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North American Network Operators Group

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Re: MFS WorldCom/WilTel/LDDS

  • From: Edward Henigin
  • Date: Wed Aug 28 21:31:06 1996

	this seems to reverberate with comments made just a few days
ago...  About how, when services are delivered at a flat rate, the
provider's most fiscally responsible SOP is to run their network to as
close of a breaking point as possible.  When services hit 100% resource
usage, there is no economic loss (aside from subscribers cancelling,
which I won't deal with here).  If, on the other hand, services are
delivered at a metered rate, and there is demand that is greater than
the resources available, then the difference between that demand and
the available resources is potential revenue which is lost.

	Unmetered usage develops an environment which puts some sort
of backpressure on the end user, to discourage or prevent the usage
of too much resource.

	Metered usage develops an environment which *encourages*
resource use.  You want to make more money, right?  If you've ever
read Compuserve's subscriber magazine, they highlight many files they
*want* you to download.  Why?  Because they charged a metered rate,
and they made money on every download.

	Think about it.


	The journalist may be stupid, but the point has some merit.


	Ed

--
On Wed, 28 Aug 1996, Jeremy Porter wrote:

> "... Without usaged-based charges service
> providers are called on to upgrade their infrastructure with no clear promise of a return on investment."

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