[1977] in Commercialization & Privatization of the Internet
re: ANS Pricing Model
daemon@ATHENA.MIT.EDU (Jeff Bone)
Tue Jan 14 15:01:48 1992
Date: Tue, 14 Jan 92 11:56:16 PST
From: Jeff.Bone@EBay.Sun.COM (Jeff Bone)
To: almes@ans.net
Cc: com-priv@psi.com
In response to Guy Almes:
Thanks for your reply... I guess I'm still not sure I understand how the
incremental fees allow you to "lower the data pipe capacity fees". Again,
if I were a midlevel, I would much rather pay for the size of my data pipe
than forward funds to you every time I got a new client signed up. And
this feeling is representative of the general attitude in the numerous
responses I received to my message (many from the very mid-levels in
question!) Why should your revenue growth stem directly from the growth
of your customers? Charge for your *service* (bandwidth onto the backbone).
Nonetheless, I do feel somewhat better about ANS' flexibility in this
matter; I *really* urge you to look at the definition of "midlevel",
the range of service you are trying to ultimately provide, and the
cost the "end user" is going to have to absorb in an incremental fee model
and a raw pipe capacity model*.
Yrs,
JB
*note, I'm not advocating "pay for usage", I'm advocating flat fees for
bandwidth X, and I'm advocating this as a pricing model consistant through-
out the service hierarchy: home customers pay a minimal flat fee for, say,
19.2Kbaud to a "midlevel", while the big midlevels pay $$$ for, say, several
T1's onto the backbone. Perhaps those who do connect to the backbone pay
an initial connection fee and/or and annual "backbone surcharge", but the
pricing structure throughout the system is a flat capacity-based fee.
This also levels the competitive playing field by doing away with this
rather arbitrary notion of "mid-level"; anyone is free to be a midlevel,
with whatever capacity (onto the backbone) is necessary to service their
clients. Then there are those who buy backbone connectivity, and those who
buy connectivity from someone who buys backbone connectivity, ad infinitum.
Bandwidth goes down as you get away from the backbone (as does efficiency),
and so does price.
