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> The reason why I call these programs "good" is that they all but eliminate overage charges from a consumer's bill. With limited data, you often get charged ex

> The reason why I call these programs "good" is that they all but eliminate overage charges from a consumer's bill. With limited data, you often get charged excessive amounts if you go over your cap (disproportionately large amounts at times). That's a bad solution, because it solves the wrong problem. The real problem is overage charges. Of all the other companies who provide me with metered service, not a single one uses the same pricing structure where I purchase an initial quota for one price, and then have to pay out the nose if I go over it. Everyone else just charges a flat unit price. It's a flat $x/gal for water, $x/kW/h for electricity, $x/m^3 for gas, $x/min for land line phone service, $x/min for Azure compute time, etc. etc. That style of pricing is good. It's a straightforward, easy-to-understand "pay for what you use" model. Cell phone style pricing is worse because it's unpredictable and consumer-hostile because it makes you feel punished for using more of their service. Unlimited cell phone pricing is worse yet. It's supremely consumer-hostile because it forces light users to subsidize folks who watch Netflix while riding the city bus. As a light user (and informed consumer) I find that offer to be downright insulting; I hate it just as much as I'd hate if the gas station wanted to charge me the same flat monthly fee for me to buy gas for my economy car that I only use on weekend as they charge my neighbor to top off his Escalade that he uses for a 45-minute commute.

jessriedel 12y ago
Part of you comment is good, but you may be missing a key effect: in the short term (and possibly the medium term), the marginal cost of data transmission is much less than its average cost. When the marginal cost is more than the average cost (as it is for gas, because of low-hanging fruit effects), then the simple Econ 101 solution is that the unit price will be the marginal price, and the supplier and buyer will split the surplus. However, when the marginal cost is lower there are all sorts of weird game theoretic and normative considerations that enter. It can be a Pareto and Utilitarian optimum for different users to be charged different marginal rates.
bsder 12y ago
> Everyone else just charges a flat unit price. It's a flat $x/gal for water, $x/kW/h for electricity, $x/m^3 for gas, $x/min for land line phone service, $x/min for Azure compute time, etc. etc. Except that consumers don't like those kinds of billing plans. Consumers like fixed bill per month. Period. A plan that charges more per month than metered would still wins because the consumer sees it as a fixed charge.
- negativeview 12y ago
  I don't think it's fair to say that consumers overall like either one more than the other, it depends on what we're paying FOR. Why are consumers okay with paying a metered fee for electricity, water, and gasoline? There's competition and/or regulations pushing those prices into reasonable ranges. Usage is fairly predictable. These are things that are horrible to have suddenly shut off without warning (like what effectively happens when you're throttled into unusability). They are things that people need in order to be a functioning member of society in the majority of places on Earth (in places with good public transit, gasoline gets removed from this list). Aside from point #1, those also sound like the Internet.
  - lmm 12y ago
    > Why are consumers okay with paying a metered fee for electricity, water, and gasoline? I don't think they are; certainly in my country people hate metered water. And people love fixed-rate mortgages even when they'd pay less on floating. If people had the option of unmetered electricity or gasoline, I think they'd take it.
    - negativeview 12y ago
      It could be a regional thing, or it's possible that I am unusual myself, but I've never thought twice about metered electricity, but that's largely because I've never been hit with anything I consider unfair like I have with both mobile phones and home Internet.
  - bsder 12y ago
    > Why are consumers okay with paying a metered fee for electricity, water, and gasoline? They're not. But normally they don't have a choice. However, some of the utilities in the Northeast have plans wherein your bill is mostly constant year round even in spite of the spikes at certain times of the year. Lots of people like them even though they almost always wind up paying more than they would otherwise.
    - 12y ago
otoburb 12y ago
Data overage charges in Canada became such a headache with the flood of consumer complaints that the CRTC (rough Canadian equivalent of the US FCC) implemented regulations dictating a wireless code of conduct[1] for Canadian wireless operators to follow for their consumer segment. These regulations supposedly took effect on 2 December 2013[2]. One of the interesting ones is the following nugget: "to limit your data overage charges to $50 a month and your data roaming charges to $100 a month."[3] [1] http://www.crtc.gc.ca/eng/info_sht/t13.htm http://www.crtc.gc.ca/eng/info_sht/t13.htm [2] http://www.crtc.gc.ca/eng/archive/2013/2013-271.htm http://www.crtc.gc.ca/eng/archive/2013/2013-271.htm [3] http://www.crtc.gc.ca/eng/info_sht/t15.htm http://www.crtc.gc.ca/eng/info_sht/t15.htm
deleted 12y ago
[deleted]

