Verizon rescinds decision to levy SMS fee hike Nov. 1

Verizon Wireless has told SMS aggregators it will not impose a new 3-cent transaction fee for every outbound SMS message sent to its subscriber base starting Nov. 1.

That charge from the nation's No. 2 wireless carrier would have either doubled or tripled the cost to marketers who send out SMS text messages to opted-in consumers who are subscribers of Verizon Wireless' mobile phone services. Verizon Wireless yesterday made its decision known to aggregators, leading to an email from OpenMarket to its customers.

Titled "Important notice: Verizon Wireless Transaction Fee Update," the email said, "Dear OpenMarket Customer:

"We wanted to keep you informed on the status of new messaging fees from Verizon Wireless.

"Verizon has communicated to us that the November 1, 2008 date for the $0.03 per message fee increase is no longer applicable. Verizon is continuing business discussions in regards to this critical issue. We will update you immediately as we receive additional information from Verizon.

"Sincerely,

"OpenMarket"

One of the leading SMS aggregators, OpenMarket is a unit of Amdocs.

The latest decision from Verizon Wireless is the result of pressure and pushback from a mobile marketing industry alarmed at the arbitrary increase in SMS rates for opted-in text messages to the carrier's customers.

This publication first broke news Oct. 9 afternoon of Verizon Wireless' plans to go ahead with the 3-cent rate increase starting Nov. 1 (see story). It immediately led to an uproar, not only within the mobile industry but also in the media.

Cold comfort
Still, the Verizon Wireless decision not to implement the rate hike next month is little solace to Tim Miller, president of mobile marketing services firm Sumotext Inc., Little Rock, AR. He is one of the leading voices on the hike's disastrous consequences for the mobile industry.

"Don't get me wrong," Mr. Miller said. "This is wonderful news. But it doesn't feel like a pardon -- more like a stay of execution.

"The carriers have to do something about the instability the Verizon test balloon has created," he said. "Businesses need to predict the future if they are expected to make investments. That applies to aggregators, application providers and, ultimately, the content providers.

"We've already had one of our largest clients not sign a contract extension that was due this week. They simply weren't comfortable with committing to unpredictable cost structures.

"Verizon's retraction statement made it sound as though short code programs were responsible for the 'billions upon billions' of text messages.

"Let's face it -- SMS via short codes is less than 1 percent of Verizon's monthly text message traffic. Sorry, but those of us doing things the right way via compliant short codes aren't that successful -- at least not yet.

"Frankly, it's now time for every wireless carrier to come out and introduce some stability to the ecosystem. Beyond pricing, they need to publish ultra-clear rules for compliance and appoint an independent group like Nielsen to audit all of the programs on all of the short codes.

"Above all, they need to finally publish a clear statement on the 1-to-Many use of their SMTP gateways. It's just not right to make the good guys pay while the bad guys continue to send free text message spam via their exposed email servers.

"If you ask me, you shouldn't be allowed to even apply for a short code without signing a binding statement to never send text messages via SMTP.

"If the carriers want to clean up the channel and make money from application providers and content providers -- not just consumers -- in the process, then a good first start would be to cut off the SMTP servers and get everyone paying their fair share to the aggregators and the CSCA."