Verizon's Proposed Double-Dip

Last week Verizon floated a proposal to begin charging $.03 for each SMS message sent to its subscribers from an application. Verizon has never been shy about maximizing their revenues (they led the charge in doubling the fee for sending and receiving SMS messages from $.10 to $.15 and then to $.20 in January and the other U.S. carriers quickly followed suit - meaning they have already doubled their revenues on a service that is no more expensive to provide than it was two years ago).

However, charging application providers is ultimately going to be bad for Verizon's bottom line. Applications that fire off SMS messages (be they one-time alerts or regular subscriptions) are already contributing an extra $.20 in revenue with every message they send. Carriers should be doing everything in their power to remove any and all barriers for these types of services, since they generate that many more $.20 charges billed to their contractually locked-in customers.

It does appear that this may have been a trial-balloon that is backfiring, especially when you consider that application providers would now be effectively paying a $30 CPM for each message, which is not trivial to make up (let alone surpass) with nascent mobile advertising.

Let's hope they come to their senses on this one - with more users switching to smartphones and Blackberries with push messaging running on unlimited data plans, this may speed the relegation of SMS to the historical footnotes of the industry alongside domestic roaming charges and long-distance fees.