IMHO, I don't think that the cost of service to the subscriber should
double just because the bandwidth is ~doubling. I say this because only a
portion of the revenue that you collect from the subscriber actually goes
to paying for the bandwidth. If you assume that currently 25% of your
revenue goes towards bandwidth and you charge $24.95 then you would assume
that if you had to double your bandwidth you would have to raise your
subscription fee by about $6. Of course this does not take into
consideration the additional debt service that you would take on because of
the new equipment purchases. But with the aggressive leasing and pricing
that Livingston offer it should help even the smallest of ISPs do OK.
In my estimation Internet rates are going to start going up in general. It
may turn out that 56K is just another reason why. I don't see it happening
in our region anytime soon, but I think it will happen within a year.
Scott
p.s. I'll continue discussions on these topic privately if anyone is
interested. Otherwise hit your Trash button now! :)
At 08:03 AM 4/19/97 -5, you wrote:
>
>> In terms of using the new 56k technology that Livingston will provide
>> for the PM-3, has anybody seen the prices that ISP's will charge for
>> allowing customers to use the 56k modems?
>
>Scott,
>
>You raise a good point here. We've been discussing it with management
>and we haven't yet resolved it. We have significant costs, both
>hardware and bandwidth, to consider in supporting these modems and
>they must be passed along to the customer. If the bandwidth is
>expected to double is the cost also?
>
>
>