jessriedel 12y ago

Part of you comment is good, but you may be missing a key effect: in the short term (and possibly the medium term), the marginal cost of data transmission is much less than its average cost. When the marginal cost is more than the average cost (as it is for gas, because of low-hanging fruit effects), then the simple Econ 101 solution is that the unit price will be the marginal price, and the supplier and buyer will split the surplus. However, when the marginal cost is lower there are all sorts of weird game theoretic and normative considerations that enter. It can be a Pareto and Utilitarian optimum for different users to be charged different marginal rates.

bsder 12y ago

> Everyone else just charges a flat unit price. It's a flat $x/gal for water, $x/kW/h for electricity, $x/m^3 for gas, $x/min for land line phone service, $x/min for Azure compute time, etc. etc. Except that consumers don't like those kinds of billing plans. Consumers like fixed bill per month. Period. A plan that charges more per month than metered would still wins because the consumer sees it as a fixed charge.

negativeview 12y ago
I don't think it's fair to say that consumers overall like either one more than the other, it depends on what we're paying FOR. Why are consumers okay with paying a metered fee for electricity, water, and gasoline? There's competition and/or regulations pushing those prices into reasonable ranges. Usage is fairly predictable. These are things that are horrible to have suddenly shut off without warning (like what effectively happens when you're throttled into unusability). They are things that people need in order to be a functioning member of society in the majority of places on Earth (in places with good public transit, gasoline gets removed from this list). Aside from point #1, those also sound like the Internet.
- lmm 12y ago
  > Why are consumers okay with paying a metered fee for electricity, water, and gasoline? I don't think they are; certainly in my country people hate metered water. And people love fixed-rate mortgages even when they'd pay less on floating. If people had the option of unmetered electricity or gasoline, I think they'd take it.
  - negativeview 12y ago
    It could be a regional thing, or it's possible that I am unusual myself, but I've never thought twice about metered electricity, but that's largely because I've never been hit with anything I consider unfair like I have with both mobile phones and home Internet.
- bsder 12y ago
  > Why are consumers okay with paying a metered fee for electricity, water, and gasoline? They're not. But normally they don't have a choice. However, some of the utilities in the Northeast have plans wherein your bill is mostly constant year round even in spite of the spikes at certain times of the year. Lots of people like them even though they almost always wind up paying more than they would otherwise.
  - 12y ago

otoburb 12y ago

Data overage charges in Canada became such a headache with the flood of consumer complaints that the CRTC (rough Canadian equivalent of the US FCC) implemented regulations dictating a wireless code of conduct[1] for Canadian wireless operators to follow for their consumer segment. These regulations supposedly took effect on 2 December 2013[2]. One of the interesting ones is the following nugget: "to limit your data overage charges to $50 a month and your data roaming charges to $100 a month."[3] [1] http://www.crtc.gc.ca/eng/info_sht/t13.htm http://www.crtc.gc.ca/eng/info_sht/t13.htm [2] http://www.crtc.gc.ca/eng/archive/2013/2013-271.htm http://www.crtc.gc.ca/eng/archive/2013/2013-271.htm [3] http://www.crtc.gc.ca/eng/info_sht/t15.htm http://www.crtc.gc.ca/eng/info_sht/t15.htm

deleted 12y ago

[deleted]