Verizon Wireless Plans to Charge Senders of Text Messages - NYTimes.com

[David Farber <dave () farber net>]

Maybe it is time to stop this rip-off on SMS messages.  djf

October 11, 2008
Verizon Wireless Plans to Charge Companies Sending Text Messages
By SAUL HANSELL
Verizon Wireless this week told companies that send out text messages  
that starting Nov. 1 it will impose a fee of 3 cents for each message  
it delivers to the phones of its subscribers.

That fee is in addition to the fee of as much as 20 cents that those  
subscribers pay Verizon to receive the same message.

Text messages have become a popular way for companies to send bits of  
information to customers — sports scores, flight delays, bank balances  
or the latest updates from a social network.

The charge by Verizon Wireless, the nation’s second-largest cellphone  
service provider after AT&T, may prompt companies that have been  
working to tap into the texting boom to rethink their strategies. Many  
may simply stop sending messages to Verizon customers.

Steve Livingston, the director of marketing for mBlox, which processes  
text messages for companies including News Corporation’s MySpace  
social network and The New York Times, said the volume of messages it  
handles could fall by more than half.

“Alert services and social networks don’t work at three cents,” he said.

Jeffrey Nelson, a spokesman for Verizon, said the company was  
exploring ways to charge fees to commercial senders of text messages  
to add a new revenue stream to its wireless business.

“It is not a free service,” he said. “It didn’t cost us zero to build  
or to buy spectrum rights. What we do is we monetize those assets. It  
is why we created them.”

But Mr. Nelson said the company had not set any specific price for  
delivery of text messages or a date that any fee might go into effect.  
“There is nothing imminent, November first or any other date,” he said.

Mr. Livingston and Zaw Thet, the chief executive of 4Info, a company  
that sends messages on behalf of Yahoo and USA Today, said Verizon had  
sent them information that was much more specific than what Mr. Nelson  
described.

“We received a formal notification of a rate change,” Mr. Livingston  
said, adding that the short time frame would be disruptive for mBlox’s  
customers.

“We have a lot of companies that have been working on their fall  
marketing campaigns,” he said.

News of Verizon’s plans was first reported by the trade publication  
RCR Wireless News.

Both Mr. Livingston and Mr. Thet said Verizon was discussing  
alternative pricing schemes with big senders of text messages. And  
they said that some payment to the wireless carriers was appropriate,  
given the growth of text-message advertising.

“We want to find a way not just to create a toll but build the overall  
market together,” Mr. Thet said. “But in the short term, it means we  
will not be able to send content to Verizon customers.”


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