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rchandra
Stargate Universe fan
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join:2000-11-09
14225-2105

1 edit

too radical an idea to be offered?

What I really dislike is not that Internet access tiers exist, but that they're the set which is offered or nothing, and our choices are very limited (a cableco, a telco, then much higher priced options such as 3G/4G by only maybe 3 wireless carriers (MyFi hotspot) or satellite). So what I read about here around a month ago (but posted 30-Jan) was a move toward the standard tier being 50/5, with budget going to 10/1 (worse than standard is now). So then there's nothing inbetween, whereas something along the lines of 15/5 or 20/5 would be reasonably fast and around the price I'd want to pay.

What if pricing were offered on a dollars per megabit per second per month basis, with maybe some rules on how often you'd be allowed to up/downgrade service? In other words, have the quantum be either 1, or maybe 3 or 5 Mbps (or whatever modem firmware will support), so you could put together a 10/5, 15/3, 5/1, 8/2, or 15/15 package. The more megabits per second either up or down you want, the more you pay per month. But we're not locked into arbitrary up/down limits that some marketing droid who just doesn't "get it" made up, thinking they'd garner a large market share. (And I mean by "doesn't get it," those folks who seem to think if you offered Google Fiber speeds and prices that we wouldn't take you up on the offer.)

EDIT: Actually, it might be more palatable to the ISP to structure it like other utility bills, where there is some base charge plus usage, but in this case, it wouldn't be a meter on usage but for incremental speed.

Too pie-in-the-sky?
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BlitzenZeus
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Google is $70 per month for 1Gbps if you can get it.... I'd love for you to lookup the prices of a T1 line which you would never consider for the price unless it was your only choice. Maybe you're mr. money bags so maybe an t3 or oc1 which are definitely not cheap, but those are not even close to what Google is offering. We're already talking thousands of dollars.

Take the one that fast enough for you, or you can afford. I'm fine on 15/5, it's actually the slowest fios speed available right now. It's not a cheap business to be in.
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rchandra
Stargate Universe fan
Premium
join:2000-11-09
14225-2105
I know, that's terrible. It was only about a year and a half ago that a good friend of mine migrated from a T-1 at his own prem at something like $400/mo., to some Linodes. The economics are night and day.

The point still remains though, 50/5 is more expensive than I want to pay, and 10/1 is too slow and I'd somewhat gladly pay more if there were a tier in that wide gulf. There can't be some happy medium?
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English is a difficult enough language to interpret correctly when its rules are followed, let alone when a writer chooses not to follow those rules.

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HarryH3
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reply to rchandra
I think that most providers are drooling at the prospect of charging everyone a monthly minimum fee AND having a very low data cap. Go over the cap, pay extra $ per GB. They see it working for phones and want the same gravy train for wireline access.


tschmidt
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reply to rchandra
I'm a big fan of Andrew Odlyzko. His research shows consumers overwhelming prefer flat rate pricing due to it's predictability, even if it is more expensive than measured usage. I must admit my personal bias is also in that direction.
»www.dtc.umn.edu/~odlyzko/doc/recent.html

quote:
Abstract

“Smart pricing” has been the goal of the networking research community and the telecommunications industry for decades. Yet it has also proved remarkably hard to achieve. This paper presents a brief overv iew of telecommunications economics and technology, and the major changes that are taking place. Special emphasis is placed on the many popular but harmful notions that continue to lead this industry astray, such as that content is king, or that telecom is characterized by high fixed costs. The influence of such factors on advisability of various pricing strategies is then considered. The main conclusion is that flat rates for individual users should be regarded not as a pernicious cancer, but as necessary for the healthy development of wired networks. However, in the wireless arena, there is a mismatch between potential demand and what technology can provide, and this likely means that some forms of not-very-smart pricing will dominate.

»www.dtc.umn.edu/~odlyzko/doc/sma···cing.pdf

/Tom


rchandra
Stargate Universe fan
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join:2000-11-09
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ummmm...OK. Yes, I'd still like to pay a flat amount every month, but have more flexibility in what that amount is, based on how many Mbps I'm buying.


tschmidt
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Milford, NH
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Perhaps I misunderstood your proposal.

I think speed tiers are fine but charging for how much you use the account is where I see the problem.

/tom


rchandra
Stargate Universe fan
Premium
join:2000-11-09
14225-2105
Perhaps an example would help.

