[12621] in Commercialization & Privatization of the Internet
Re: The CMU Internet Billing Service
daemon@ATHENA.MIT.EDU (Paul Robinson)
Tue May 24 18:37:21 1994
Date: Tue, 24 May 1994 12:40:34 -0400 (EDT)
From: Paul Robinson <tdarcos@access.digex.net>
To: Karl Denninger <karl@mcs.com>
Cc: comp.org.eff.talk.usenet@decwrl.dec.com,
alt.politics.datahighway.usenet@decwrl.dec.com,
alt.internet.services.usenet@decwrl.dec.com, com-priv@psi.com
In-Reply-To: <m0q5oLH-000oCxC@venus.mcs.com>
On Mon, 23 May 1994, Karl Denninger wrote:
> > In article <0QhNu*rd0@fantasyfarm.com> bernie@fantasyfarm.com (Bernie
> > Cosell) wrote:
> > If you are paying for the size of the pipe you use, I suspect it does.
> >
> > : Look, there are two sides to the coin:
> > : 1) the net is VERY cheap [as far as bandwidth goes], in which case
> > : why are folk so up-in-arms about paying for the fair-share of
> > : that bandwidth they consume?
> >
> > Because every time a proposal has been made to reduce or eliminate the
> > classes of non-metered service in favor of metering (for example in
> > local telephone calls) a *few* people got *insignificant* reductions in
> > costs (like from $15.00 a month to $14.90), while *most* people paid a
> > little more and *some* people paid *a lot* more.
>
> You bet. Look at Ameritech here in Chicago. The quarter AFTER they
> got rid of their flat-rate pricing OPTIONS (you could always OPT for
> metered service here) I remember reading that they reported RECORD REVENUE.
>
> Now, they CLAIMED that the "average" user would see a rate decrease, and
> in fact probably still do.
>
> I couldn't find a SINGLE person among my associates for which this was
> true.
>
> I do know that MY phone bill went from ~$60/monthly to $500.00! For the
> SAME service! And I was nowhere near alone in this.
>
> IF, in fact, the AVERAGE bill went down then revenues MUST DECREASE.
>
> Remember, folks, its AVERAGES. Ie:
> number of subscribers * average bill = total revenue
>
> Therefore, they lied. Period.
>
Ameritech is exactly who I was referring to. They changed the PAK
structure to go from giving people a certain number of free calls outside
their local area to a supposedly less expensive system by allegedly
reducing rates on short-distance toll calls, which supposedly would
reduce people's costs. It didn't.
Whenever someone suggests changing a pricing system from unmetered to
metered on the grounds that it allegedly will save people money, then
it's time to look closely into _why_ it is being pushed.
For example, I started with unlimited phone service and had it for over
two years. Later I added a couple of phone lines, and then dropped one.
I discovered, based on MY historical calling paterns that I could switch
to the metered rate of 65 calls per month and save money that way.
The only reason it would work for me is that telephone call counts are
"coallocated" when placed on the same bill, e.g. that since I have 3
lines, I can make a total of 195 calls a month (3*65) and it doesn't
matter which phone those call units come from. Additional units are 9c each.
Now, if I go back to making a lot of phone calls (such as modem dialing),
then I might switch back to unlimited service because it would place a cap
on how much my phone calls cost from that line. So what it came down to
is that the phone company made more money off me when I had unlimited
service than when I have limited. (Unlimited Service is about $10 a line
more than measured). But only because it fits my conditions of traffic.
But I have yet to see a provider suggest a metered plan that would save
its customers money.
