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rradina

join:2000-08-08
Chesterfield, MO
reply to iansltx

Re: Technically possible...and decent if done right

I'm impossibly thick so help me understand this statement.

said by iansltx:

I this case, it's all about billing simplicity...it's easier to collect $5000 per month from one account than $8000 per month from 800 accounts.

No app provider is going to trust a $5,000 charge without having details (who, when and quantity). Nothing easier here.

The carrier still has to bill the consumer for their plan and other fees. That money still needs to be collected whether it's $100 or $110 ($8000/800 = $10/user). Nothing easier here.

If I was a carrier, why wouldn't I just collect the $8,000? Where is my incentive to give away $3,000 in profit?

<cynic>
Does Mr. Carrier look better if they hide the fees behind someone else? For instance, if NetFlix charges me $30 a month for mobile streaming so it can cover a $10/month charge from Mr. Carrier, he still gets his jack but it's hidden. Next year Mr. Carrier gets to raise the data rates and NetFlix gets to explain why I have to pay $35 every month instead of $30. NetFlix will claim their costs increased but Mr. Carrier is smart. The fine print says that NetFlix cannot divulge the details of their deal. Information can leak but with no hard evidence, the money is still going to NetFlix and they are forced to justify it. Plus, Mr. Carrier doesn't have to deal with angry customers who balk at seeing overage fees on their bill.
</cynic>

iansltx

join:2007-02-19
Austin, TX
kudos:2
Reviews:
·Time Warner Cable
·Verizon Online DSL
IP tracking etc. is easy; AT&T can already do data by session, and doing data collection by source/destination is just one additional small step. If content providers want fine-grained information, AT&T can give it to them (even though the content providers could just as easily do such audits from their side...actually it would be easier to do it on the content provider side).

rradina

join:2000-08-08
Chesterfield, MO
Assuming the app accesses only their content. What if it accesses other data such as map data from Google or Microsoft? What about content from Akamai cached content servers?

Regardless, you still haven't supported your assertion as to why an ISP would settle for $5000 when they could get $8000.

iansltx

join:2007-02-19
Austin, TX
kudos:2
Reviews:
·Time Warner Cable
·Verizon Online DSL
On the "only their content" issue, my guess is that AT&T would have contracts with the upstream data providers rather than the app makers whose content isn't being pulled. Also, remember that this sort of thing only makes sense on data-intensive applications; people aren't going to go over their caps pulling down maps. On the Akamai side, I guarantee that there will be certain Akamai IPs where Akamai will bundle CDN services and toll-free data into one product, if this catches on. Same for other CDNs.

As for why the ISP would leave money on the table, they wouldn't be. Billing efficiencies are one reason. Another is that cheaper data will stimulate demand, possibly to above (in revenue terms) what they would be if a user had to pay for the data directly (at a higher rate). Call it the Southwest Effect of data.

rradina

join:2000-08-08
Chesterfield, MO
I already disputed the billing efficiencies. Read earlier reply to your post.

How is this cheaper for the consumer? It's a big game where the consumers gets to pay more for something that should just be included in the ridiculous price we already pay.

iansltx

join:2007-02-19
Austin, TX
kudos:2
Reviews:
·Time Warner Cable
·Verizon Online DSL
*shrugs* It all comes down to how a private corporation wants to run their network and allocate scarce resources (spectrum) to subscribers. Toll-free data, where the content provider pays, is one way of doing this in a net-neutral way (if it is done according to certain specific parameters). Remember that telco-grade network equipment for licensed spectrum is expensive...

rradina

join:2000-08-08
Chesterfield, MO
And every report I read says the price keeps dropping to deliver the same amount year over year. So much for that expensive telco gear.

iansltx

join:2007-02-19
Austin, TX
kudos:2
Reviews:
·Time Warner Cable
·Verizon Online DSL
At the backbone level, sure. I can get a 10-gigabit backbone line for $7500 now, whereas it was $10000 under the same terms last year. However that bandwidth is delivered to a data center in Dallas. There's a lot of middle- and last-mile gear between that point and the subscriber.