The Odd Variations On 3G Per-Megabyte Pricing 205
GMGruman writes "Carriers are increasingly charging for 3G mobile access by the megabyte, to prevent 'unfair' subsidies of heavy users by everyone else. So why does the price of a 3G megabyte vary based on the device used to send or receive it? Why is an iPad megabyte cheaper than a MiFi one? After all, a megabyte is a megabyte as far as the network is concerned. InfoWorld has a comparison of 3G pricing for the four major US carriers for their various supported devices, so you can see whose 3G pricing is out of whack for which devices."
Fascinating (Score:5, Insightful)
Re:Fascinating (Score:5, Funny)
The best way to undermine a broken, corrupt system is to draw attention to the inconsistencies in its operation.
Funny! That's also how my first marriage ended!
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Re:Fascinating (Score:5, Informative)
Obama advanced Elizabeth Warren for the new Consumer Financial Protection Bureau, and she has railed against this problem for years: "Today, the big banks churn out page after page of incomprehensible fine print to obscure the cost and risks of checking accounts, credit cards, mortgages and other financial products. The result is that consumers can't make direct product comparisons, markets aren't competitive, and costs are higher."
It's not hard to see the tie between confusopoly and the mortgage meltdown that wrecked the economy, either - and here I include not only under-educated sub-prime borrowers, but bankers creating and selling complex derivatives that were not well understood by ratings agencies, regulators, nor even the bankers themselves.
However, Republicans slammed [house.gov] the bill creating the CFPB as "a government takeover of the economy. The President and Democrats today gave financial regulators the power to create years worth of financial uncertainty, which will only lead to more struggling businesses and fewer jobs." Just as with the Credit Card Reform Act [findlaw.com] of 2009.
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I hadn't come across the term confusopoly. The other day I commented that lately rather than reading Dilbert, I check up on the developer blog at Open Pandora.
Market discipline (and invisible hand enlightenment) depend crucially on transactions between rational, well informed parties.
The prime order of business in a mature firm is to escape market discipline. Market discipline entails the risk of failure if you decide poorly. Who wants that, if you can avoid it?
I've spent far too much time in the past de
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Unfortunately, it hasn't worked for "The Daily Show". (That's one of the things that makes me mad watching the show -- they point out the inconsistencies/hypocrisy, with video clips, that the nightly news shows should be doing!)
Itsn't it sad when you get more relevant NEWS on (Score:2)
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You're assuming two things:
1. That (300 million Americans) want or need information in their news, and
2. We can't afford to just wait for our international brethren to inform us we talk like fags and our shit is all retarded.
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Of course, if you really want to look at high charges, have a look at charges for messaging (texting, SMS). Here (Oz) carriers charge up to 20 cents (US dollar is about the same these days) for a message.
It's, what, 140 bytes. Hmm, that works out at $1,428,571 per megabyte.
Now that's what I call a profit margin!
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Text messages are $0.50 each to send or receive in Canada. So very awesome having a three-way confusopoly controlling 95% of the market.
It's even worse when you learn that texts are max 160 bytes because that's the amount of space left in the packets your phone is sending to the tower anyway (see this article [nytimes.com]). They cost absolutely nothing in terms of bandwidth. 100% profit.
the interesting page is that one : (Score:5, Informative)
that's the one that actually contain the table your are looking for.
http://www.infoworld.com/d/mobilize/the-strange-unpredictable-pricing-3g-data-plans-485?page=0,2 [infoworld.com]
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Page (0,2)? We're paginating in two dimensions now?!
Not all megabytes cost the same (Score:2, Informative)
Transferring 1 1MiB chunk stresses the network a lot less than transferring 1024 1KiB chunks.
It makes sense to charge differently for devices with different usage patterns.
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Voice goes seperatly in cells of 48 bytes for other historical reasons. The difference between a packet and a cell is the former is variably sized, while the latter is always exactly 48 bytes, no more, no less.
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You must be a first year CS major.
No. Not all packets are the same size.
a single large packet has has a header that tells the network where it is supposed to go.
1024 small packets each have a header of about the same size as the header of the large packet, for over a thousand times the overhead cost just in terms of bandwidth.
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It sounds bad, but it really isn't. The vast majority of packets sent are sent at the maximum 1500 MTU. This is because it is hard to get files that are smaller than 1500 bytes, so the only extra overhead for small files vs big files is the tail end of the smaller files.
