[1422] in Commercialization & Privatization of the Internet
Re: Volume-sensitive charging
daemon@ATHENA.MIT.EDU (Kent W. England)
Mon Sep 30 18:26:43 1991
From: "Kent W. England" <kwe2@BBN.COM>
To: bzs@world.std.com
Cc: com-priv@psi.com
In-Reply-To: <9109301947.AA26941@world.std.com>
Date: Mon, 30 Sep 91 18:24:28 EDT
>
>I was just reading in Network World or one of those where MCI was
>offering a new usage-sensitive service into a formerly flat-rate
>market (not TCP/IP, I'm only commenting on the pricing scheme here) to
>lure new customers with a lower minimum price. The guarantee was "not
>to exceed 120% of the full flat-rate price".
>
>This seems rather clever, reactions?
>
> -Barry Shein
>
That's an interesting gambit. As I have noted before, there is risk on
both sides when trying usage-sensitive pricing, since the cost of
connectivity is fairly traffic insensitive. MCI could lose its shirt,
if the customers don't live up to MCI's market projections.
I was looking at my bank's credit card offerings yesterday. They offer
four different VISA cards. The differences among the cards all have to
do with the annual fee and the interest rate. As the interest rate
drops, the annual fee goes up. Isn't this the same game?
--Kent
