Flat Rate Pricing For Wireless Service? Patented!

from the oh,-come-on dept

Seems like today's been quite the day for patent related stories. Just as we were discussing the question of obviousness when it comes to patents, comes the news of mobile operator Leap Wireless' patent lawsuit against Metro PCS. Apparently, Leap was able to get a business method patent on offering flat-rate pricing for a mobile phone service. Note that this patent was filed in 2001, when flat-rate pricing was very much the standard for internet access. It seems positively obvious that someone would eventually offer flat-rate service for mobile phones as well. In fact, there were flat-rate, no roaming charge mobile plans well before 2001. I remember AT&T Wireless (the old one) offering such a plan around 1998. Reading the patent, though, Leap makes it sound like some amazing new invention that has wonderfully mysterious properties to increase capacity while lowering peak capacity. So, can someone explain how this idea could possibly be called "new and non-obvious"? Then, can you explain how it helps the market in the slightest to have Leap try to block the competition from offering a flat-rate pricing plan as well?

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  1. identicon
    Anonymous Coward, 24 Aug 2006 @ 9:03am

    patent review

    The present invention may feature flat rate billing of users. This is in contrast to prior known wireless services, in which services are delivered on a per call or per minute usage charge basis. This change in pricing model affects usage and capacity of the network in certain ways. In a preferred embodiment, the system and network of the present invention employs flat rate billing, achieves high capacity utilization of network components, and achieves lower peak capacity. These features enable the network and system of the present invention to handle a higher overall volume of calls with less costly central network components and more streamlined operations than conventional cellular systems.

    [--I stand in awe of this clever reasoning--]

    ...As service is flat rate and pre-paid, there are no charges based upon the number of calls, length of calls, and features accessed. Itemized billing statements may be eliminated and replaced by simple flat rate bills. Accounts receivable and collection activities are eliminated, further simplifying back office operations.

    [--profoundly innovative! tell me more--]

    ...Further, the present invention substantially reduces activation-related costs. The phones of the present invention are sold preactivated. Each phone already has loaded into it a unique cellular number upon leaving the factory. This reduces the effort required to activate. Rather than supplying skilled customer service personnel to assist in activation, activation may be conducted by the customer upon leaving the store.....

    [--well, maybe thats clever. thanks for thinking it up, guys!--]

    None of these improvements were obvious at the time the invention was made. In contrast, the incumbent business model has been and remains based upon minutes of usage, the time of day, and features accessed.

    [--i beg to differ. just because nobody was doing this doesnt mean nobody had thought of it. maybe their cost/benefit analysis didnt come up favorably--]

    ..By combining these features in various combinations, to expand capacity utilization and reduce systems, capital, and operating costs, the advantages of the present invention are fully achieved.

    [--the bottom line: flat rate billing is an ingenious invention that can contribute to more effective use of your company's resources and infrastructure. we gave our engineers a couple of months off after they came up with this one--]

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