[101858] in North American Network Operators' Group
RE: An Attempt at Economically Rational Pricing: Time Warner Trial
daemon@ATHENA.MIT.EDU (Frank Bulk - iNAME)
Sat Jan 19 21:44:16 2008
Reply-To: <frnkblk@iname.com>
From: "Frank Bulk - iNAME" <frnkblk@iname.com>
To: "'Rod Beck'" <Rod.Beck@hiberniaatlantic.com>,
"Scott McGrath" <mcgrath@fas.harvard.edu>,
"Rod Beck" <roderickbeck@tmo.blackberry.net>
Cc: <owner-nanog@merit.edu>, "Patrick W. Gilmore" <patrick@ianai.net>,
<nanog@merit.edu>
In-Reply-To: <71CB284A12EDA54880FF588A8BAC0BE20E4D98@ernie.HiberniaAtlantic.local>
Date: Sat, 19 Jan 2008 20:43:02 -0600
Errors-To: owner-nanog@merit.edu
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Except if the cable companies want to get rid of the 5% of heavy users, they
can't raise the prices for that 5% and recover their costs. The MSOs want
it win-win: they'll bring prices for metered access slightly lower than
"unlimited" access, making it attractive for a large segment of the user
base (say, 80%), and slowly raise the unlimited pricing for the 15 to 20%
that want that service, such that at the end of the day, the costs are less
AND the revenue is greater.
Frank
From: owner-nanog@merit.edu [mailto:owner-nanog@merit.edu] On Behalf Of Rod
Beck
Sent: Saturday, January 19, 2008 2:25 PM
To: Scott McGrath; Rod Beck
Cc: owner-nanog@merit.edu; Patrick W. Gilmore; nanog@merit.edu
Subject: RE: An Attempt at Economically Rational Pricing: Time Warner Trial
If service is metered, it doesn't imply 25 cents a minute. It would probably
be based on bytes transferred and would probably be less expensive for the
bulk of users than the current flat rate pricing. If the cable companies are
telling the truth, roughly 5% of their customers generate 50% of the
traffic. That implies that the bulk of users are effectively subsidising the
five percent of heavy users.
So any sort of well crafted usage-based pricing, would lower the amount paid
by the vast majority of users and raise it dramatically for the five percent
of heavy users.
Usage-based pricing would give the cable companies and telephony incumbents
an incentive to upgrade infrastructure and actually compete for the heavy
users. The heavy users would be the most profitable customers. New
technologies would be welcomed instead of discouraged.
Ironically, the Net Neutrality debate is about the access providers trying
to impose usage-based pricing through the backdor - on the content
providers. It goes without saying I oppose it. It's the end users who decide
what they view and hence ultimately generate the traffic flows. So the end
users should be subject to the usage-based pricing.
Regards,
Roderick S. Beck
Director of European Sales
Hibernia Atlantic
1, Passage du Chantier, 75012 Paris
http://www.hiberniaatlantic.com
Wireless: 1-212-444-8829.
Landline: 33-1-4346-3209.
French Wireless: 33-6-14-33-48-97.
AOL Messenger: GlobalBandwidth
rod.beck@hiberniaatlantic.com
rodbeck@erols.com
``Unthinking respect for authority is the greatest enemy of truth.'' Albert
Einstein.
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<p class=3DMsoNormal><span =
style=3D'font-size:10.0pt;font-family:"Tahoma","sans-serif";
color:#1F497D'>Except if the cable companies want to get rid of the 5% =
of heavy
users, they can’t raise the prices for that 5% and recover their =
costs.
The MSOs want it win-win: they’ll bring prices for metered access =
slightly
lower than “unlimited” access, making it attractive for a =
large
segment of the user base (say, 80%), and slowly raise the unlimited =
pricing for
the 15 to 20% that want that service, such that at the end of the day, =
the
costs are less AND the revenue is greater.<o:p></o:p></span></p>
<p class=3DMsoNormal><span =
style=3D'font-size:10.0pt;font-family:"Tahoma","sans-serif";
color:#1F497D'><o:p> </o:p></span></p>
<p class=3DMsoNormal><span =
style=3D'font-size:10.0pt;font-family:"Tahoma","sans-serif";
color:#1F497D'>Frank<o:p></o:p></span></p>
<p class=3DMsoNormal><span =
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color:#1F497D'><o:p> </o:p></span></p>
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<p class=3DMsoNormal><b><span =
style=3D'font-size:10.0pt;font-family:"Tahoma","sans-serif"'>From:</span>=
</b><span
style=3D'font-size:10.0pt;font-family:"Tahoma","sans-serif"'>
owner-nanog@merit.edu [mailto:owner-nanog@merit.edu] <b>On Behalf Of =
</b>Rod
Beck<br>
<b>Sent:</b> Saturday, January 19, 2008 2:25 PM<br>
<b>To:</b> Scott McGrath; Rod Beck<br>
<b>Cc:</b> owner-nanog@merit.edu; Patrick W. Gilmore; =
nanog@merit.edu<br>
<b>Subject:</b> RE: An Attempt at Economically Rational Pricing: Time =
Warner
Trial<o:p></o:p></span></p>
</div>
</div>
<p class=3DMsoNormal><o:p> </o:p></p>
<p style=3D'margin-bottom:12.0pt'><span style=3D'font-size:10.0pt'>If =
service is
metered, it doesn't imply 25 cents a minute. It would probably be based =
on
bytes transferred and would probably be less expensive for the bulk of =
users
than the current flat rate pricing. If the cable companies are telling =
the
truth, roughly 5% of their customers generate 50% of the traffic. That =
implies
that the bulk of users are effectively subsidising the five percent of =
heavy
users.<br>
<br>
So any sort of well crafted usage-based pricing, would lower the amount =
paid by
the vast majority of users and raise it dramatically for the five =
percent of
heavy users.<br>
<br>
Usage-based pricing would give the cable companies and telephony =
incumbents an
incentive to upgrade infrastructure and actually compete for the heavy =
users.
The heavy users would be the most profitable customers. New technologies =
would
be welcomed instead of discouraged.<br>
<br>
Ironically, the Net Neutrality debate is about the access providers =
trying to
impose usage-based pricing through the backdor - on the content =
providers. It
goes without saying I oppose it. It's the end users who decide what they =
view
and hence ultimately generate the traffic flows. So the end users should =
be
subject to the usage-based pricing.<br>
<br>
Regards,<br>
<br>
Roderick S. Beck<br>
Director of European Sales<br>
Hibernia Atlantic<br>
1, Passage du Chantier, 75012 Paris<br>
<a =
href=3D"http://www.hiberniaatlantic.com">http://www.hiberniaatlantic.com<=
/a><br>
Wireless: 1-212-444-8829.<br>
Landline: 33-1-4346-3209.<br>
French Wireless: 33-6-14-33-48-97.<br>
AOL Messenger: GlobalBandwidth<br>
rod.beck@hiberniaatlantic.com<br>
rodbeck@erols.com<br>
``Unthinking respect for authority is the greatest enemy of truth.'' =
Albert
Einstein.</span><o:p></o:p></p>
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