RE: 56K pricing

Phil Taylor (Phil@lansystems.co.uk)
Sun, 20 Apr 1997 01:50:00 +0100

Firstly, you are obviously not in the UK where bandwidth is FAR more
expensive than the US, having said this I think that charging a premium
for true ISDN connections is fair enough, because users get a guaranteed
64K (or 56K in the US) connection. From what I am hearing about 56K
technology is that it is quite likely (especially for people using the
bit robbed stuff) that the modems will train down anyway at some time
during the connection so the user might only be getting 40-45K
consistantly which isn't that much more than 33,600.
The problem with this is even if a connect speed value is added to
radius this won't actually list the average connect speed, thus users
(potential) usage of your bandwidth

How about billing on OutputOctets that way regardless of connect
speed/retrains you can charge people for the actual amount of bandwidth
they are using which is surely what this thread is about, not whether
they get a faster connect of not. If you think about it, it isn't much
more difficult than time based billing that a lot of us already use.

Cheers

Phil

----------
From: Scott Lagos
To: portmaster-users@livingston.com
Sent: 4/19/97 4:06 PM
Subject:re: 56K pricing

Different Scott responding.....

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?
>
>
>