nanog mailing list archives
Re: An Attempt at Economically Rational Pricing: Time Warner Trial
From: Matthew Palmer <mpalmer () hezmatt org>
Date: Mon, 21 Jan 2008 07:55:33 +1100
On Sun, Jan 20, 2008 at 03:02:15PM -0500, Alex Rubenstein wrote:
As long as the companies convince people that the "cap" is large enough to be essentially the same as unmetered then most peoplewon'tcare and will take the savings.I don't agree. When we sold boatloads of dialup in the mid to late 90's, people did not like caps, no matter how high they were. We sold a product early on for $20/month which gave you 240 hours/month -- that was an average of 8 hours/day. However, most users never used more than 20 to 30 minutes a day -- but we often got told they were moving to other providers because they were 'unlimited.' So, we adapted. In any event, I've been watching this thread, and I'd have to say that going down the road of metered pricing will only cause other providers not to do this, and then market against TW. In fact, I'd bet on it. Am I the only one here who thinks that the major portion of the cost of having a customer is *not* the bandwidth they use?
If we define "customer" to be an average user of the provided service, and bandwidth to be transit pipe cost, then no, bandwidth is not the major cost of their service. However, if you're advertising an 'unlimited' service and want to keep your promises, you can't plan your network around the average user -- there will be people who will want to hold you to your 'unlimited' promise. If you also call 'bandwidth cost' to include all the infrastructure costs required to provide that unlimited service, then yes, "bandwidth cost" would be a pretty major part of that customer's cost. (My point of view is Australia rather than the US, but I don't think 14Mbps of dedicated transit is $50/month even in the US). - Matt
Current thread:
- RE: An Attempt at Economically Rational Pricing: Time Warner Trial, (continued)
- RE: An Attempt at Economically Rational Pricing: Time Warner Trial Rod Beck (Jan 19)
- Re: An Attempt at Economically Rational Pricing: Time Warner Trial Taran Rampersad (Jan 19)
- Re: An Attempt at Economically Rational Pricing: Time Warner Trial Patrick W. Gilmore (Jan 20)
- Re: An Attempt at Economically Rational Pricing: Time Warner Trial Taran Rampersad (Jan 20)
- RE: An Attempt at Economically Rational Pricing: Time Warner Trial Frank Bulk - iNAME (Jan 19)
- Re: An Attempt at Economically Rational Pricing: Time Warner Trial Simon Leinen (Jan 20)
- Re: An Attempt at Economically Rational Pricing: Time Warner Trial Simon Leinen (Jan 20)
- Re: An Attempt at Economically Rational Pricing: Time Warner Trial Matthew Moyle-Croft (Jan 20)
- Re: An Attempt at Economically Rational Pricing: Time Warner Trial Taran Rampersad (Jan 20)
- RE: An Attempt at Economically Rational Pricing: Time Warner Trial Alex Rubenstein (Jan 20)
- Re: An Attempt at Economically Rational Pricing: Time Warner Trial Matthew Palmer (Jan 20)
- RE: An Attempt at Economically Rational Pricing: Time Warner Trial Alex Rubenstein (Jan 20)
- RE: An Attempt at Economically Rational Pricing: Time Warner Trial Frank Bulk (Jan 21)
- RE: An Attempt at Economically Rational Pricing: Time Warner Trial Sean Donelan (Jan 21)
- RE: An Attempt at Economically Rational Pricing: Time Warner Trial michael.dillon (Jan 21)
- RE: An Attempt at Economically Rational Pricing: Time Warner Trial Frank Bulk (Jan 21)
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- RE: An Attempt at Economically Rational Pricing: Time Warner Trial Frank Bulk (Jan 22)
- Re: An Attempt at Economically Rational Pricing: Time Warner Trial Scott McGrath (Jan 22)
- RE: An Attempt at Economically Rational Pricing: Time Warner Trial Frank Bulk (Jan 21)
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- RE: An Attempt at Economically Rational Pricing: Time Warner Trial Rod Beck (Jan 20)
- Re: An Attempt at Economically Rational Pricing: Time Warner Trial Marshall Eubanks (Jan 20)