Base monthly charge (would cover things like outside plant, tech support, sales, electricity, other general overhead): $20/mo.

Each Mbps downstream speed: $1/mo. (for raw capacity)

Each Mbps upstream speed: $1.50/mo. (again, for raw capacity, but upstream capacity for, for example, CMTSes is more expensive to provide due to needing more upstream hardware units).

So if I wanted a 20/5 package, it'd be $20/mo. + 20 x $1/mo. + 5 x $1.50/mo. = $47.50/mo.

Maybe I decide 6 months later I can do with 2 Mbps upstream, so it becomes $20/mo. + 20 x $1/mo. + 2 * $1.50/mo. = $43/mo.

Again, we can discuss whether the quantum is 1, 2, 3, or 5 Mbps, or if the quanta are different for downstream and upstream (maybe 5 for downstream and 1 for upstream), but the idea is to pay roughly per megabit per second, and pay that on a monthly basis (making it dollars per megabit per second per month).
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tschmidt
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said by rchandra:

Perhaps an example would help.

I thought you were arguing for monthly download/upload caps not just more speed tiers. Great I'm all for that.

You do understand, that once first-mile equipment is able to deliver a particular speed there is almost no cost saving going slower, it is all marketing. Transit cost is almost zero. However there is a cost to create, manage, throttle, and bill multiple speed tiers. I use a CLEC for my DSL. Speed is whatever the line is capable of: 1Mbps - 24Mbps no matter the sync speed monthly cost is the same.

/tom

Happydude32
Premium
join:2005-07-16
kudos:1
reply to rchandra
said by rchandra:

Perhaps an example would help.

Base monthly charge (would cover things like outside plant, tech support, sales, electricity, other general overhead): $20/mo.

Each Mbps downstream speed: $1/mo. (for raw capacity)

Each Mbps upstream speed: $1.50/mo. (again, for raw capacity, but upstream capacity for, for example, CMTSes is more expensive to provide due to needing more upstream hardware units).

So if I wanted a 20/5 package, it'd be $20/mo. + 20 x $1/mo. + 5 x $1.50/mo. = $47.50/mo.

Maybe I decide 6 months later I can do with 2 Mbps upstream, so it becomes $20/mo. + 20 x $1/mo. + 2 * $1.50/mo. = $43/mo.

Again, we can discuss whether the quantum is 1, 2, 3, or 5 Mbps, or if the quanta are different for downstream and upstream (maybe 5 for downstream and 1 for upstream), but the idea is to pay roughly per megabit per second, and pay that on a monthly basis (making it dollars per megabit per second per month).

Wow, no thanks. I'll take my 50Mb connection at $100 or whatever the hell I pay Time Warner if you break part the bundled pricing. Seems a lot more cut and dry.

Customers are generally stupid. How many people actually know what 1Mbps is? This would do nothing but confuse everyone involved. The current system works fine. Have 4 or 5 different speed tiers at different price points. If you're too cheap to upgrade then so be it. Stay at your current speed.
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Snakeoil
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reply to rchandra
nvm. I saw your other post where you gave a better explanation.
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rchandra
Stargate Universe fan
Premium
join:2000-11-09
14225-2105
reply to tschmidt
The thing is, many links are shared media, like DOCSIS. Theoretically, you could provision everyone at full bore, but I bet that would cause untenable congestion. Therefore, to defray costs such as additional headends/CMTSes, we would make going faster cost more. It's like anything else in a microeconomy. It is dividing (what I presume to be) scarce resources. The "pipe" between the TWC CMTS and my SB120 is only so wide, and I'm basically reserving a slice of that (although it's not true CIR).

Yes, a certain amount of the service fees has to go towards administration to set all that up. I just don't think that, once designed, it'd be particluarly complicated (i.e., expensive) to maintain. After all, the current paradigm is to occasionally offer another speed tier, which means things have to be added to and or modified in the current system...which takes some expense. Think of it this way...it would just be more of those, but the billing might become easier as it's just multiplication and addition.

I dunno....just seems like in a way it's simplification, and somewhat more complicated but not insurmountable on the technological side, vis-a-vis which customers get which profile downloaded at modem initialization time in the case of DOCSIS. I don't know, provisioning ATM PVCs for DSL might be trickier.
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English is a difficult enough language to interpret correctly when its rules are followed, let alone when a writer chooses not to follow those rules.

Jeopardy! replies and randomcaps REALLY suck!