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Wireless Networking Networking

An Algorithm To Facilitate Uber-Style Dynamic Phone Tariffs (thestack.com) 75

An anonymous reader writes: A new paper proposes an algorithm to help network providers furnish 'surge' pricing for mobile data and other network communications, citing a 50% shortfall between demand and capacity over the next five years as an indicator that consumers may have to be shepherded out of the congested times and areas in order for normal service to continue to be maintained. Just don't tell any of the people in charge of airport wireless networks.
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An Algorithm To Facilitate Uber-Style Dynamic Phone Tariffs

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  • Everything that is old is new again.

    • Everything that is old is new again.

      Except these new rates would not be time-based, but congestion based.

      • Everything that is old is new again.

        Except these new rates would not be time-based, but congestion based.

        And you'll be able to pay extra for "premium service/"

      • by Nutria ( 679911 )

        I bet that if you graphed out the busiest times for cell phone networks, they'd match pretty close to AT&T's old time-based schedule?

        Why? Because AT&T wasn't stupid, and didn't just pull shit like this out of their arses.

        • "I bet that if you graphed out the busiest times for cell phone networks, they'd match pretty close to AT&T's old time-based schedule?

          Why? Because AT&T wasn't stupid, and didn't just pull shit like this out of their arses."

          When rates varied at different times of the day teenagers didn't have cell phones. Things have changed drastically since those days. In fact, they often had very restricted access to the house phone since many people didn't have call waiting and when one was on the phone nobody

          • by TWX ( 665546 )
            Age wasn't relevant. Time-based rates were based on usage model on the network. Calling it a congestion charge may have confused consumers, so they called it a time-based rate and simply defined tiering based on previous usage patterns, and after behaviors changed, would modify those over time to correspond better with usage models.

            It's the exact same thing that power companies do with power usage, if one is on a time-of-use plan then the kW/h price is higher in the first couple of hours after people g
    • ...The can just fucking upgrade their networks.

  • Disaster "surges" (Score:3, Insightful)

    by BenJeremy ( 181303 ) on Saturday November 14, 2015 @10:53PM (#50933039)

    Great, let's charge people 5000% of their rates when something terrible hits, like a terrorist attack or some sort of natural disaster, and penalize people for letting people know they are alright or trying to track down their loved ones to make sure they survived!

    • by Ichijo ( 607641 )

      It's either that, or get NO service during a disaster. Think very, very carefully before you decide which option is better.

      • by pepty ( 1976012 )

        It's either that, or get NO service during a disaster. Think very, very carefully before you decide which option is better.

        or just give emergency services first priority, text messaging 2nd, email 3rd, ...

      • by Dagger2 ( 1177377 ) on Sunday November 15, 2015 @02:06AM (#50933545)

        In theory. In practice, the result is that the provider is strongly encouraged to under-provision their network so they can charge extreme rates for normal use, citing "high" utilization as an excuse. So you end up with a poor experience at all times, rather than just during disasters.

        It'd work well if we had some kind of requirement in place that mandated capacity upgrades such that the system only approaches max capacity less than x% of the time, where x is small. But that's not going to happen.

        • by urdak ( 457938 )

          In theory. In practice, the result is that the provider is strongly encouraged to under-provision their network so they can charge extreme rates for normal use, citing "high" utilization as an excuse.

          Exactly. Moreover, it becomes impossible to compare prices of two competing networks. You can't say "AT&T charges me 10 cents a minute, Spring charges me 15 cents a minute, so I'll chose AT&T" - instead, one company might nominally say their price is 10 cents a minute, but during 90% of the day, or in the area where you work, it will claim there is congestion so it will actually charge you 50 cents a minute.

        • by martas ( 1439879 )

          In practice, the result is that the provider is strongly encouraged to under-provision their network so they can charge extreme rates for normal use, citing "high" utilization as an excuse. So you end up with a poor experience at all times, rather than just during disasters.

          How is that any different from charging more for their service, which they are already free to do? It might give them a tiny sliver of a PR defense, but that won't stop people from switching providers. Phone service, unlike wired internet, is actually a competitive market.

        • by Ichijo ( 607641 )

          In practice, the result is that the provider is strongly encouraged to under-provision their network so they can charge extreme rates for normal use, citing "high" utilization as an excuse.

          Is it still surge pricing if the surge price is charged all the time?

      • It's either that, or get NO service during a disaster.

        Why?

