In response to Verizon's proposed $.03 SMS increase, Mobile Entertainment Forum Americas is looking to play a constructive role and is reaching out to its member base and other constituencies across the industry to open a dialogue.

While acknowledging the right of Verizon Wireless to charge whatever sum is reasonable for the service it provides in delivering text messages to consumers' handsets, MEF hopes to foster a productive outcome that will be acceptable to all members of the business ecosystem.

"We urge Verizon Wireless to reconsider the timing, scale and terms of its proposed fee increase," said Jim Beddows, chairman of MEF Americas. "The industry is ready to engage with Verizon Wireless to help find a solution that meets their objectives, without suddenly negatively impacting the businesses of so many companies in the mobile entertainment industry at this delicate moment."

Last week Verizon Wireless announced a $.03 increase fee for all mobile terminated text messages delivered across its network.

Many industry members, who provide mobile content and entertainment services, expressed concern over this announcement.

"I completely oppose the rate increase, between the money that mobile carriers are already charging for SMS it makes no sense to charge these additional fees," said Bruce Stenberg, CEO at Event Objects LLC, Philadelphia, PA.

There was quite an uproar in the industry regarding Verizon's proposed rate increase (see story).

There were a few executives who took the news lightly, however.

"We use text messaging as a way to alert voters of upcoming deadlines and to find their polling place locations," said Brian Newby, election commissioner for Johnson County, Kansas, Kansas City, MI. "In my small world (360,000 registered voters), a three-cent surcharge isn't outrageous in the aggregate, but could approach a few thousand dollars a year with greater adoption.

"Because those are tax dollars spent with no added value, I do think that's wrong," he said. "If this happens, we will make sure Verizon users know of this charge to their government and I imagine knowing that will cause some citizens to opt out of the service.

"Personally, I feel this just feels like an added ATM charge and I think text users pay for the ability to receive calls and messages in the rates they already pay," he said. "If text messaging to voters becomes more prominent, nationwide, the impact would be large and might impede adoption of a communication vehicle that facilitates a very important government function. "

But most industry executives viewed this move by Verizion as potentially damaging to their businesses as well as the premium and standard rate messaging business ecosystem as a whole.

Then on Monday, Oct. 13, Verizon clarified its position as a proposal, and cited the reasoning to offset increasingly higher costs of delivery of text messages they incur each month (see story).

MEF has polled its members operating in the United States and 50 percent of the respondents have indicated that the proposed fee increase would cause them to limit or curtail their current businesses related to text messaging and 57 percent indicated that they felt consumer choice would be significantly impacted.

"The US carriers really need to be careful because mobile marketing business models are new and fragile," said David Hepner, vice president of business development at 2du Media, Charleston, SC. "Constant price structure changes, changes to message requirements, and absurd short code pricing are hurting innovation."

Businesses potentially impacted include free-to-consumer, ad supported content; premium content (games, video, ring tones and wall paper; mobile widgets), alerts, text- based services such as horoscopes; mobile marketing campaigns; SMS voting for TV reality shows; and information services.

The MEF's role in the industry is to accelerate the growth of the mobile entertainment industry by being the voice of mobile entertainment and champion of a positive consumer experience to industry, government, academia and media.

The worst part of all of this is that although at first glance this does not affect consumers, it does.

"When Verizon's increased message fee kicks in, the content providers who choose to continue delivering messages to Verizon customers will have no choice but to pass those increased costs on to consumers," said Mehan Jayasuriya in his Public Knowledge blog post.

"Sure, $0.03 might not sound like a lot of money on paper," Mr. Jayasuriya said. "But when you consider the volume of SMS messages that mobile service providers send on a daily basis, that increase of a few cents per message could prove prohibitive for providers of all but the most lucrative services.

"And considering that some of the most popular SMS-based services are free -- for example, Twitter and Google Search -- this increase could have a devastating effect on the market."