[2455] in Commercialization & Privatization of the Internet
Billing philosophy, World, and user studies
daemon@ATHENA.MIT.EDU (Barry Shein)
Sat Feb 29 13:53:51 1992
Date: Sat, 29 Feb 92 13:52:41 -0500
From: bzs@world.std.com (Barry Shein)
To: GENOL@UCCMVSA.BITNET
Cc: COM-PRIV@psi.com
In-Reply-To: "Genevieve Engel"'s message of Sat, 29 Feb 92 01:56:32 PST <9202290956.AA01070@psi.com>
>From: "Genevieve Engel" <GENOL%UCCMVSA.BITNET@lists.psi.com>
>Well, not to be heated, but why DOES the World use usage-sensitive
>pricing for the end user while Netcom doesn't?
I am not familiar with Netcom's pricing structure so it is hard for me
to compare. For example, can a person sit 24 hours per day on a modem
at their site, largely idle (say, polling for new e-mail)?
They certainly can here, I am a big believer in being able to do most
anything you like, so long as you are willing to pay the bill.
Flat rate pricing on SERIALLY REUSABLE RESOURCES* tends to foster
artificial restrictions and a situation where a person is forbidden
from even buying what they want for "mere money". That also can be
frustrating.
[* i.e. modem+phone-line, contrast that with a leased line which is
not re-useable.]
We do provide bulk pricing which is similar to flat rate, $20/20-hrs,
or multiples thereof (largely unnecessary beyond 20/20 as the meter
kicks in at $1/hr at that point.) We have always been open to larger
bulk purchases but to be honest no one has ever pursued that with us
beyond an inquiry (our base rate is $5/mo+$2/hr.)
I don't know that our service is comparable in value to netcom, I know
very little about their service other than the basics (we provide
access to multiple T1 lines to the CIX and elsewhere, for example.)
>Sooner or later usage-sensitive pricing of network services at any
>level winds up getting passed on to the user some way or another
>in the long run (through usage-sensitive costs, or through higher
>flat rates, or through more taxes to support NSF...) but people I
>know prefer a flat rate to a usage-sensitive rate when it comes
>down to $15 a month vs. $2 an hour.
The far, far greater concern we see is from people outside the
unmeasured calling area.
While we charge (commonly as low as) $1/hr customers pay rates on the
order of $5-$20/hr (and more internationally) to the phone company and
packet networks just to get to our prompt. Not a complaint, but
relatively that far outweighs our rates (customers often comment that
next to their phone bill our service is essentially free by
comparison.)
Various PC/Pursuit and other plans are only a partial solution and
appropriate for only some people (e.g. they generally require about
$30/mo or more commitments with equivalent sign-up fees and often only
offer these prices off-hours and/or from certain limited areas.)
The point: There's more to this than meets the eye. The assumption
that flat-rate is superior to usage-sensitive in this particular
market is, in our experience, probably a fallacy (except inasmuch as
when they're not comparable in delivered value, obviously more for
less is always attractive, but business models may not permit that.)
-Barry Shein
Software Tool & Die | bzs@world.std.com | uunet!world!bzs
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