    • by Anonymous Coward

      The whole point of "surge" pricing is to ensure that people that *really need* something can still get it (albeit at vastly increased cost) while the people who don't really need it decide it's too expensive. Unfortunately the assumption is that there is a direct relationship between how much someone wants something vs how much they are willing to pay. This is not actually the case...people who have more money can afford to pay more in absolute terms without having it impact their lives as much.

      So hypothe

      • by gnupun ( 752725 )

        The whole point of "surge" pricing is to ensure that people that *really need* something can still get it

        Yeah, no. The purpose of surge pricing is to gouge customers who want the service desperately (and are therefore willing to pay more). Since uber is not like a traditional cab company with a fixed number of drivers, they can easily increase supply of drivers during high demand times to ensure proper supply. But they don't do that.

        Go google what experienced uber drivers do when surge pricing hits an area

        • Since uber is not like a traditional cab company with a fixed number of drivers, they can easily increase supply of drivers during high demand times to ensure proper supply.

          Okay, I'll bite. HOW can Uber "easily increase supply of drivers during high demand"?

          I'm going to have to assume you think that Uber has the legal authority to require, for instance, that I (or you, for that matter) work for them during high demand times, whether you want to or not. Alas, that's not the case. Uber can't require me to

          • by gnupun ( 752725 )

            Okay, I'll bite. HOW can Uber "easily increase supply of drivers during high demand"?

            One way would be to offer a bonus or reduce their cut of the fare from 25% to 20 or 15% during high demand times. Since more people are traveling during high demand times, the cost of travel (i.e. "waiting for passenger" time + traveling cost between two fares) is low. While their per passenger profit is reduced, they make it up in volume.

            I'm going to have to assume you think that Uber has the legal authority to require, f

        • by martas ( 1439879 )

          The purpose of surge pricing is to gouge customers who want the service desperately

          It's funny how you can say literally the same idea as the person you responded to, but make it sound bad by using negative words like "gouge" and "desperately". Without any sort of explanation as to why his characterization is invalid.

          • by gnupun ( 752725 )

            Without any sort of explanation as to why his characterization is invalid.

            I explained it right after I made the statement.

            There's a bill to ban surge pricing [capitalnewyork.com] in New York.

            "The ride-sharing concept is great; who wouldn't want an alternative like this?" Williams asked. "Thereâ(TM)s great benefit to this, especially in metropolitan areas, but nobody wants to be gouged eight or 10 times the normal fare."

            You still want to argue it's not gouging?

            This is what the parent post said:

            The whole point of "surge" pricing is to ensure that people that *really need* something can still get it

            Wrong. The whole point of surge pricing is to only offer taxis to those who can afford it, screw the non-rich folks. That's gouging.

            • by martas ( 1439879 )
              Yes, and it's your choice to interpret surge pricing as necessarily inevitably excessive. You haven't explained why there can be no instance of non-predatory surge pricing.

              Wrong. The whole point of surge pricing is to only offer taxis to those who can afford it, screw the non-rich folks. That's gouging.

              But for some reason, you haven't broken into an art gallery and stolen a Picasso to give it to some of those non-rich folks. And before you tell me that a taxi is different because it's a basic necessity, 1) there is already a federal almost-ban on surge pricing during disaster events, 2) Uber isn't a monopoly, 3) there is a difference be

    • Great, let's charge people 5000% of their rates when something terrible hits

      Yes, we should do exactly that: encourage people to send a quick "I'm OK" text or 30-second call, then get off the air so everyone else check in. If you want to yak, just wait an hour until the surge is over.

    • by martas ( 1439879 )
      Price gouging is already generally illegal. If you're worried about excessive disaster surges, talk to your local, state, or federal representatives to put caps, or lower existing ones, on the maximum amount you can be charged, or to put in place a policy of especially low caps in the case that a state of emergency is declared.
  • by ElitistWhiner ( 79961 ) on Saturday November 14, 2015 @11:02PM (#50933061) Journal

    It's called herding. Like cattle to slaughter. When you own the processing plant and control the market price - it's a duopoly data-feedloting.

    • In this analogy, there are four competing processing plants (VZW, Sprint, AT&T, T-Mobile) that determine the wholesale price, and there are plenty of MVNOs that determine the retail price.

