Back To Utility Pricing On Wireless?

from the we've-seen-this-movie-before dept

Everything old is new again… For some reason, business models seem to recycle themselves, but every time people seem to act as if they’re “new.” In the wireless world, initial data plans were always based on per byte pricing — which many of us have been saying is a dreadful idea for years and years. Per byte pricing actively discourages use. People prefer flat rates for most things, so they feel comfortable in usage and have an idea of what their regular charges will be. This is why the internet started to take off when ISPs finally ditched their hourly plans for flat rates. Ditto for mobile phones (not flat rate exactly, but close enough). So, along come some companies that have this bright idea to charge for wireless access on a per byte fee and the press eats it up as a revolutionary new business model? When using data services, the last thing people want are per byte fees. What happens if they log in and find out that some spammer has sent them tons of spam including big attachment files? All of those “bytes” add up quickly. Also, most people have no idea how much a byte of traffic is, and will have no way to judge just how much they’re actually using. The simple uncertainty is a mental transaction cost that many people find to be quite high. Yes, there are certain exceptions, but there are many more where people have shown that they’re much more comfortable paying for these types of services at a flat rate.

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Comments on “Back To Utility Pricing On Wireless?”

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Anonymous Hero says:

Utility Pricing Can Be Good

I would much rather pay by amount actually consumed (bytes transferred) rather than amount potentially consumed (available bandwidth). One advantage to such a model is that it directly encourages providers to provide better service in order to increase consumption.
Consider this: Would you like to pay for other utilities by flat rate? For example, paying a monthly electrical fee based on the maximum capacity of the wires serving your house? I sure wouldn’t.

Mike (profile) says:

Re: Utility Pricing Can Be Good

I’d love to pay my electric bill on a flat rate. I hate the fact that my electric bill fluctuates so damn much. I’d even be willing to pay slightly higher than my average bill if I knew what it would be every month and didn’t have to freak out when bills were suddenly much, much higher. In fact, I absolutely thought it was great when I used to live in a “utilities included” apartment years ago. Even though I knew the price was included in the rent, it took out the variability.

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