[9257] in Commercialization & Privatization of the Internet
Metered vs Flat Rates (was: an Internet buying coop?)
daemon@ATHENA.MIT.EDU (Barry Shein)
Sun Dec 26 21:24:01 1993
Date: Sun, 26 Dec 1993 21:23:30 -0500
From: bzs@world.std.com (Barry Shein)
To: tully@cscns.com
Cc: com-priv@psi.com, com-priv@psi.comstef@nma.com
In-Reply-To: Ed Tully's message of Sun, 26 Dec 93 18:56:15 MST <9312270156.AA27862@cns.cscns.com>
>From: tully@cscns.com (Ed Tully)
>what is the source of your statements? normal business sense? I have ben
>associated with the industry a long time - underutilization went away a
>long time ago. the telco has sufficient history to charge for metered
>service and not transfer the risk.
It's hard to compare something like a Telco with internet service
providers. Telcos have millions (some tens, and no doubt some around
one hundred million) customers. IP providers have only hundreds of
customers, interactive access providers have thousands.
Also, telcos have decades of previous data.
You can do much better modelling in a telco than an IP or interactive
service provider can possibly hope to do. Add to that the fact that
the telcos can afford entire depts of people who do such modelling on
a continuous basis and have done so for decades and you can see why
they may be less concerned about surprises and risks in their markets
(tho no doubt some changes introduce such risks and surprises, but not
minor changes in their POTS services, etc.)
I'll venture to guess (note: guess) that when one telco tries some new
service they will eventually sell what they discovered to the others,
as they don't really compete anyhow, at least not yet. So there's
probably a very reliable flow of information on which to base
decisions in that industry for which none of us have anything
comparable. They can also do trials like most of us cannot (and they
do, several experimental services have been born and died only in the
Massachussetts NE Telco area of Nynex.)
It's all part of the maturing of an industry. Having information on
one's own market and being able to do some reasonable predictions is a
big part of that maturing process.
When we opened up as the very first interactive, full-service Internet
provider we didn't have a whole lot to go on to figure out what a
reasonable price for this was, except by analogy and common sense. Our
first pricing scheme was kinda ridiculous in retrospect (all kinds of
time and weekend slices, I based it on the phone company's typical
model, any port in a storm I s'pose...)
I quickly decided to go to our current scheme, everyone copied us more
or less (which is fine), heck, Delphi even "stole" our name for our 20
hours for $20 ("20/20 service") for their own similarly priced
service, tho I considered that flattery at the time, hardly the kind
of thing one gets very upset over. But, hey, it's tough going at first
to know if you're doing the right thing at all, or have gone off the
deep-end somehow without any data whatsoever. Ultimately, you listen
to the market.
-Barry Shein
Software Tool & Die | bzs@world.std.com | uunet!world!bzs
Purveyors to the Trade | Voice: 617-739-0202 | Login: 617-739-WRLD
