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(June 1998)

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Subject: A really good point against Mike Nolan's idea
From: Mike Nolan <nolan @ celery . tssi . com>
Date: Mon, 15 Jun 1998 13:20:49 -0500 (CDT)
To: list-managers @ GreatCircle . com (List Managers)
Reply-to: nolan @ tssi . com

> : People are much more eager to use a resource when it's not metered.

I'm not sure there is much evidence supporting this for things outside of 
the Internet:

Most libraries are free, but their use is declining while book sales continue
to increase.

The cost of cards and postage keeps going up, but I still get a wall full
of Christmas cards every December.  (And send a like number.)

My wife has a cell phone that costs about 30 cents/minute to use, it
didn't take many weeks for us all to develop the habit of calling her on it
for whatever reason, totally oblivious to the fact that the meter is running.
She's even prone to call me from the cell phone when sitting next to a
desk phone.

Pay-per-view services are the fastest growing segment of the cable TV
business, and likely to become even more so, as I suspect/fear that
many sporting events will start to move in that direction, some already have.
Even though I now live in Nebraska, I'm still a die-hard Cubs fan.  Would I pay
a few dollars to see Kerry Wood pitch against the Brewers tonight?  (The game 
isn't on WGN TV, but is on something called CLTV, which isn't available 
here.)  Probably.

The existence of Internet chess servers has not yet killed off postal
chess, though I suspect it may have cut back on the number of non-serious
chessplayers participating.

There is a distinction between 'FREE' Internet service and the two types
of paid-for service.  If YOU don't pay the bills, of COURSE it's free, TO YOU,
and you feel no need to conserve on its usage.  Conversely, all-you-can-eat
is a popular idea, and IMHO it also tends to encourage overconsumption.  
(And IMHO spam is a form of overconsumption.  If bulk mail was free or
basically a fixed charge per mailer, I'd need a much larger mailbox out in 
front of my house, but I could put in a paper burning stove.)

As a former student of small business management in grad school, I know that
all-you-can-eat organizations are much more prone to fail due to improper
pricing than ala carte pricing organizations.  Even the big boys in ISP
service have waffled between metered, somewhat metered, and unmetered
service, mostly winding up somewhere in the middle.  I've lost track of
how folks like AOL price, but I have a $18/month all-you-can-eat local ISP 
account, plus a 64K ISDN dedicated connection, which costs a lot more.  

And I'm very conscious of the bandwidth consumption on the latter, since 
if I reach the point where I exceed the capacity of the 64K circuit it will 
cost me another $150 or so per month to go up to 128K.  And I now that
as net connection charges go, that's still small potatoes.  A friend works
at an online game company, the list of net connections they have is staggering
to me as an individual net user, and I presume the monthly cost would be
equally staggering.

For large companies (and REALLY wired individuals), the Internet is 
essentially a metered service now, it's just that the unit of measure is 
very large, being measured in things like T-1 and T-3 connections.  In 
effect what I'm doing is proposing a change in the granularity of the model.

> : Most people won't use a service for anything but the most vital needs
> : when they hear the clock ticking in their heads.  The net's ethic
> : is founded on volunteer work of all kinds, like the production of
> : FAQs such as this one, the moderation of newsgroups, and so on.
> : This work would be prohibitively expensive with metered use, and
> : the amount of information available would be much lower.
> Mike (and everyone else), is there a way around this kind of problem?
> Otherwise I will not pursue Mike Nolan's idea any further.

First of all, it depends on the cost structure, which I admit I have not
attempted to work out.  If I take my $18/month fixed rate account and divide
it back by all my incoming and outgoing e-mail (excluding spam), all 
the newsgroup posts I read and write, and all the web sites I hit, I doubt 
any one transaction would cost me more than $0.002, nor that I would develop
much avoidance to using the net because of that miniscule unit cost.

Except for the stereotypical father, most people don't go around turning 
off lights the moment they are unneeded, despite the fact that the
meter is still running.  That's because the unit of pricing is very small
compared to the perceived value of leaving the light on while you go into
the other room for a while.  The same thing can be true for an economically
based pricing model for Internet usage.  Would you pay $0.002 to receive
this message?  Depending on how you value your time, it may cost many orders
of magnitude beyond that to READ and RESPOND to it.

Also, there should be ways to structure the costs so that SOME types of
transactions are borne by 3rd parties or by the net in general.
(Currently most transactions are effectively so structured, and IMHO the
transfer of payments system is inefficient, at best.)

As to things like newsgroup moderators, yes there should be some way
of handling them equitably.  But I know of a few moderators who perform
their tasks on COMPANY time, and I suspect that cost far outweighs the
incremental cost of networking services it takes to moderate a newgroup.
The same thing is true for the posting of FAQ's.  As to the e-mail exchange
which happens in the drafting or revision of a FAQ, that probably represents
a small fraction of those individuals e-mail usage, so any incremental
charges involved would also be minor.

But as far as newsgroups are concerned, I think Chuq is right about their
being a dinosaur, it's a question of when and how they become extinct,
and what evolves to fill that need.

Right now there are ISP's and others devoting considerable expense to 'helping 
the net'.  (I know of one company that a few years back had a T-1 and several 
computers basically to support NNTP feeds to other companies, despite this 
having next to nothing to do with the mission of that company or even much 
internal value within the company.)  Would these folks still be willing to 
pay the charges for posting FAQ's and hosting moderators if this service was
transactionally priced, or more accurately priced on a much smaller incremental
unit?  Chuq, would Apple?
Mike Nolan

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