From: Rod Beck (no email)
Date: Sun Jan 20 2008 - 12:34:07 EST
Hi Andrew,
I don't think it is obvious that it is too expensive to justify metering in today's environment. Such a claim was definitely true a few years ago when end users were mostly sending email, instant messages, and downloading web pages, but innovation has probably changed the outcome of the cost/benefit analysis so that metering can be justified for the heavy users.
Regarding stimulating demand, the only obvious way to increase revenues and profits in a flat rate pricing scheme is to add more users or bundle more products (voice, voicemail, television, etc.). I would argue that the US has reached the point where further increases in broadband penetration probably require either subsidies or government fiat or pressure (Korea, Japan, etc.). And the large American underclass doesn't that help the broadband penetration cause either.
Indeed, the virtue of metering is that it gives the provider an incentive to stimulate demand. Flat rate pricing is the worst model in terms of stimulating supply and investment.
My humble two cents. PS: I'll take a look at your papers.
Roderick S. Beck
Director of European Sales
Hibernia Atlantic
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