[1324] in Commercialization & Privatization of the Internet
Re: my need for usage-based charging
daemon@ATHENA.MIT.EDU (Erik E. Fair" (Your Friendly Postm)
Tue Sep 10 20:42:23 1991
From: "Erik E. Fair" (Your Friendly Postmaster) <fair@apple.com>
In-Reply-To: <9109102006.AA14649@volitans.morningstar.com>
To: Bob Sutterfield <bob@MorningStar.Com>
Cc: com-priv@uu.psi.com
Date: Tue, 10 Sep 91 17:39:22 -0700
Bob,
We both make assumptions about pricing when we talk about
usage priced, versus fixed price communications service delivery.
It sounds like your assumption is that for the amount of the service
that your firm would use, the hypothetical usage based price would be
lower (en toto) than existing fixed priced IP services that you have
been quoted.
My objections to usage based pricing (strictly aside from the general
lack of budgetary predictability) stem from my experiences with usage
priced services. I have found that when usaged priced services are
contrasted with equivalent fixed priced services (where such exist),
the break even point that makes fixed priced service more economical is
so low that I believe it is best to avoid the usage priced services in
the first place, to avoid the extensively documented pain and suffering
that they cause (stifled experimentation, tracking your usage to check
the bill, beancounters from hell, etc).
If a usage-priced IP service shows up that is cheaper to buy than what
I now get for fixed price, when I budget for the maximum possible use,
then I'll buy it - I'm not stupid. However, neither are the carriers;
I don't think that they will ever offer a usage-priced IP service with
economics like that, unless there something predatory going on. The
interesting part of the existing game is that everyone is using the
same bit pipes, and we know what those cost. The rest of the costs are
overhead and cost of what ever value the service provider is adding to
the bit pipes.
And who knows? If you can track and control your usage carefully enough
to stay shy of the break even point, then a usage priced services does
make sense for you. I don't have that much control over my user
community, and I'd much rather not worry about it.
Erik E. Fair apple!fair fair@apple.com
