AT&T’s New Text Plan Overcharges You by 10,000,000 Percent. Literally.

Sam Biddle
Aug 18, 2011
http://gizmodo.com/5832245

AT&T's killing their $10/1,000 text plan. Now, you'll have to choose between $20 for unlimited, or forgo a plan and pay $0.20 per message. AT&T calls this "streamlining." We call it what it is: an outrageous, gigantic scam.

It's important to note, before considering anything SMS, that text messages are essentially free. Not for you, of course, but for companies like AT&T, Verizon, and Sprint. Unlike uploading a video to YouTube from your phone, which eats mobile bandwidth, text messages ride the same itsy bitsy communication channel your handset uses to check in with local towers to make sure it's turned on. Each text hitches a ride on an infinitesimally small data packet, chugging through traffic that would've been there anyway. For AT&T, it's basically a freebie—160 bytes of data. A trifle. Compared to the rest of what they're transmitting, AT&T's texts are like amoebas on the back of a tyrannosaurus.

For you, it's quite the opposite. For you, text messages cost money. A lot of money. How much money? Well that all depends. Starting next week, the only texting options for new AT&T subscribers will be a $20/month unlimited buffet, or paying per text, which is insane.

And here's why it's insane. Absolutely, skull-implodingly, village-razingly, jump-out-your-window-into-spikes insane.

AT&T offers a 2 gigabyte per month phone data plan for $25. By breaking this down, we can find out how much they think each text's worth of data costs. And according to this value, when you're using the same amount of data to send a text without a messaging plan, they're charging you 100,000 times more. Yes. Blink a few times and read that again. When AT&T calls data texting, it costs 100,000 times more than when it's in the form of photos, music, email, or anything else. They're ripping you off with the force of a nuclear bomb.

Here's how it breaks down:

AT&T charges $25 for 2 gigabytes of mobile data, which states how much they think their bits and bytes are worth. That comes out to 80 megabytes per dollar. 80 megabytes will get you 500,000 text messages—assuming you're writing the largest possible message, which you're often not (i.e. "Hey" "Nothing" "lol").

Now divide that dollar by the 500,000 potential texts. That comes out to $0.000002 per text—two ten thousandths of a cent. A very, very, very small amount of money.

Now, let's say you send 5,000 texts a month. That's a large, though wholly realistic number. Multiply that by the above worthless cost per text, and you've got—hold onto your wallet!—$0.01. A penny for five thousand texts, according to how much AT&T says its data is worth in a data plan.

But outside of the data plan? Oh boy! Things get very different very fast. And by very different, I mean inordinately overpriced. Those same 5,000 texts, at a rate of $0.20 per message, will cost you $1,000. Not a penny—a grand. Two very different prices for literally the exact same thing.

They're not alone—every other carrier charges similarly grotesque rates for texting without an SMS plan. The difference here is that AT&T's taken away new customers' option to spend less, whereas carriers like Verizon still offer tiered texting plans for varying budgets. (Though don't be surprised if they follow suit—AT&T's been leading the industry in its data/pricing, often in the worst ways.)

When the blue curtain's pulled back and you see the enormous money tree they're shaking, there's nothing to conclude but outrage. Texting messages are as costly to AT&T as blowing bubbles, but they sell them to you like they're vomiting molten gold.