It's very minor. 1024 1kb files transfers an extra 9kb of data due to overhead compared to a 1mb file. That's about 0.8% waste.
Even a 1gb file doesn't waste much - 1gb worth of 1kb files transfers an extra 8mb of data due to overhead comp
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You two are in agreement. He said that 1 large chunk is easier to transfer than lots of small chunks.
A TCP packet has a minimum size of 64 bytes. That's with no payload (no real data beint sent.) If I have 1400 bytes that I want to send to someone, my device can choose to send 1400 65 byte packets (91000 bytes total including overhead, and not including acknowledgement packets.) It could also choose to send 1 1400 byte packet (1464 bytes, with the same caveats.) These are obviously the extreme cases--i
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The network "knows" that these X packets are all going to the same place.
The network knows no such thing. It only knows where each individual packet is going, it has no concept of the entire cluster that is being sent.
Sending a 1mb saves about 9kb (about 6 full packets worth) of data compared to 1024 1kb files. That's 0.8% waste. Not exactly something to write home about.
Here is the breakdown: each packet for the 1mb download will hit the cap of roughly 1500b. With an overhead of 28 bytes per packet, that's 695 packets to transfer a 1mb file vs 1024 1kb files. The extra 28
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But the usage patterns don't jive with their pricing.
I should preface this by saying that this is only a guess -- any rebuttals are welcome.
Let's start with web browsing. I'd say the usage pattern for each device is about the same, with the big difference being volume. The biggest difference would be for smartphones, which will have fewer large image files by visiting web sites optimized for a mobile device.
Next: email. I don't see a big difference here. Maybe fewer large files for smartphones and table
21st century technology, 20th century mindset (Score:2)
It's eerily similar to our patent laws, communication laws, and copyright laws.
UK - setup (Score:5, Insightful)
Can they not just charge you for WHAT YOU USE, WHEN YOU USE IT. It's fucking retarded.
In terms of PAYG mobiles they dont have these problems
Re:UK - setup (Score:4, Informative)
Some UK PAYG Tariffs do have time limits on the period that the 'Top-Up' is vaild for, AFAIK, these are not from the main carriers but secondary networks that buy space on the main networks.
Back to Data Tariff's.
'3' has a contract £15.00/month for 15Gb. i use the same Sim in a 3G Dongle and in a 'mifi' unit. No problems with 1Mb 1Mb here.
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No problems with 1Mb 1Mb here.
Top tip! Use != when attempting inequality on ./
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Local areas may vary, but the company I work for charge you however you want it.
You can buy an allowance for the month, like most places - from $10 (1GB) to $30 (5 GB) - or you can pay $1 per MB.
The thing is - if we where to charge you the actual cost per MB traffic, it would be hugely expensive for you to get anything close to 1 GB (putting up towers and having xDSL in the boondocks is expensive, think avg. price pr. MB in the 20 cent range) - most people wont use more than 50-100MB, therefore we can lower
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You're railing against the basic issue of provisioning. Even on fixed line ISPs you get a certain limit (or "unlimited") for a certain time.
Selling someone an allocation without a time limit is a nightmare. What if you end up with large amount of unused data allocation? Potentially it could all be used at once, leading to service disruption for regular users. Also, pure PAYG data usage is a bit of a problem. You don't want people turning up and using large amounts of data out of the blue which is reflected
That's an easy one (Score:5, Informative)
Because you keep paying it. Next question?
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Close, but the real reason is you're paying for varying levels of access. Think of it this way - you could buy a raw Internet connection at some high price. Or you can buy cut down versions at cheaper prices.
Let's take some simple plan categories - dumbphone, blackberry, smartphone, laptop, VPN. Does ao dumbphone which offers facebook, basic email, twitter and the like need fu
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If you're going to say vote with your wallet, then I ask to which provider? Not having internet is no option. Which provider in that list will offer me 3G internet and 3G mobile at the same rate?
Not exactly (Score:3)
A megabyte is not equal to a megabyte, necessarily.
For instance, let's say I have a credit card processing server going across the same WAN link as web traffic ( for other workstations ). Obviously the web traffic is lower priority than the payment traffic.
