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<TITLE>RE: An Attempt at Economically Rational Pricing: Time Warner Trial</TITLE>
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<P><FONT SIZE=2>Hi Marshall,<BR>
<BR>
I think the point is that you need to get buyers to segregate themslevesinto two groups - the light users and the heavy users. By heavy users I mean the 'Bandwidth Hogs' (Oink, Oink) and a light user someone like myself for whom email is the main application. Afterall the problem with the current system is that there is no segregation - everyone is on basically the same plan.<BR>
<BR>
The pricing plan needs to be structure in a way that light users have an incentive to take a different pricing plan than do the heavy users.<BR>
<BR>
Similar to the way that insurance companies require high premiums for better coverage and more benefits.<BR>
<BR>
There must be incentives for the heavy user to reveal him or herself as a heavy user.<BR>
<BR>
I am just a dumb sales pushing point-to-point capacity ... So I don't have a good idea of how to do it.<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.<BR>
<BR>
<BR>
<BR>
-----Original Message-----<BR>
From: Marshall Eubanks [<A HREF="mailto:tme@multicasttech.com">mailto:tme@multicasttech.com</A>]<BR>
Sent: Sun 1/20/2008 2:37 PM<BR>
To: Rod Beck<BR>
Cc: Scott McGrath; Rod Beck; owner-nanog@merit.edu; Patrick W. Gilmore; nanog@merit.edu<BR>
Subject: Re: An Attempt at Economically Rational Pricing: Time Warner Trial<BR>
<BR>
<BR>
On Jan 19, 2008, at 3:25 PM, Rod Beck wrote:<BR>
<BR>
> If service is metered, it doesn't imply 25 cents a minute. It would <BR>
> probably be based on bytes transferred and would probably be less <BR>
> expensive for the bulk of users than the current flat rate pricing. <BR>
> If the cable companies are telling the truth, roughly 5% of their <BR>
> customers generate 50% of the traffic. That implies that the bulk <BR>
> 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 <BR>
> amount paid by the vast majority of users and raise it dramatically <BR>
> for the five percent of heavy users.<BR>
><BR>
><BR>
<BR>
Dear Rod;<BR>
<BR>
This does not match my experience of the world. Raise the price for <BR>
the 5%, sure. Lower prices for the rest, probably not. What I would <BR>
really expect to result from this are very complicated bills full of <BR>
obscure fees that effectively raise almost everyone's monthly charge <BR>
to well above what they advertise on TV. This is, after all, the <BR>
common pattern on phone service, and I would expect "plans" where you <BR>
get so much bandwidth but if you exceed your limit you are suddenly <BR>
paying some exorbitant rate per GB. Soon to come would be TV <BR>
commercials talking about weekend Gigabytes and daytime Gigabytes and <BR>
how you can carry your unused Gigabytes over from one month to the next.<BR>
<BR>
Regards<BR>
Marshall<BR>
<BR>
> Usage-based pricing would give the cable companies and telephony <BR>
> incumbents an incentive to upgrade infrastructure and actually <BR>
> compete for the heavy users. The heavy users would be the most <BR>
> profitable customers. New technologies would be welcomed instead of <BR>
> discouraged.<BR>
><BR>
> Ironically, the Net Neutrality debate is about the access providers <BR>
> trying to impose usage-based pricing through the backdor - on the <BR>
> content providers. It goes without saying I oppose it. It's the end <BR>
> users who decide what they view and hence ultimately generate the <BR>
> traffic flows. So the end users should be subject to the usage-<BR>
> 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 <BR>
> truth.'' Albert Einstein.<BR>
><BR>
<BR>
<BR>
</FONT>
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