Our good friend
ltd posted a link to
this story in
The New York Times concerning how wireless carriers are essentially screwing over the consumer when it comes to the charge for text messages. While that point is more true than any carrier would like you to know, some of the details provided as a basis for this claim are incomplete.
But first, some nomenclature! The technical name for a text message is SMS (Short Message Service). It was designed and originally codified for use with GSM networks and devices during the 1980s. It consists of a short message, usually 160 total ASCII characters or less in length, transmitted between devices.
Another term thrown around is control channel. The control channel represents the very small piece of RF spectrum that is always active and serves as the, "always on" link between your device (usually a phone) and the network. All network information is transmitted over the control channel, including what RF channel to use and at which power setting to operate. Additionally, it is used to transmit paging messages, which is also why the control channel is often called the paging channel. Those page messages include alerts about incoming calls, outgoing calls from your device, incoming call waiting calls, network alerts, and other network/device communications. The other channel is called traffic channel, and is utilized when a call is made (either voice or data).
With that in mind, the central point of most of the articles published about this story is that SMS utilizes the control channel of the network, which does not require a traffic channel connection to be made that takes up valuable spectrum on a particular sector of a cell phone tower.
This point is flawed. Specifically, SMS messages are designed to roll over to the traffic channel any time the control channel is too busy to handle the additional traffic. This happens regularly in large cities during peak usage. Moreover, on non-US networks where the SMS size is greater than 160 characters, those messages are usually sent over a traffic channel. In CDMA, all devices have a setting that can force the device to send all SMS over the traffic channel if the carrier so chooses.
To be clear, most text messages are sent over the paging channel. But it is important to understand that SMS is not limited to use of the paging channel. The message must run through the SMS Concentrator (SMSC) and is then transmitted over wired networks, and often the Internet when sending messages from one network to the other. They are small, but they are utilizing network resources. And that does cost the carrier in terms of bandwidth and infrastructure. When that message has to be transmitted over the traffic channel, that message takes up a slot on that sector that cannot be used for other data calls or voice calls. That doesn't seem like a big issue when looking at a single sector, but if you weigh in the traffic on a national network, it does start to add up.
Now, carriers are of course screwing over the customer at any possible turn. Though the carriers do have some costs, the economies of scale they enjoy from a network infrastructure standpoint render those costs infinitesimal at best. So why have they doubled their rates over the last year? Simple: to pay for everything else.
Voice networks are not generating the revenue they used to. They used to make a lot of money off ringtones and pictures, and while that is still a viable market, it isn't what it used to be either. The real issue here is data usage. The amount of data used by subscribers is very significant, especially for EVDO Rev. A users on Verizon and Sprint. Both of those carriers have rolled out ridiculous limits on the service, such as Verizon's limit of 5GB per month for $60. Prior to these limits, they were virtually no gauges on data usage, and it was the same price. The huge margin they enjoy on SMS helped offset the loss of margin in voice and data services.
Another reason is that the consumer is willing to bear the cost of the service as offered. If people didn't use it, they would lower the cost, but text messaging is (lamentably) growing in popularity. That's a classic example of supply and demand at work.
Without a doubt, carriers are screwing over the consumer. They charge outrageous fees for services in order to maintain margins. That's right boys and girls, not revenue, but margins. The revenue continues to cover operational costs, but margin has been adversely impacted. A synonym for margin is profit.
They're all greedy jerkfaces. and I'm all for Congress investigating these companies for failing to compete, but the problem with that is that the only body we have responsible for this is Congress. I suppose time will tell, but I don't expect anything to come of it that favors the consumer. What say you?
