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Mobile carriers are likely to start charging for OTT SMS messages

Wireless carriers claim that a texting number is their property.
By
September 18, 2014
texting sms

Over the last decade, SMS has been a huge cash cow for wireless carriers as it costs them virtually nothing to provide. Now that SMS is (and has been) dying off thanks to a variety of different applications, wireless carriers have resorted to a variety of tactics to keep money coming in since the SMS revenue stream has disappeared.

Wireless carriers will either jack up data rates or keep SMS options limited so that customers must pay more for them. For example, several years ago, AT&T eliminated a number of SMS options and instead left customers with the option of either paying $20 for unlimited text messages, or paying twenty cents per message (both directions). AT&T claimed this was “streamlining” while anyone else can see that this was fraud AT&T pushing people towards paying $20 for a service it costs AT&T virtually nothing to provide.

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Now Forbes shows us how carriers are going to approach SMS revenue going forward. Companies that offer free text messaging services (so called over-the-top or OTT carriers) are soon going to be charged by the wireless carriers.

Section 251(b) of the Communications Act of 1934 allows people to own their phone number. But who owns a texting phone number is a different story even though the texting number is the same as the phone number. Current law says nothing about texting so major wireless carriers are now claiming that the texting number is their property.

According to Forbes:

  • T-Mobile started trying to impose fees several weeks ago.
  • Sprint will start trying to charge next week.
  • Verizon in April shut off access to texting applications from their network claiming spam was an issue. Eventually, Verizon reversed course because it became public that only 2% of spam messages came from texting applications.

To be clear, carriers won’t start charging users for texts more than they already do. They will however charge companies that offer various SMS services, like Pinger, which lets you send free texts. Also, apps like Whatsapp or Viber, which use SMS for conveying messages to offline users, may also be affected.

What can the FCC do about this? Likely nothing. Texting is considered neither voice nor data service under the Communications Act. Therefore texting is unregulated and the carriers can charge whatever they want.

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Then there is the common practice of sending pictures through text messages.

Picture texting is another service, also unregulated by the FCC, and subject to its own set of carrier negotiations. If plain-text costs 3-12 cents, picture texting will cost more. Internet startups will die or be sold if these changes go through and presumably the carriers will pick up those businesses. This does not bode well for innovation. – Forbes

Maybe the wireless carriers will find new ways to cram customers out of a few more billion dollars?