An Attempt at Economically Rational Pricing: Time Warner Trial

Matthew Moyle-Croft mmc at internode.com.au
Sun Jan 20 12:05:51 UTC 2008




Simon Leinen wrote:
> While I think this is basically a sound approach, I'm skeptical that
> *slightly* lowering prices will be sufficient to convert 80% of the
> user base from flat to unmetered pricing.  Don't underestimate the
> value that people put on not having to think about their consumption.
>   
As long as the companies convince people that the "cap" is large enough 
to be essentially the same as unmetered then most people won't care and 
will take the savings.    The other angle is to convince the 95% of 
customers that caps will actually deliver them a faster speed as the 
"evil 5%ers" won't be slowing them down by hogging the bandwidth.  

Having a cap and slowing down afterward (64kbps or 128kbps are typical) 
is what worked here in Oz.   It also removes a whole lot of credit 
related issues. Consumers get a product where they know what they're 
getting - it's fast upto a point and then it slows down.

-- 
Matthew Moyle-Croft - Internode/Agile - Networks
Level 3, 132 Grenfell Street, Adelaide, SA 5000 Australia
Email: mmc at internode.com.au  Web: http://www.on.net
Direct: +61-8-8228-2909            Mobile: +61-419-900-366
Reception: +61-8-8228-2999          Fax: +61-8-8235-6909

      "The difficulty lies, not in the new ideas, but in escaping from the old ones" - John Maynard Keynes 



More information about the NANOG mailing list