-Mobile, the last provider I checked).

Thankfully, rates have more or less held steady and wireless phone companies have begun actually giving more for less as technology allows. This could be largely in part due to T-Mobile, which jolted the industry a while back by getting the handset subsidy *out* of the monthly rate, and as a separate line item where it belonged to begin with. This is fairer to everyone, and has opened up the realistic possibility of buying unlocked phones from third parties (at least on GSM networks). Now, one can upgrade phones when one desires (and one’s finances allow), rather than being stuck in a never-ending series of two-year contracts. It also means if one really likes a phone, one can keep it until it literally wears out or falls apart.

Who knows what the next eight years will bring us?

A truly embarrassing truth for wireless phone companies

A recent story in the New York Times (which I learned about by way of an entry in Techblog) exposes quite a bit about how wireless carriers transmit text messages (SMS). These articles (the NYT article in particular) are good reads for the terminally curious. I’ll summarize the main points for those readers who lack the time, however:

  • Text messages ride the control channel, space normally used to control operation of the network (hence its name).
  • Thus, text messages cost very little, in fact almost nothing, for the wireless carriers to pass along.
  • The 160-character limit comes from the length of a call set-up message.

Now, combine these points (particularly the first two) with the fact that all wireless carriers which charge separately for text messages, have doubled the rate for casual use messages over the past three years ($0.20 now versus $0.10 before). If anything, this rate should have gone down with time, due to advances in technology, not up.

I have always smelled a very faint odor of bovine excrement even during the dime-a-message era. Something told me it can’t possibly cost the wireless carriers this much per message, even with an allowance for a reasonable profit margin. Turns out I had a pretty good hunch. Unfortunately it took the greed of the wireless carriers to turn the right heads (Senator Kohl) and trigger a closer look.

The profit margin today is anything but reasonable. This makes the long-distance rates of the AT&T monopoly era (often a full order of magnitude what they were after the deregulation of telephone long distance) look like the convenience store clerk keeping the penny when you’re owed change of $0.71 on a soda. If the phone companies were selling gasoline, we’d probably be up to $8/gallon, with station owners scrambling to prepare for an inevitable $10/gallon (most current signage only goes up to $9.999).

Am I going to cancel my text messaging plan? Of course not. I will, however, follow this closely and hope we at least get reform, if not some of the money back.

(All currency amounts are US dollars.)