Wednesday, July 09, 2008

Corporate greed: exposed by simple math 

Bell Mobility and Telus are pressing ahead with their plans to charge 15¢ per incoming text message for their pay-per-use cellphone customers.

The following is why schools should do a better job of teaching basic math skills.

First, Bell and Telus:

The companies say the phenomenal growth in popularity of text messaging - to 45.3 million daily today from 369,000 per day in 2002 - has increased costs on their networks to keep up with the demand.

So much for increased demand driving the price of a commodity down. But let's press on:

[W]ireless technology expert Ken Chase said he doesn't accept the rationale from Bell and Telus that the volume of text messages places great demands on the networks. The consultant with the Toronto-based firm Heavy Computing said that while 45.3 million text messages sent daily sounds like a lot, the amount of space this takes up on a network and related costs to a telecom company are minuscule.

A text message sent via mobile phone can be no more than 160 characters, and each character is about a byte. If 45 million text messages are sent throughout Canada every day and each message is about 100 characters, this totals 4.5 gigabytes. This amounts to about the same amount of gigabytes required to download two or three high-resolution movies from the Internet.

And in comparison to the cost of transmitting a voice call on cellphones, text messaging chews up far less space on a network. "For most cellphones, a voice call is five kilobytes a second to get an average quality call. That's the equivalent to 50 or 100 text messages," said Chase.

Chase pointed to a recent study by University of Leicester space scientist Nigel Bannister as a useful reference to show the proposed 15 cent fee is "absolutely ridiculous."

Bannister compared the cost of sending a text message with the cost of obtaining a megabyte of data from the Hubble Space Telescope. He calculated that if companies charged customers 10 cents per text message, that would translate into a cost of about $734 per megabyte, about 4.4 times higher than the 'most pessimistic' estimate for Hubble Space Telescope transmission costs (of $166 per megabyte)."

"Hubble is by no means a cheap mission, but the mobile phone text costs were pretty astronomical," Bannister concluded in his study.

The telecom companies have customers over the proverbial barrel: their contracts allow them to change terms at will, including adding new charges. If a customer wants to break its contract as a result, stiff penalties are imposed. Sweet.

Meanwhile, Industry Minister Jim Prentice is getting a tad fluttery about all this, as well he might. He's even suggesting the possibility of (gulp) regulation. A conservative is a liberal mugged by reality, so goes the right-wing cliché. Looks like it just could be the other way around.

(Crossposted from Dawg's Blawg)

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