The Cost of Texting Doesn't Add Up

June 16, 2009— -- Some 3.3 trillion text messages will wing their way around the world this year. That's a 600 percent increase since 2007.

Texting is a lifeline for young people, and a goldmine for cell phone companies. Why? Text messages are tiny. A one-minute phone call uses up the same amount of network capacity as 600 text messages. However, the phone call costs an average of 15 cents, whereas if you pay on a per text basis, those text messages would cost $120.

Lena Dangerfield, 14, of Atlanta estimates that she sends as many as 100 text messages some days.

"I don't really think about how much it costs because I don't get the bills," she said.

The family's cell phone bills tripled when she went from just talking to texting. Her parents tried to get her to cut back, but then fled to an unlimited texting plan to avoid nasty surprises.

Today in Washington, D.C., senators grilled the wireless industry about how much it costs to transmit text messages, versus how companies are charging consumers. One researcher who testified before the Senate committee today estimated it costs wireless providers 3 tenths of one cent to transmit a text.

Consumer advocates are livid. The major cell phone carriers all raised their per-text price within months of each other to 20 cents -- quadruple what they charged just four years ago.

"This is a head scratcher to consumers because these rising costs are not at all related to the pricing incurred by the carrier," said Joel Kelsey of Consumers Union.

The cellular industry counters that texting bundle plans have gone down 60 percent in price in recent years and most consumers choose bundles.

It's a free market economy, but texts are transmitted over public airwaves. So, senators have to decide whether there's a way to raise competition or lower prices.