>And shortly after going to a flat fee pricing model, AOL was sued by the
>Attorney Generals of several states. I dont know how likely the Japanese
>government would be to go after DoCoMo, but I read somewhere that they may
>be treated differently because of their market dominance. The Japanese FTC
>recently went after NTT East for preventing ADSL companies from using their
>local loop, and the Posts and Telecommunications Ministry seems to be
>getting fed up in with the NTT holding company refusing to decrease it's
>position in DoCoMo.
right. boosting usage just for boosting usage's sake is not necessarily a
good goal. AOL was swamped when it switched to flat fee, demand far
outstripped supply, and many customers found themselves with no service
at all.
additionally, when AT&T introduced their 10 cents a minute flat rate plan
for cell phones, their wireless networks became completely swamped as
well, and people essentially had zero service from 7pm onwards.
my point is just that flat fee pricing will lead to more dramatically
more usage than metered pricing, no matter what is being metered (packets
or minutes, technical arguments notwithstanding, ren) or how much the
unit charge is (which surprised me first time i saw the research). In a
world of finite bandwidth, flat fee pricing is probably NOT the way to
go, as it will swamp the network and deny service to everyone.
additionally, i don't know why attorney general of several states sued
AOL, but i can take some guesses:
- constituents were upset about their ISP no longer working (as AOL was
swamped)
- US telcos urged the politicians to sue AOL. If flat free swamped AOL,
it *really* swamped local telcos. Local phone calls in the US are flat
fee. The average time for a local phone call pre-internet was about 2
minutes. After ISPs introduced flat fee, it spiked to about 30 minutes
(don't quote me on these numbers). Network utilization jumped 1000%+ for
the telcos, revenues increased 0%. They hated it.
zimran
zimran@creativegood.com
212.736.2075
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Received on Mon Jan 22 18:23:27 2001