[9448] in Commercialization & Privatization of the Internet
Re: Flat Rate vs. Prime Time
daemon@ATHENA.MIT.EDU (Edward Vielmetti)
Wed Jan 5 18:34:16 1994
Date: Wed, 5 Jan 94 18:33 EST
From: emv@garnet.msen.com (Edward Vielmetti)
To: com-priv@uu.psi.com
In article <Pine.3.05.9401051510.A23269-a100000@antelope.wcc.edu> you wrote:
: On Wed, 5 Jan 1994 Gregory=Kushmerek%AcctgMed%FIN@humres-server.net.tufts.edu wrote:
: > While sifting through some different plans, I noticed that some
: > people have "Prime Time" charges much as the phone company. Just out
: > of curiousity, does it make a difference? Is this policy there to
: > keep the load low at that time or is it there to make just 'a little
: > more'?
: My impression has been that "Prime time rates" are comparable to TelCo's
: "Business Rates" -- it's a subsidy built into the rate structure. I'll be
: watching other responses (hopefully authoritative) which may confirm or
: deny this impression.
Rate setting is very simple - pick a price and defend it. If you pick
a price that includes peak time differentials you will get a different
usage profile and a different user base than if you have flat hourly
rates or if you have unmetered flat rate service.
The observation from running a popular subsidized service (the Online
Career Center, mail occ-info@mail.msen.com for details) is that there
are very visible times of the day when internet usage is at a peak,
and that if you were charging for a similar sort of service a peak time
price might well give you flatter load curves (and thus a less expensive
service to provide because you don't have to engineer quite so hard for
peak time loads).
Utility companies have off-peak rates because the last 100 kilowatts of
energy demand are much more expensive than the first 100. In extreme
circumstances utilities are motivated to subsidize the energy conservation
of their users, because the return on investment on conservation is greater
than the return on new plants. If the Internet worked this way you'd
have service providers sending free CD-ROMs to people so that they
wouldn't have to use so much modem time.
(If any of the people who manufacture Internet CDs want to send out a
few dozen freebies, we'll match them to our frequent ftp'ers list
and save a few megabytes of traffic on the net.)
Edward Vielmetti, vice president for research, Msen Inc. emv@Msen.com
Msen Inc., 628 Brooks, Ann Arbor MI 48103 +1 313 998 4562 (fax: 998 4563)
msen info addresses: info@msen.com - Michigan $20/mo public access Internet
occ-info@msen.com - Online Career Center jobs database