As it applies to cell phones; maybe iphone users use their devices differently from other devices? Who knows, it's more likely cell phone companies bilking their customers ( as always ), but my point is that not all MBs are the same.
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So sell X GiB at Y QOS level. No per month, since that is just a scam. Either they get you with overages or you don't use it all and it expires.
Also Re:Not exactly (Score:2)
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Correction, iPad 3G has commitment free pricing (Score:2)
In the article it states:
"Note that Sprint is the only carrier to offer tablet 3G service without requiring an ongoing commitment; you can start and stop whenever you want -- perfect for the occasional traveler."
But that is true of the iPad plan as well - you can start or stop whenever you like. The Samsung tablet does have that issue with Verizon, which has a fee for stopping service.
Because it subsidizes the phone cost (Score:2)
Part of the data plan's purpose is to subsidize the cost of the phone. That's why they won't let you buy a data-capable phone without the data service. There's no technical reason they can't, they just don't want you to get the discounted phone without paying them back for the discount.
The whole system is stupid. If cell phone providers sold cars, you would get the car for $50, but sign a multi-year agreement to buy gas from them at an inflated price.
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"That's why they won't let you buy a data-capable phone without the data service."
http://expansys.com/ [expansys.com] does. If you've got loads of money: iPhones/iPads, Android, Palm, Blackberry, Nokia etc.
Oh, wait, you mean in the US where you've got weird old network technologies (CDMA), lack of effective regulation and bizarre pricing (pay to get a text message? Who thought that up?!)
In most EU countries you can buy unlocked phones, and if you've got a phone on a contract, once the contract's minimum term is up, you ca
Pricing doesn't work like that. (Score:2)
They're priced different because pricing isn't based solely on the cost to the supplier. Demand, competition, perceived value, price discrimination, etc... all influence the price as well.
Premist is flawed (Score:5, Insightful)
No, they're not charging more in order to make the network "fair" for everyone. They're charging more because they can get away with it because there are no real alternatives for anyone to switch to (especially with the 2-year contracts they're allowed to lock everyone into).
It's just that saying "We're charging more money because we're a company that's driven by making more money" doesn't go over as well as saying "We're charging more money to keep the network fair".
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Peak hour pricing (Score:2)
A megabyte at the hour of peak usage is worth much more than a megabyte in the wee hours. So one reason to charge more for megabytes from USB modems is because they are more likely to be used during business hours than iPhones.
It would be better to make the network completely device agnostic and instead have time-of-day per-megabyte pricing tiers, but that would add complexity.
Not Verizon Droid (Score:2)
How fast does it go? (Score:2)
And now with "4G" speeds, you can effectively use up a 5Gb alotment in a month in just over 30 minutes. At least in theory.
Managed network were not so bad (Score:2)
I remember a while ago, when companies still offered unlimited internet plans... but they were throttling traffic. People made a big fuss about it.
Today, we see unlimited plans for internet and wireless are disappearing, overcharges are common...
The first thing to note of course is that a network (cell-phone or internet...) is not something to be characterized in such a simple manner as cost per MB. There is no cost per MB.
Costs for a network are basically the following
1. Infrastructure costs (routers, e
It's about expected use and willingness to pay (Score:2)
The assumption, as best I can tell, is the same that drives carriers to charge $20/mo tethering fees for using smartphone data plans with a laptop. Basically, they don't expect you to use very much of your monthly plan.
The ipad+mifi deal from Verizon is another good example. If you want just a mifi (for, say, a laptop or an existing ipad), you pay $260 + $40/mo (contract) for 250MB or $60/mo for 5GB. If you buy it with an ipad, you pay only $130 for the mifi device and get the option to buy month-to-mont
Wireless tethering for the WIN (Score:2)
It may be a breach of service contract, but I'll be goddamned if I'm going to buy 4 completely different internet data services, when one is all I need at any given time (except I really do need two as the one at home has to be up all th
Re:Profit! (Score:5, Insightful)
What happens when all the carriers get together and say "I think a Megabyte is worth a dollar more?"
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and nothing of consequence happens from them..
the record industry got caught price fixing for a decade.. what happened? customers got leftover payola crap as a payout - and the they keep right on doing it.
the idea of free market means i should be able to come in and undercut them.. but MaBell is what you call too big to fight via startup.. and it doesn't help that even if you can fight them in the market place they are more than happy to get their in pocket politics to help their fight and make what eve
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the record industry got caught price fixing for a decade.. what happened?
