AT&T's Text Message Racket

The huge array of great sites and business services that constantly pop up online like mushrooms after a rain prove just what human ingenuity and entrepreneurial spirit can accomplish in an open and free marketplace.

On the other hand, the cell phone market is a fine example of what you get when companies take steps to reduce competition and ensure they get a lock on their customers: an SMS data transfer charge of $1,310.72 per megabyte, according to some number-crunching from CrunchGear.

To arrive at that number, Nicholas Deleon starts with the .20 cents charged per message if you don't have a text message plan and multiplies it by the 160-byte max size of an SMS message. Crazy, huh?

The transfer rate of course becomes much cheaper if you sign up for a 200 or 1500 message plan, which costs $5 or $15 bucks, respectively. But even then the cost of traffic is out of whack. 

For example, let's say you have the $15 plan, and you somehow send your maximum 1500 messages a month (roughly 50 per day).  Let's also say each message is the max 160 characters, or 160 bytes.

That equals a total max of 240,000 bytes for $15.  Now imagine paying for Internet service that charges $15 to download a 234Kb file.

I won't pretend to know the details of the SMS network architecture, but I sincerely doubt the cost of its routers, switches and cables is so much greater than those used for other networks as to justify this cost. But the iPhone deal makes plain how they can get away with it. If you want Apple's hot toy, and you want to send text messages, you have no other choice. ¿ ¿ ¿ ¿ ¿ ¿ ¿ ¿ ¿ ¿ ¿ ¿ ¿ ¿ ¿ ¿ ¿ ¿ ¿ ¿ ¿ ¿ ¿ ¿ ¿ ¿ ¿ ¿ ¿ ¿ ¿ ¿