Comments on: AT&T and Verizon deny price-fixing accusations

Company executives go to Capitol Hill to defend themselves against claims they have been colluding to fix prices on text messaging rates.

[drara07]

There is actually more than meets the eye. These companies charge 20c per message per person. So, the sender gets charged 20c, the receiver gets charged 20c. (considering both are on not on any text plans) Effectively, they make 40c per message of 160 bytes. this is totally outrageous.
And what are they lamenting about fierce competition. Isnt competition supposed to bring the rate down. Check out Asia and Europe where competition has bought down the rates. Also, In Asia and Europe, not only incomming messages but also incoming calls are free. Thats a huge plus point when you consider how much these compaies profit. We all end up paying twice for the same service.

[dilbert3k]

People keep getting this wrong, it is not $.20 per sms it is $.40. We pay to send and receive.
And their costs?

Customers on their level can buy 1 megabit of bandwidth from any Tier 1 provider for $10 a month.

A SMS is at most 160 bytes (1,280 bits)
So a 1 meg connection will carry 781 SMS messages per second assuming they are all full 160 bytes. That 1 meg connection will carry 2,025,000,000 SMS message per month, assume they buy 2x the bandwidth they need for peak time it is still 1,012,500,000 per month. Making a average cost per SMS of $0.000000009876543 (About 1/1 Millionth of 1 cent)

So yeah, the bandwidth is basically free.

As for the cost of sending the SMS to the telephone company? 100% Ever wonder why you are limited to 160 bytes? It happens to be the free space in the data packet the phone is already sending to the telephone company as a keep alive... I.E. they already count the cost into basic phone service.

So the only real cost is billing, with proper billing systems tracking each SMS call can cost a major player upwards of $0.00001 (1/1 thousandth of a cent)

But no... there is plenty of competition in the market sure in most countries around the world the price has been in free fall for ages and in many countries the price has fallen to a tiny fraction of a penny to send and FREE to receive.

Not that it matters, The telephone companies pay for our elected officials election campaigns. Your vote is worth about $0.50. Sorry to tell you this, but the person who wins a election is almost always he who has the most money... And the person that has the most money is the one who says yes sir and does whatever the corporations want. This will not change, some token gesture will be made to keep us quite... but in the end we will take it and go on.

Wish I knew how to fix the system, but I don't. For now all I can do is vote 3rd party and hope enough of my fellow Americans do as well. But I am not holding my breath.

[GabeRivera]

From what it looks like, based on Reardon's report, Sen. Herb Kohl either didn't do his homework or has a hidden agenda. I would look for lobby money coming from a smaller carrier who's feeling left out of the competion.

[JoeAyala]

An sms message is about 1 KB. So I sent 50 messages, for $10, I would use the grand total of 50kb. How you can have an unlimited data plan but have to pay for sms messages is beyond me.