The internet happened, and now most music is "bought" for free. Again, the system isn't instantaneous, but just like karma, it tends to catch up with people.
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but MaBell is what you call too big to fight via startup..
Um, you might want to re-think your example. Not only is she one of the few examples of anti-trust action actually having a major impact on a huge corporation in US history, her entire profit-model prior to 1984 was ripped to shreds by MCI.
Further, it's one of the *very* few examples of government-intervention having a solid, clear benefit to consumers in all of history. I wouldn't be typing this post on the modern internet and people would definitely not be reading it on their smartphones without that ca
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That's called collusion and it is illegal in the US and EU.
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Which is entirely uncapitalistic I must say!
So what's your point?... (Score:2)
It might be illegal if you can prove it, but I'm sure that the heads of the corporations don't scribble it down or send it through email.
The amount of corporate espionage which occurs in any country is only partly funded by a desire to get the goods on the competition.
The rest is funded by a desire to maintain a profitable equality in pricing.
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Actually, it may not even be that involved. It is pretty trivial for competitors to watch each others prices and stay close. In fact, it is the exact same mechanism that allows price-wars to work. In this case though, no one sees a need to try to sweep up the entire market. They've really got no incentive to. None of the major carriers could absorb the customers of one of their peers without crippling their own network.
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If they get together and do that, it's price fixing, and can cost them tens of millions of dollars in fines, and possibly jail time (not likely though). Proving such a thing is difficult, but it has happened before.
However, if there is not enough competition it is fairly easy to come to unspoken agreements on price.
For example*, if there are only two gas stations in town and the price of oil drops, each gas station owner has two options: drop the price of their gas in order to drive more customers to their
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You are welcome to try!
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goodluckwiththatsir
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So why haven't you done that yet?
I mean you'll make tons of money and the world will be a happier place.
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If they lower their rates, then everyone is happy except the new guy, who goes out of business. If rates are raised again, someone else will try it, and down they come again.
If the new guy fixes prices, then he is vulnerable to the same issue - another new guy can undercut him severely.
Pricing is a raise to break-even. It's inescapable, without the influence of government.
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except the new guy, who goes out of business
And the banks and venture capitalists that fronted the money for this fool's errand.
If rates are raised again, someone else will try it
Good luck getting the banks and venture capitalists to front the money for the fool's errand the second time around.
Banks funding capitalist ventures? (Score:2)
Whatever you're smoking, it must be illegal.
You can't even get banks to venture a loan backed by assets.
Corporations are sitting on billions in cash which explains what the banks are doing with the money. NOTHING!
They're paying themselves more interest on the money on hand and less interest on the cash reserves than ever before.
We have the idiots at the Fed to blame for that.
Their policy of fractional percentage DECREASES in the cost of borrowing the Fed's money by the major banks means that it doesn't pay
Re:Profit! (Score:5, Insightful)
Pricing is a raise to break-even. It's inescapable, without the influence of government.
And with the customer having perfect knowledge, and with all possible suppliers having equal access to capitol and no artificial barriers to entry into the market.
Of course with any finite system, without some form of regulation to prevent it, the entity with the control of the largest amount of capitol always "wins" in any multi-round commerce game. Once a monopoly grows, they can almost always maintain and expand it into other areas. If nobody else can raise enough money to build the towers, you cannot start a new cell phone company. And how can you convince a lender to lend to you if you plan on competing based on price against an already established player who can easily drop their prices until you go bankrupt? Yes, someone else could come along again to try to compete on price but they will have a tougher time finding a lender (the last lender lost their shirt remember?) and meanwhile the established player has more money than last time in order to temporarily "compete" with the newcomer.
Don't get me wrong - "artificial" intervention is very often harmful, but in my opinion is also very often necessary to provide the type of ecconomic environment we want to live in.
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the entity with the control of the largest amount of capitol always "wins" in any multi-round commerce game.
I assume you meant "capital", but "Capitol" is an apt Freudian slip given that once you have enough capital, you can buy legislators.
Re:Profit! (Score:5, Insightful)
No, what we need is to standardize the technology used so customers can easily switch carriers, outlaw carrier locking of phones once the phone is paid for, and require carriers to sell transport to each other at reasonable rates. This would allow meaningful competition.
