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Russell Shaw Russell Shaw is a specialist in mobile computing, telephony, networking and covers these fields regularly for numerous print and online publications. Russ writes the popular IP Telephony blog on ZDNet and contributes regularly to The Industry Standard blog as well. Author of seven books, Russ' latest book is Wireless Networking Made Easy.
John Yunker John Yunker is president of Byte Level Research. He closely tracks emerging wireless technologies and their impact on consumers and carriers alike. Over the years he has written a number of major reports on technologies such as Wi-Fi, WiMAX and cellular technologies.
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Unwired studies emerging wireless technologies and how they complement and conflict with one another. Technologies covered include: Wi-Fi, WiMAX, Ultra-Wideband, Zigbee, EV-DO, UMTS, HSDPA and whatever else comes along.
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Unwired
November 17, 2004
It's a Flat-Rate WorldEmail This EntryPrint This Entry
Posted by John Yunker

The iPass announcement yesterday that it will offer its enterprise customers flat-rate pricing for its Wi-Fi network is just another sign that the pay-as-you-go Internet access business model is going away.

And why is that? This quote from their press release pretty much says it all:


    "iPass spends a lot of time in dialogue with our customers, and this pricing plan addresses the desires of some of our customers who wanted a way to make the cost of Wi-Fi use predictable," said Jon Russo, vice president of marketing at iPass. "This 'all-you-can-eat' approach allows the IT department to reliably budget the cost of Wi-Fi hotspot access across an entire organization or for a subset within it. iPass expects this new optional pricing plan to further accelerate Wi-Fi usage."

Charging by the minute or charging by the megabyte (MB) inevitably cause user frustration. Phone calls always seem to last longer than we expect and who honestly wants to spend their days monitoring the kilobytes of every email they send? Flat-rate pricing is a big reason why I favor Connexion by Boeing over Tenzing.

Flat-rate pricing is great news for content providers and, I believe, the future of the telecoms industry. VoIP would not be the phonomenon that it is today if consumers were paying for their broadband connections by the MB.

But what I find most interesting is that we're seeing a collision of sorts between per-minute voice plans and flat-rate data plans. If consumers want predictable billing and VoIP is proving that voice works just fine over broadband connections, how can per-minute voice plans survive in the long run?

As any carrier will tell you (privately), they can't.

Perhaps the 3G networks that we're now seeing go nationwide will give carriers the breathing room they need to start testing unlimited voice plans. Or, perhaps unlimited voice usage will be relegated to those Wi-Fi networks that carriers can't figure out how to profit from.

And cellular carriers can insert fine print into their contracts to prevent network overuse. Even Cox caps broadband consumption per month; it's just that the cap is set so high that few people are affected (so far).

Although the iPass announcement only affects IT departments. In a way, we're all IT managers when it comes to our personal cellular and data plans. And it's hard for me to believe that we all won't one day get those flat-rate plans we desire.


Category: Big Picture | Cellular | VoIP | Wi-Fi


COMMENTS
Jesse Kopelman on November 18, 2004 05:27 PM writes...

"And cellular carriers can insert fine print into their contracts to prevent network overuse."

No need for fine print. Today's typical lowend wireless voice plan is 400 anytime minutes and free night and weekends for $40/month. If you can wait until 9pm or the weekend to do the bulk of your talking, you can talk all you want for $40/month. If you need more flexibility, you buy a more expensive plan that has more anytime minutes. This model of paying for flexibility is a good one. I don't think it will go away, although the price points will undoubtably change. That said, this type of price structure works for voice because it is highly synchronous and human-centric. Raw data, where applications may run unattended and with its asynchronous nature does not respond so well to imposing time of day/week restrictions on it. So for it, I suspect the flexibility one will pay for is going to be related to throughput and usage caps.

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TrackBack URL: http://www.corante.com/cgi-bin/mt/mt-tb.cgi/6935
Free the T-Mobile 4,700...4,800...4,900 from Wi-Fi Networking News Two smart guys talk about T-Mobile's behavior in clinging to metered session pricing: John Yunker of Byte Level Research talks about the inexorable path to flat-rate pricing for not just data, but voice. T-Mobile wants to keep charging by the hour or ... [Read More]

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