Industry Update | New Verizon A2P SMS Product and Surcharge

Changes for application-to-person messaging from 10-digit long codes to the Verizon network

By Erik Lagerway, VP of Product

***UPDATE - Feb. 5, 2020

As reported below, (Sept. 2019), the CTIA had published new guidelines with respect to A2P (Application to Person) and P2P (Person to Person) text messaging. These guidelines prohibit A2P messages on any P2P channels.  

Verizon has announced that effective Feb. 1, 2020 they will be mandating all 10DLC A2P traffic terminating on their network to flow over this new A2P channel. These messages will incur an additional fee of $0.0025 per SMS and $0.005 per MMS.

This product applies only to messages traversing Verizon’s network, and other carriers have yet to implement similar channels. It does not represent an end-to-end A2P messaging solution and utilizing it would add both complexity and cost that will not benefit our customers.

For these reasons we do not feel that Verizon’s new 10DLC A2P product provides a complete solution for our customers, and therefore will not be routing any of our customers A2P traffic through this channel.

There is a greater benefit for our customers to continue utilizing Toll-Free or Short Code numbers for A2P messaging. SignalWire’s Toll-Free messaging is cost-competitive, provides complete carrier coverage, higher throughput, and a more professional brand impression.

We are here to fight for our customers and to bring you the best solutions at industry-leading pricing, not to undermine customer efforts with more fees and what we consider poorly laid plans.

With that being said, we will not be adjusting our A2P or P2P rates, nor will we be changing our position with A2P messaging in mind. We will continue to serve our customers with Toll-Free A2P and Short Code A2P messaging services. 10DLC A2P products will follow if and when a complete solution becomes available.

***Original Post Below -

Industry Update

Several US Carriers are preparing to launch new A2P (application-to-person) 10DLC (10-digit long code) products in May 2019. One of the carriers that has been quick to move on that initiative is Verizon. Verizon has already rolled out its 10DLC product and has mandated that SMS aggregators sending A2P traffic (basically, anything that is not sent by a human) to stop using P2P (person-to-person) channels for that content.

In the months that follow, A2P traffic that continues to flow over P2P channels will be subject to much higher levels of scrutiny. Firewalls and machine-learning algorithms will make short work of that traffic. Consequently, delivery rates will fall dramatically. Traffic on Verizon's new A2P 10DLC service will be subject to a $0.0025 per-message termination surcharge.

What it means to SignalWire customers

SignalWire has already moved all SMS traffic to the A2P channel / bind for Verizon, effective May 1, 2019. SignalWire will give our customers one month notice before we begin passing these new surcharges on to our customers. Details on that notice and how fees are applied to SMS transactions will follow in the coming weeks. For now, customers can take advantage of our new A2P bind with our regular low rates, as follows:

Messaging Rates

US Inbound - FREE*
US Outbound - $0.0009*

Why are carriers doing this?

According to the carriers, businesses and messaging service providers providing marketing, 2FA, and other commercial services over their networks needed better reliability, stability, delivery, and security. The P2P services provided by carriers to service providers were never meant to handle the demands of this type of traffic. Now, A2P traffic has a sanctioned home in the carrier network.

Toll Free

In the US, the surcharges do not apply to toll-free messaging, making this a viable option for customers looking for an alternative to 10DLC. In Canada, the surcharge applies to both regular long code and toll-free messaging.

Short Codes

Other messaging services under review are shared short codes, or shared CSC (Common Short Code). Shared short codes present a higher level of spam risk. Since they are shared between businesses, it is harder to pinpoint bad actors. AT&T has already narrowed its CSC offer to include emergency notifications, 2FA / OTP, transit alerts, job postings (if the message sender is doing the hiring), and charities.

Dedicated short codes would also be an alternative for businesses that require 1-way solutions that come with better carrier support, higher throughput, and dedicated use. That said, 10DLC numbers are faster to provision, have lower monthly costs, and are also sanctioned by the carrier networks.

Final Thoughts

This is only the beginning. Other carriers are also making similar moves. AT&T has made it clear they intend to follow suit in August with their own surcharge. Most of the Canadian carriers have already levied similar fees.

One of the justifications for carriers treating A2P traffic differently from P2P (read: charging more) is to discourage SMS marketing spam. This is understandable - nobody likes spam. It goes without saying, however, that not all A2P traffic is spam. At SignalWire, empowering our customers is paramount, and we worry that penalizing all A2P traffic with additional fees may have an adverse effect on companies building innovative products with the potential for great societal benefit. We will watch this space closely and keep you updated on any new advancements.

We sincerely regret having to notify our customers of any new fees. Regardless of what happens in the industry, SignalWire is committed to offering the absolute lowest possible rates for essential carrier services. We see unnecessary cost as a barrier to innovation, and helping our community overcome such barriers is and has always been our primary mission. We are here to help you find the best solution going forward - if you are uncertain on how to proceed, do not hesitate to reach out to your friendly neighborhood SignalWire expert.

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