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Re:Profit! (Score:5, Informative)
Not in the least.
Our system is totally to the benefit of the wireless carriers. We even have GSM and CDMA carriers to ensure that phone portability is as limited as possible. The only major carrier that offers to unlock phones once they are paid for is one you probably have heard of, T-Mobile.
When comparing regulation between two Germany and the USA it is always like this.
Re:Profit! (Score:5, Informative)
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and get an unlock code if you were going to travel abroad.
T-mobile does not require you to be leaving the country to let you use your owned property with another carrier. Why does traveling abroad enter into it?
Out of fairness I will say my current carrier is verizon, and I will most likely be leaving them soon as they seem unwilling to have any flashable android devices nor moblin/meego on their network.
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That was why I stated he had probably heard of it.
Thank you for adding nothing of value to the conversation.
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I agree and take it one step further. Why, oh why, aren't cell phone companies required to unlock the phones? Such as, if I pay Verizon outright for a BlackBerry Storm, why aren't they required to unlock the SIM so I can use whatever SIM I want? As is, you have to call the business support number and tell them you're heading over seas and are being given a prepaid SIM card, and then if they buy that they'll check your past credit with them and how long you've had them.
I understand for phones purchased at a
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Supply and demand doesn't work when supply is constrained by the government and one sided contracts lock demand so that it can't chose another supplier if being taken advantage of.
Emphasis mine.
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Who the fuck do you think you are, telling companies how to run their business? You'll get a contract and an oligopoly and you'll like it!
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Supply: Cell network can support X Megabytes per second, at Y cost.
Demand: User asks for 1 Megabyte worth of data.
I don't see where what particular device I'm using to demand that data comes into play on the supply/demand curve. Maybe I'm missing it. The obvious exceptions would be if they are connecting to the network in different ways, LTE vs 3g for example.
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I don't see where what particular device I'm using to demand that data comes into play on the supply/demand curve.
Yes, that is the problem, you don't see it. Demand isn't a two dimensional thing, nor is it calculated only by the MB. It is based upon the number of people wanting a very particular service vs. the ability of all the competition to provide it. It is modified further by raising prices on overages at whatever level they want to set, intentionally dampening demand to a level that is most profi
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It's just like with Cable/DSL. The provider oversells their pipes and charges based upon making a profit from the average user. They take a slight loss on the people who use loads of bandwidth, but make it up in spades on just about everyone else. The cost you see on your phone bill (e.g. $25/mo for a 5GB plan) is based upon the expected usage of smartphones (way less than 5GB.)
Laptops are expected to use more of the provisioned data, so the companies would be taking a loss on most laptop plans if they w
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This is more evidence that our carriers are , in fact, a confusopoly.
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Now that's even more ridiculous. Once again pretty females probably get the best rate.
First they can go into a club when they don't meet dress code, and now they get a bigger discount depending on what they bare.
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What we need is a highly regulated (electric & gas utility style) monopoly that runs the towers & backhaul. They will sell their minutes at a tarrif-regulated price, in bulk, to the resellers who actually provide dial tone, voice mail, customer service and whatever other bullshit data features they want to sell (VZW Apps, media, etc).
In some ways it'd be like Apple's iPhone and the app store relative to AT&T -- Apple is the reseller of those items, AT&T kind of just provides backhaul for th
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If we start getting into telling businesses what to charge, according to OUR ideas of what is fair. Don't like your carrier? Change. That IS capitalism
Fixed it for you. I think you meant to say "if the government starts getting into telling businesses..."
We the people, on the other hand, ARE exactly one half of the capitalism equation.
"given a level playing field" (Score:2)
You must be kidding if you think that Rupert Murdoch (of Fox) isn't talking to Jef Zucker (of NBC) and Steve McPherson (who's now out so it might be Paul Lee) (of ABC) or Les Moonves (of CBS) and the rest of these media moguls when they get together in their conclaves in Aspen or Teluride or wherever the Hell they get together whenever the Hell they get together.
The phase "given a level playing field" shows a charming naiveté on you part which is astonishing given that you're posting on /.
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The phase "given a level playing field" shows a charming naiveté on you part which is astonishing given that you're posting on /.
