Except if the cable companies want to get rid of the 5% of heavy users, they can't raise the prices for that 5% and recover their costs. The MSOs want it win-win: they'll bring prices for metered access slightly lower than "unlimited" access, making it attractive for a large segment of the user base (say, 80%), and slowly raise the unlimited pricing for the 15 to 20% that want that service, such that at the end of the day, the costs are less AND the revenue is greater. Frank From: owner-nanog@merit.edu [mailto:owner-nanog@merit.edu] On Behalf Of Rod Beck Sent: Saturday, January 19, 2008 2:25 PM To: Scott McGrath; Rod Beck Cc: owner-nanog@merit.edu; Patrick W. Gilmore; nanog@merit.edu Subject: RE: An Attempt at Economically Rational Pricing: Time Warner Trial If service is metered, it doesn't imply 25 cents a minute. It would probably be based on bytes transferred and would probably be less expensive for the bulk of users than the current flat rate pricing. If the cable companies are telling the truth, roughly 5% of their customers generate 50% of the traffic. That implies that the bulk of users are effectively subsidising the five percent of heavy users. So any sort of well crafted usage-based pricing, would lower the amount paid by the vast majority of users and raise it dramatically for the five percent of heavy users. Usage-based pricing would give the cable companies and telephony incumbents an incentive to upgrade infrastructure and actually compete for the heavy users. The heavy users would be the most profitable customers. New technologies would be welcomed instead of discouraged. Ironically, the Net Neutrality debate is about the access providers trying to impose usage-based pricing through the backdor - on the content providers. It goes without saying I oppose it. It's the end users who decide what they view and hence ultimately generate the traffic flows. So the end users should be subject to the usage-based pricing. Regards, Roderick S. Beck Director of European Sales Hibernia Atlantic 1, Passage du Chantier, 75012 Paris http://www.hiberniaatlantic.com Wireless: 1-212-444-8829. Landline: 33-1-4346-3209. French Wireless: 33-6-14-33-48-97. AOL Messenger: GlobalBandwidth rod.beck@hiberniaatlantic.com rodbeck@erols.com ``Unthinking respect for authority is the greatest enemy of truth.'' Albert Einstein.