I'm actually working on the handset side of this, so I can answer some of the questions people have about it.
It's really not that complicated of a system. It uses Cell Broadcast Services (CBS) which are part of the existing 3GPP and 3GPP2 standards. Some of you may have seen CBS applications in your phones, but they're typically not used in the U.S. CBS is, as its name implies, a broadcast service.. so obviously it's one-way only. If your phone isn't "subscribed" to the particular message identifier (a kind of topic or category), or your phone isn't on when the message is broadcast, you'll miss it. The system has different classifications for messages, from nationwide alerts, to local alerts (like hurricanes), to AMBER alerts. There can't really be any way for operators to charge for broadcast messages, any more than they can charge for other broadcast resources like paging channels, so I think the only way your bill would be affected would be if they do some blanket 10 cent "government" fee for everyone... By the way, the reason they are using CBS is because it does not place a strain on the network, like sending millions of SMS messages at once would (that's important in a disaster situation when people might be overloading the network).
The special handling on the handset side is to take some specific actions when an emergency message is received.. it has to play a special tone and vibration, among other things. You can opt-out of pretty much all messages, so don't get too worried about being woken up in the middle of the night for AMBER alerts (well, unless you want to receive them). The system supports a monthly test message, but you wouldn't be opted-in to those by default.
The nature of the cell network allows operators to broadcast the messages to specific cells, so you are not going to get alerts for things happening elsewhere in the country. But the design also allows for national (presidential-level) distribution, so yes, in those cases, everybody would get the alert. The network-side of things is more interesting than the handset side, because of how different levels of the government need to be able to send alerts, and this is mostly what the article talks about (although it's short on details).
If you have other questions, reply and I can try to answer them.