No, it shows that the problem is the playing field, which has been unleveled by political meddling and payola. We don't need new rules on what companies can charge, which would instead only serve to raise the cost of entry into the market for other players, we need the field to be open and level. *Real* capitalism isn't the problem, it isn't even being practiced. Capitalis
Re:Profit! (Score:4, Insightful)
However, according to the cult of the market, the "Invisible Hand" is supposed to push the retail cost down to the cost of production.
That tells us that the telecoms market is quite unhealthy in the U.S. OR that the theory of markets is wrong.
The problem has been around for as long as phones could actually use data and shows no signs of correction. If the market can't correct any faster than that, it's worthless.
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You have be brain washed into thinking that a consumer having a choice is the pinnacle of capitalism
No, Mr. Knowitall, a free market is where those who are selling a good have equal access to the market place, ie: a level playing field in which to participate, like I said. /me thinks you spent too much time in college and not enough time actually owning and managing businesses.
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You have to get new service using a geographically local area code, and you can't port your number to a new carrier unless your number is geographically local to you.
You can use Google Voice to maintain carrier neutrality (mostly) but that comes with its own set of headaches.
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There used to be a rough grouping by exchange, that doesn't seem to be the case
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The correct way to do it would be by using something like DNS. That way the number behind it all could change and no one would have to know about it
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If we had it to do all over again with today's technology.
Area codes (and prefixes) were allocated based upon population and with respect to rotary phones and mechanical switching equipment. Areas with high population got area codes with the most small numbers (except for 0) because on a rotary dial phone, shorter numbers means that the call can be connected more quickly. Connecting a call more quickly means that the switching equipment is tied up for less time. That is why 0 wasn't used as much--it's th
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Don't underestimate the marketroids. Most of them fully grasp that a flat rate would be more "logical" if their goal was to be fair. Their goal is not to be fair. Their goal is to extract the most money possible from you for the least possible cost. Making their plans simple and clear would be deeply, horribly illogical of them given their goal.
When I went to get my corporate Blackberry a couple of years ago, I had my choice of three models from Verizon and three from AT&T. Two of the models from e
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hey are in it for the money, and this is a way to maximize it. While one flat rate set based on actual network costs + profit would be the most logical, thats never going to happen. The marketroids do not understand logic.
They will charge what people are willing to pay, and that's the end of it. In that context, what they're doing is perfectly logical. Illogical would be charging a flat rate, when people would willingly pay premium rates for tiered pricing.
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the problem is not "one set fee". it's the ridiculous overage charges.
ATT's iPhone plan used to allow 5GB as "unlimited". Then they knocked $5 off the price and put a cap 60% of the original "product". THEN called it flexibility when they offered a 1/2 price plan with 5% of the data.
If ATT needed more money, they could have OFFERED more data for a higher price. You'll notice NONE of the bandwidth based operations do that. If service and data is (for example) $25 for 2GB, then why is the NEXT 2GB not "only"
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Actually, on AT&T, the next 2GB is only $20 more. Actually, they meter by the 1GB for overages, and 1GB is $10. So the first 2GB you have to buy at $25, and every 1GB after that is $10 extra.
With the smaller package, you simply pay $15 per 200MB. That's ... pretty astounding, frankly. I hover right around 200MB per month, and so it turns out that I probably would save money by being on the smaller plan--it would average out. However there's something to be said for feeling secure in the knowledge t
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The iPad (with 3G) is pretty expensive. $630 minimum (but no contract on the data.) The Tab is only slightly less without a contract, but is sold subsidized for, what, about $400? Of course, forcing the data plan on you (and they are expensive) means that it's probably quite a bit more expensive in the long run.
Frankly, I think that Apple saw a new market that they could outright create, and they jumped at it. They own the tablet market right now because they did it first, they did it well, and they sta
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I'm surprised the iPad plan isn't more expensive - anyone who can afford an iPad obviously has money to spare, while those on tighter budgets waited for cheaper tablets to become available.
On the contrary; anyone who can afford an iPad probably has a well-paying job that they didn't get for being stupid. Or is really looking after his or her money and not wasting it on useless stuff, which is why they can afford an iPad. That kind of person doesn't waste their money on an overly expensive contract. You seem to be in that lower middle part of the IQ distribution where you think you have to be stupid to buy a product that is easy to use. Other people realise that buying a product that is easy t