nanog mailing list archives
Re: An Attempt at Economically Rational Pricing: Time Warner Trial
From: Joe Greco <jgreco () ns sol net>
Date: Sat, 19 Jan 2008 10:37:55 -0600 (CST)
Condensing a few messages into one: Mikael Abrahamsson writes:
Customers want control, that's why the prepaid mobile phone where you get an "account" you have to prepay into, are so popular in some markets. It also enables people who perhaps otherwise would not be eligable because of bad credit, to get these kind of services.
However, if you look, all the prepaid plans that I've seen look suspiciously like predatory pricing. The price per minute is substantially higher than an equivalent minute on a conventional plan. Picking on AT&T, for a minute, here, look at their monthly GoPhone prepaid plan, $39.99/300 anytime, vs $39.99/450 minutes for the normal. If anything, the phone company is not extending you any credit, and has actually collected your cash in advance, so the prepaid minutes ought to be /cheaper/. Roderick S. Beck writes:
Do other industries have mixed pricing schemes that successfully = coexist? Some restuarants are all-you-can-eat and others are pay by = portion. You can buy a car outright or rent one and pay by the mile.=20
Certainly. We already have that in the Internet business, in the form of business vs residential service, etc. For example, for a residential circuit where I wanted to avoid a disclosed (in the fine print, sigh) monthly limit, we instead ordered a business circuit, which we were assured differed from a T1 in one way (on the usage front): there was no specific performance SLA, but there were no limits imposed by the service provider, and it was explicitly okay to max it 24/7. This cost all of maybe $15/month extra (prices have since changed, I can't check.) Quinn Kuzmich writes:
You are sadly mistaken if you think this will save anyone any cash, even light users. Their prices will not change, not a chance. Upgrade your network instead of complaining that its just kids downloading stuff and playing games.
It is certainly true that the price is resistant to change. In the local area, RR recently increased speeds, and I believe dropped the base price by $5, but didn't tell any of their legacy customers. The pricing aspect in particular has been somewhat obscured; when I called in to have a circuit updated to Road Runner Turbo, the agent merely said that it would only cost $5/month more (despite it being $10/ more, since the base service price had apparently dropped $5). They seemed hesitant to explain. Michael Holstein writes:
The problem is the inability of the physical media in TWC's case (coax) to support multiple simultaneous users. They've held off infrastructure upgrades to the point where they really can't offer "unlimited" bandwidth. TWC also wants to collect on their "unlimited" package, but only to the 95% of the users that don't really use it,
Absolutely. If you can do that, you're good to go. Except that you run into this dynamic where someone else comes in and picks the fruit. In Road Runner's case, they're going to be competing with AT&T who is going to be trying to pick off those $35-$40/mo low volume customers into a less expensive $15-$20/mo plan.
and it appears they don't see working to accommodate the other 5% as cost-effective.
Certainly, but only if they can retain the large number of high-paying customers who make up that 95%.
My guess is the market will work this out. As soon as it's implemented, you'll see AT&T commercials in that town slamming cable and saying how DSL is "really unlimited".
Especially if AT&T can make it really unlimited. Their speeds do not quite compete with Road Runner Turbo, but for 6.0/768 here, AT&T Y! is $34.99/mo, while RR appears to be $40(?) for 7.0/512. The difference is that's the top-of-the-line legacy (non-U-verse) AT&T DSL offering; there are less expensive ones. Getting back to what Roderick Beck said, AT&T is *effectively* offering mixed pricing schemes, simply by offering various DSL speeds. ... JG -- Joe Greco - sol.net Network Services - Milwaukee, WI - http://www.sol.net "We call it the 'one bite at the apple' rule. Give me one chance [and] then I won't contact you again." - Direct Marketing Ass'n position on e-mail spam(CNN) With 24 million small businesses in the US alone, that's way too many apples.
Current thread:
- Re: An Attempt at Economically Rational Pricing: Time Warner Trial, (continued)
- Re: An Attempt at Economically Rational Pricing: Time Warner Trial Marshall Eubanks (Jan 20)
- RE: An Attempt at Economically Rational Pricing: Time Warner Trial Rod Beck (Jan 20)
- Re: An Attempt at Economically Rational Pricing: Time Warner Trial Joe Greco (Jan 20)
- RE: An Attempt at Economically Rational Pricing: Time Warner Trial michael.dillon (Jan 20)
- Re: An Attempt at Economically Rational Pricing: Time Warner Trial Steve Gibbard (Jan 18)
- RE: An Attempt at Economically Rational Pricing: Time Warner Trial Buhrmaster, Gary (Jan 20)
- RE: An Attempt at Economically Rational Pricing: Time Warner Trial Mark Foster (Jan 20)
- Re: An Attempt at Economically Rational Pricing: Time Warner Trial Jeff Johnstone (Jan 20)
- Re: An Attempt at Economically Rational Pricing: Time Warner Trial Mark Newton (Jan 20)
- Re: An Attempt at Economically Rational Pricing: Time Warner Trial Mark Newton (Jan 18)
- Re: An Attempt at Economically Rational Pricing: Time Warner Trial Joe Greco (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 Joe Greco (Jan 20)
- Re: An Attempt at Economically Rational Pricing: Time Warner Trial Marshall Eubanks (Jan 20)
- RE: An Attempt at Economically Rational Pricing: Time Warner Trial Buhrmaster, Gary (Jan 20)
- Re: An Attempt at Economically Rational Pricing: Time Warner Trial Patrick W. Gilmore (Jan 18)
- Re: An Attempt at Economically Rational Pricing: Time Warner Trial Quinn Kuzmich (Jan 18)
- Re: An Attempt at Economically Rational Pricing: Time Warner Trial Mikael Abrahamsson (Jan 18)
- Re: An Attempt at Economically Rational Pricing: Time Warner Trial Sean Donelan (Jan 18)
- Re: An Attempt at Economically Rational Pricing: Time Warner Trial Matthew Moyle-Croft (Jan 18)
- Re: An Attempt at Economically Rational Pricing: Time Warner Trial Mark Radabaugh (Jan 18)