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Re: An Attempt at Economically Rational Pricing: Time Warner Trial

  • From: Scott McGrath
  • Date: Sat Jan 19 10:40:12 2008

No we do not however we are allocated a invariant budget to deliver services for a fixed period of time. We cannot 'raise' prices as the pot of funds needs to be allocated to scholarship, teaching, housing and all the other things which make up a university we provide a service which must be available 7x24 for a fixed amount of funds. So even though we do not face a profit/loss calculus cost control is a key driver for us as every dollar not spent for IT can be redirected into scholarships for deserving students.

Our problem on the residential networking side is finding the balance between unfettered access which is untenable and providing a service which allocates the available pool of bits fairly among the average customers and trying to accomodate the large users who are downloading the latest Ubuntu ISO's without causing undue pain for either. For instance at Columbia resnets implement the same policy I posited in my initial response.

But I REALLY dont want to go back to the days of .25cts/minute access to the internet if we do that the entire thing will collapse due to the financial uncertainty and the internet will go back to being a
curiosity for Education and Government as it will be deemed 'too expensive' by the masses.

But it just seems that the telco's just cannot give up the concept of metered access for instance I use DSL at home which is PPPoE which means many 'broadband' devices are unusable here sure it terminates on a PIX but the PIX does not have a finger to press the reset button on the 'required by contract' access device sure I could directly terminate it but since I live in a rural area I need my ISP more than the ISP needs me hence devices which need 'always on' access are a pipe dream as my service is 'on most of the time'.

Roderick Beck wrote:
Universities don't face a profit calculus.

And universities are also instituting rationing as well.

Sent wirelessly via BlackBerry from T-Mobile.

-----Original Message-----
From: Scott McGrath <[email protected]>

Date: Fri, 18 Jan 2008 17:00:19 To:"Patrick W. Gilmore" <[email protected]>
Cc:[email protected]
Subject: Re: An Attempt at Economically Rational Pricing: Time Warner Trial

Why does the industry as a whole keep trying to drag us back to the old
days of Prodigy, CompuServe, AOL and really high rates per minute of
access.   I am old enough to remember BOS>c202202  <return>

The 'Internet' only took off in adoption once flat rate pricing became
the norm for access.   Yes there are P2P pigs out there but a more
common scenario is the canonical "Little Old Lady in a Pink Sweater"
with a compromised box which is sending spam at a great rate.    Should
she pay the $500 bill when it arrives or would a more prudent and
rational approach be like some universities do.

i.e. Unthrottled pipe until you hit some daily limit like 1-2 gb and
then your pipe drops to something like 64k until midnight or so.    This
keeps the 'pigs' in line and you might want to add a   SUPER tier which
would allow truly unlimited use of the pipe for $200-300 because for
some people it would be worth it for them.      It's  human nature  to
desire a degree  of  predictability
in day to day affairs and as another poster noted that's why prepaid
phones are popular now.   Further with the compromised system analogy I
purchased a prepaid phone for my wife who is a teacher so in the event
it was stolen at school the financial loss would be limited to the
prepaid balance, no multi-thousand dollar bill for overseas calls.  "You
used the  minutes (bandwidth) didn't you?".

Ultimately there is no option but to build out the network as we have
found on the university side of the house as digital instructional
materials and entertainment delivery over the net will
become the norm instead of sending bits of plastic through the mail
(except for luddites like me ;-}).

Patrick W. Gilmore wrote:
On Jan 18, 2008, at 3:11 PM, Michael Holstein wrote:

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,
and it appears they don't see working to accommodate the other 5% as
I seriously doubt it the coax that is the problem.

And even if that is a limitation, upgrading the last mile still will
not allow for "unlimited" use by a typical set of users these days.
Backhaul, peering, colocation, etc., are not free, plentiful, or
trivial to operate.

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".
I do not doubt that.  But do you honestly expect the at&t DSL line to
provide faster / more reliable access?

Hint: Whatever your answer, it will be right or wrong for a given time
in the near future.