[9928] in Commercialization & Privatization of the Internet
Re: IIA Breaks Out
daemon@ATHENA.MIT.EDU (Russell Nelson)
Thu Jan 27 11:35:29 1994
Date: Thu, 27 Jan 1994 10:47:38 EST
From: "Russell Nelson" <nelson@crynwr.com>
To: "Russell Nelson" <nelson@crynwr.com>
Cc: com-priv@psi.com
On Wed, 26 Jan 1994 23:40:27 EST, "Russell Nelson" <nelson@crynwr.com> wrote:
> On Wed, 26 Jan 1994 16:50:36 -0800, "Brock N. Meeks" <brock@well.sf.ca.us> wrote:
>
> > He said the credit card number was needed because the company
> > providing the 800 number access to the IIA host computers needed it
> > to bill people, at 20 cents per minute.
> ...
> > You do the math: Figure 40,000 users (if the IIA grows no bigger than
> > current applications) dialing in 10 hours a month. If they use the 800
> > number that whole time, IDT racks in a whopping $4.8 million PER MONTH in
> > access fees alone. Free my ass.
>
> That assumes that they get to keep all twenty of the cents. They
> probably only get to keep a nickle. That means $1.2 million per month.
> They might get a penny or two more than that, but they'll also have
> some people calling in direct, which results in no revenue for them.
>
> The costs I see are $176K/month. Either I've vastly underestimated
> some costs, or IIA is going to be vastly profitable.
After sleeping on it, I realized that Brock greatly overestimated the
income. The 40,000 people who want these accounts want them because
they're "free". But if they call 10 hours/month at 20 cents/minute,
that adds up to $12/hour, or $120/month. I expect that most of the
40,000 will drastically cut back after the first month.
Even if you call the non-800 number, that will still cost you 10
cents/minute (non-prime-time), and there won't be anywhere *near*
enough non-800 lines. IIA will only be free for people in IIA's local
calling area IF they can get in on the non-800 lines.
Also, there's no mention of how many of these 40,000 people are
current Internet users who just want another account. No, I think
IIA won't be anywhere near as profitable as it looks at first glance.
In fact, it might even be a non-profit.
--
-russ <nelson@crynwr.com> ftp.msen.com:pub/vendor/crynwr/crynwr.wav
Crynwr Software | Crynwr Software sells packet driver support.
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