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<title>RE: An Attempt at Economically Rational Pricing: Time Warner Trial</title>
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<p class=MsoNormal><span style='font-size:10.0pt;font-family:"Tahoma","sans-serif";
color:#1F497D'>Except if the cable companies want to get rid of the 5% of heavy
users, they can’t raise the prices for that 5% and recover their costs.
The MSOs want it win-win: they’ll bring prices for metered access slightly
lower than “unlimited” access, making it attractive for a large
segment of the user base (say, 80%), and slowly raise the unlimited pricing for
the 15 to 20% that want that service, such that at the end of the day, the
costs are less AND the revenue is greater.<o:p></o:p></span></p>
<p class=MsoNormal><span style='font-size:10.0pt;font-family:"Tahoma","sans-serif";
color:#1F497D'><o:p> </o:p></span></p>
<p class=MsoNormal><span style='font-size:10.0pt;font-family:"Tahoma","sans-serif";
color:#1F497D'>Frank<o:p></o:p></span></p>
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color:#1F497D'><o:p> </o:p></span></p>
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<p class=MsoNormal><b><span style='font-size:10.0pt;font-family:"Tahoma","sans-serif"'>From:</span></b><span
style='font-size:10.0pt;font-family:"Tahoma","sans-serif"'>
owner-nanog@merit.edu [mailto:owner-nanog@merit.edu] <b>On Behalf Of </b>Rod
Beck<br>
<b>Sent:</b> Saturday, January 19, 2008 2:25 PM<br>
<b>To:</b> Scott McGrath; Rod Beck<br>
<b>Cc:</b> owner-nanog@merit.edu; Patrick W. Gilmore; nanog@merit.edu<br>
<b>Subject:</b> RE: An Attempt at Economically Rational Pricing: Time Warner
Trial<o:p></o:p></span></p>
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<p class=MsoNormal><o:p> </o:p></p>
<p style='margin-bottom:12.0pt'><span style='font-size:10.0pt'>If service is
metered, it doesn't imply 25 cents a minute. It would probably be based on
bytes transferred and would probably be less expensive for the bulk of users
than the current flat rate pricing. If the cable companies are telling the
truth, roughly 5% of their customers generate 50% of the traffic. That implies
that the bulk of users are effectively subsidising the five percent of heavy
users.<br>
<br>
So any sort of well crafted usage-based pricing, would lower the amount paid by
the vast majority of users and raise it dramatically for the five percent of
heavy users.<br>
<br>
Usage-based pricing would give the cable companies and telephony incumbents an
incentive to upgrade infrastructure and actually compete for the heavy users.
The heavy users would be the most profitable customers. New technologies would
be welcomed instead of discouraged.<br>
<br>
Ironically, the Net Neutrality debate is about the access providers trying to
impose usage-based pricing through the backdor - on the content providers. It
goes without saying I oppose it. It's the end users who decide what they view
and hence ultimately generate the traffic flows. So the end users should be
subject to the usage-based pricing.<br>
<br>
Regards,<br>
<br>
Roderick S. Beck<br>
Director of European Sales<br>
Hibernia Atlantic<br>
1, Passage du Chantier, 75012 Paris<br>
<a href="http://www.hiberniaatlantic.com">http://www.hiberniaatlantic.com</a><br>
Wireless: 1-212-444-8829.<br>
Landline: 33-1-4346-3209.<br>
French Wireless: 33-6-14-33-48-97.<br>
AOL Messenger: GlobalBandwidth<br>
rod.beck@hiberniaatlantic.com<br>
rodbeck@erols.com<br>
``Unthinking respect for authority is the greatest enemy of truth.'' Albert
Einstein.</span><o:p></o:p></p>
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