Verizon Wireless to charge content vendors 3-cent fee for text messages
Google, 4INFO, others to face charges beginning Nov. 1
October 9 2008 - 2:20 pm ET | Colin Gibbs | RCR Wireless News
Verizon Wireless is alerting content vendors of its new charges. (See letter below.)
In a move that sets a new and potentially major precedent in the text messaging services market, content and messaging companies are going to have to cough up some dough if they want to deliver their goodies to Verizon Wireless customers.
The nation’s No. 2 carrier has informed partners that it will add a 3-cent fee for every MT (mobile terminated) message processed on its network beginning Nov. 1. MT messages typically include text alerts, interactive voting notifications and SMS search responses.
The fee is in addition to current MT-messaging fees, which typically cost the sender anywhere from a fraction of a penny to a few cents. The new charge applies to both standard-rate and premium programs, according to the e-mail notification (see below), but not to text-giving or free-to-end-user campaigns. (Free-to-end-user refers to any text campaign where the sender absorbs all the costs and the customer is not charged for receiving the message. Such campaigns have yet to be widely deployed in the United States.) The move is sure to spark outrage among a host of players in the space who use MT messages to deliver text-search results, provide real-time news and sports updates or deliver horoscopes or other information.
Countless companies could be affected by the new fee, from players in the booming SMS-search space (4INFO, Google Inc. and ChaCha) to media companies (CNN, ESPN and local outlets) to mobile-couponing startups (Cellfire) to banks and other institutions that use mobile as an extension of customer services. The new fee could even impact the political arena, where high-profile candidates such as Barack Obama are using text messaging to woo voters and keep supporters informed.
Click here for vendors' reactions.
Verizon Wireless representative Brenda Raney said the new fee was necessary to cover the carrier’s overhead in delivering MT messages.
“Just like any business, we reassess our charges to make sure they align with our costs for providing the service and sometimes it becomes necessary to make adjustments,” Raney said via e-mail. “In this instance, this is the first increase the company has implemented since the service began in 2003.”
The notice was distributed by OpenMarket, the Seattle-based division of Amdocs Ltd. that handles billing issues for Verizon Wireless, Sprint Nextel Corp. and others. OpenMarket earlier this year informed Sprint Nextel partners that the carrier would be “strictly enforcing” new revenue-share penalties for vendors who violate Mobile Marketing Association guidelines.
The news comes on the heels of antitrust concerns and class-action lawsuits over the rising cost to wireless users for sending text messages. Verizon Wireless and other carriers have over the past several years increased from 10 cents to 20 cents the cost of sending text messages, which caused Senate Judiciary antitrust subcommittee Chairman Herb Kohl’s (D-Wis.) to raise concerns over the issue. The situation has also given rise to more than a half dozen class-action lawsuits on the topic.
October 13, 2008 06:01 am
HI, why don't all services start a 30 day ban - when advertising their services just say " works on all systems but Verizon".... I bet that woul get attention...
October 11, 2008 05:59 am
THIS is why Google is bidding on spectrum and lobbying the FCC to open it up! They see the future of wireless in America as having further extortion from the wireless companies that be unless new players are able to enter and shake things up. This country already has the WORST telecom service of any developed nation and what's more we pay MUCH MORE for it. We have the slower Internet connections that Japan and most of Europe on our hardlines and on wireless, and we pay about twice as much, if I recall correctly. I've never understood why it costs money to send/receive SMS but email is FREE!!!This just sounds like a great reason to support companies like Google to push the FCC for change, so that they stop the goodole boy thing they have going on with the wireless companies. (Sure, Google stands to save a buck or two, but at least they are working to save us the CONSUMERS a buck or two at the same time!) It's also a good opportunity for us the consumers to stick it to the wireless companies and show we're wise to them by using EMAIL instead of SMS/MMS if at all possible.I'm thankful to have an iPhone and be an AT&T customer, even though that means I use airtime to call the huge amount of customers on Verizon, which dominates the market I'm in (Cleveland, OH) and often has better coverage.Thanks to the Times for clueing us in on this!
October 10, 2008 04:23 pm
QUOTE: "Verizon Wireless and other carriers have over the past several years increased from 10 cents to 20 cents the cost of sending text messages,..."How soon they forget... On Verizon's network, sending messages used to cost $0.02 and receiving messages was FREE. The first price increase on messaging that I remember was to $0.10 to send and $0.10 to receive, and is now $0.20/$0.20. On average the price to send has increased 33% per year! With the cost of technology always heading down, there is no reason for these usurious fees.-JJ
October 10, 2008 04:23 pm
They do realize that schools use txt msgs to alert students of all kinds of things from closings to emergency situations the students need to be aware of... right?
October 10, 2008 12:42 pm
The comment that this only affects CTIA,& MMA compliant firms is 100% right. Why the carriers have left the Spam SMTP gateway open is unthinkable. I hope that mobile app providers will start routing SMS traffic on Verizon through the SMTP gateway for all of their customers. The law of unintended consequences will certainly be the case here. By trying to make more money they are going to force people to use the backdoor where they make nothing. Way to go.
October 10, 2008 06:01 am
It sounds like this is mainly focusing on the premium txt services that customers keep getting signed up for. A lot of people are unknowingly getting subscribed to similar services and contacting Verizon for adjustment credits, even though the charges aren't from Verizon. Verizon is currently involved in several lawsuits against some premium text srevices and customers that are blaiming Verizon for this issue. It also states that Free-2-End user and non-profit texts do not get billed.
October 10, 2008 06:00 am
Great... another reason to go with AT&T...
October 10, 2008 06:00 am
As a Twitter addict (@davemora) I use at least 2,000 messages alone on twitter alone from @ replies and DM and regular tweets. How, does this affect services like twitter ? Will they be force to pass that cost down to us. Hopefully is just Verizon as I use ATT.
October 10, 2008 06:00 am
Where is MMA? Why are you not standing up to this nonsense in the support for the majority of your members?At this rate MMAs member list will be rapidly decreasing...
October 10, 2008 06:00 am
This new fee is directed at those that are in compliance with FCC, CTIA and MMA rules, regulations, best practices and the new Code of Conduct. Those that use mobile email, the public gateway or the url portals are not subject to this fee, because they use unregulated and uncontrolled access points. The larger Text-SPAM producers, the cause behind the class action lawsuits go untouched by this new fee. Those that communicate through provisioned and audited short codes will be hit with these new fees. We used to call that, biting the hands that feeds you.