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About who and why, back in 1985. Didn't know someone had actually 'tested' the message length.
There is a technical aspect of the GSM encoding that most people doesn't know: It's just 140 bytes. In most encodings (the way computers represent text as 0 and 1) one character of the english language can be seen as a byte, this is because the 8 bits of the byte are used to represent 256 numbers that are mapped to letters, since there is less than 127 characters (leters and symbols) in the english alphabet, the GSM encoding use only 7 bits (less than a byte!) to represent the letters, and taking adventaje of those bits left it finds the way to have 20 more characters than bytes.
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This doesn't seem to jive with the generally accepted reasoning for the 160 character limit.

From Wikipedia:

The key idea for SMS was to use this telephony-optimized system and to transport messages on the signalling paths needed to control the telephony traffic during time periods when no signaling traffic existed. In this way unused resources in the system could be used to transport messages without additional cost. However, it was necessary to limit the length of the messages to 128 bytes (later improved to 160 characters), so that the messages could fit into the existing signaling formats. Therefore the service was named "Short Message Service"

I think that both this article and the Wikipedia article are correct.

The LA Times took the more human-centric approach to the story, which from a technical perspective was just 'how many and which characters can we cut out to maximize the 128 bytes available'. It also highlights the person (or the person who lead the team of people) who actually extended the SMS control channel to include text messages.

I think that overall the story told by the LA Times is probably a lot more interesting to its readers than the tech behind it.

This is addressed in the LA Times article; it jives almost exactly with Wikipedia's rendition. Hillebrand hit upon the idea of using the control channel. His team found room for 160 characters. There was a question about whether this was sufficient space and Hillebrand set about confirming it was.

A general take away is the value of the "sniff test". There's a tyrannical aspect to (what some would call) "common sense": it can squelch ideas that seem like they shouldn't work. And it's easy to scoff at the idea of a communications channel with a hard 160 character limit. Hillebrand sitting at a typewriter doesn't prove SMS will work. But it did show that it just might work and merits further investigation. Challenging presumptions may yield surprises.

This article makes me think back of my first venture I started with a friend of mine during university. We developed a j2me app which compressed the sms and allowed you to write roughly 400 characters within one sms while still only paying for one. Learned a lot on the way and will always think back of it as being my most exciting "course" at uni (In fact I'm thinking on how to revive it these days, but still very unsure).