More Sidgemore on per-bit pricing

Sat Dec 5 20:35:19 UTC 1998

On December 5, 1998 at 14:19 salo at networkcs.com (Tim Salo) wrote:
 > I suspect that "it's too hard and/or expensive to bill by byte (or
 > kilo-byte or mega-byte)" may become one of the great myths of the 
 > Internet.

I agree 100%, it's one of the great "truisms" which has been repeated
over and over since the early '80's at least on lists like these.

In my experience it rests on largely a moralistic view rather than an
economic model. For example, the underlying presumption is that it's
somehow "wrong" to charge for the cost of billing (why?), and worse
yet to charge cost+profit on just the billing activity (why?) Yet in
essence every business which bills customers sells billing services at
a profit or they're not in business very long, if you want to look at
it like that.

I can certainly understand why someone would like to pay only for the
actual service or product and not pay for being billed, who wouldn't?

But if service+billing, where the billing is a larger percentage than
some other billing model, still is competitive (e.g. because it
reduces the cost of the service even more) then it's a potential
winner.

How the underlying charge pie-charts out in terms of cost-factors is
really of little concern to the customer if their final deal is
better. But that's basically what this "billing costs too much"
argument is often trying to say, that increasing the pie-chart slice
of billing is unreasonable, independent of how that affects the other
slices or the total cost (of course if the rest stays the same then
yes, it's probably a loser.)

-- 
        -Barry Shein

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