MEF steps gingerly into VZW text-fee debate

The Mobile Entertainment Forum is interjecting itself into the debate over SMS aggregation fees, but it is doing so as delicately as possible. Rather than just condemning outright SMS termination rate increases proposed by Verizon Wireless, MEF leaders are proposing to sit down with VZW and other wireless operators to discuss fee increases that would allow carriers to recoup message delivery costs but wouldn’t price content providers and aggregators out of the market.

Earlier this month, Verizon Wireless saw a backlash of protest from content providers and SMS aggregator when a notice began circulating of a proposed 3-cent increase on all mobile terminated SMS transactions, which are used to deliver text alerts, mobile marketing messages and even premium content such as games and wallpapers. Verizon Wireless stated that it was only considering a fee increase and that while it was searching for a means to offset the significant costs it has incurred as the SMS alert traffic has grown dramatically in recent years its intention was to stimulate a business dialogue with its content partners.

A dialogue appears to be exactly what the MEF wants. “What we didn’t want to do was have a knee-jerk and pile on,” said Jim Beddows, chairman and president of MEF Americas. “If this is a pricing issue, we don’t want to get into a pricing issue debate.” But the fact remains that any fee increase could have a dramatic impact on the mobile growth of the content providers, aggregators and distributors that make up the MEF’s membership, Beddows said. The MEF wanted to ensure that wireless operators were made aware how any potential fee would affect their content partners, the SMS traffic on their network and ultimately the content that would be available to their customers. “We felt it would be worthwhile to be a part of this discussion,” Beddows said.

The MEF polled its membership to discover what the specific impact of a per-message fee on their services would be. Seventy-nine percent of the survey respondents said a fee increase would significantly impact their business, and 69% said such a fee would significantly increase their cost of service delivery. Half said a fee would force them to scale back messaging services over such an operator’s network, of which 36% said they would have to limit their services and 14% said they would have to curtail those services entirely. Finally 57% of respondents said that fee increases would have a negative impact on consumer choice.