  • Amazon Model (Score:5, Insightful)

    by Luthair ( 847766 ) on Saturday November 14, 2015 @11:07PM (#50933063)
    Maybe it would be better if they followed the Amazon model where they built the infrastructure to support the surges and turned the excess into a viable business instead of mimicking a glorified bandit taxi dispatcher that has never been profitable.
    • Building a few huge data centers to handle lots of customers that each have small surges (relative to your capacity) at different times than each other is a far easier task than deploying a national network that can have huge surges relative to your capacity at any given location. Even if they litter the streets with micro/fempto cells on every block, it still would not be enough to handle large temporary gatherings of people such as: conventions, block parties, marathons, protests, etc. Cell networks also

    • First, there's no shortage of interurban data links for these companies to use if they're willing to. A shortage of infrastructure is a myth.

      Second, the customers will indeed abscond, but not to conventional telephone companies.

      Anyone who is considering how to jack up voice call pricing is moving around deck chairs on the Titanic.

  • Doesn't anyone remember Enron and California's electricity demand pricing games that ripped off consumers for millions by manipulating the demand metrics?
    Demand based pricing is just asking for a scam. Also who's bright idea was it to bring all the uncertainty of a dodgy stock market into the consumer space?

    As for Uber, it's not just demand pricing but the age old nastiness of piecework with a deliberate lie of "ride sharing" on top. If the car wasn't going that way whether the customer was there

  • by nitehawk214 ( 222219 ) on Saturday November 14, 2015 @11:24PM (#50933103)

    They get paid more the worse their network is. Yeah, great idea, I am sure customers will love this.

    • by Ichijo ( 607641 )

      They get paid more the worse their network is.

      More per customer, yes. But when you're bleeding customers because you haven't invested in the network in order to keep prices low, that's little consolation.

      So I wouldn't worry. The problem will solve itself, if we allow it to.

      • by mwvdlee ( 775178 )

        Yey perfectly idealized capitalism!
        The customers will just go to a competitor who did invest in their network.
        Except that those competitor won't exist because it's far more profitable for all of them to stick together in not upgrading.

        • by Ichijo ( 607641 )

          Well, that's not the fault of surge pricing.

          Surge pricing is how eBay works, and it has had great results in San Francisco [streetsblog.org], so we know from experience that surge pricing is a good thing, as long as the price is set at market equilibrium. The real problem with dynamic phone tariffs, if any, lies elsewhere.

  • The practices of nudging and variable rates need to DIAF and stay dead.

    Fixed rates have served quite well.

  • by ljhiller ( 40044 ) on Saturday November 14, 2015 @11:39PM (#50933139)
    Last year Uber quadrupled their prices for people trying to leave downtown Sydney during a hostage standoff. Uber style phone tariffs means that if terrorists kill 100-1000 people in a town, it will cost $50 for people to communicate their survival to concerned family members, because after all, that's what people will pay, right? So it's all good.
    • by Kjella ( 173770 )

      Last year Uber quadrupled their prices for people trying to leave downtown Sydney during a hostage standoff. Uber style phone tariffs means that if terrorists kill 100-1000 people in a town, it will cost $50 for people to communicate their survival to concerned family members, because after all, that's what people will pay, right? So it's all good.

      Or maybe lovesick teenagers will get off the phone so that important calls and messages will actually get through. It's called price gouging when there's no drop-off in demand, just increase in profits but usually there's a lot of non-essential phone traffic. That said, ordinarily I'd think we're building out so massive bandwidth for "nice-to-have" streaming video and whatnot that it shouldn't be any problem to choke and re purpose that to provide basic emergency service. Because what your loved ones need t

      • by dbIII ( 701233 )

        Or maybe lovesick teenagers will get off the phone so that important calls and messages will actually get through

        Really?
        Those ones that run up bills in the hundreds at normal rates?

    • At face value quadrupled prices seems bad but it incentivized drivers to pick up people, putting their own lives at risk in the process, rather than just leaving everyone stranded there. It may have even enticed some drivers to head towards the danger rather than staying comfortably away. Depending on local laws they sometimes have to cap the surge pricing in disaster/emergency situations so if you don't like the idea inflated prices during these events then perhaps you should try to get your laws changed.

      I

  • The FCC regulates phone call pricing. Not completely, but to an extent where an Uber-style congestion based pricing would be a non-starter. Just like local government taxi regulations regulate taxi rates making Uber's congestion based pricing illegal.
  • last time I was at O'Hare the wifi at the airport was a lot better than gogo in flight wifi.

    Although that was a few years back.

  • by enrevanche ( 953125 ) on Sunday November 15, 2015 @01:36AM (#50933473)
    This would be a nightmare for users. When finding a ride using Uber, it is easy to decide if you accept the price. With phone/data surge pricing you will have to constantly check the rate every time you use the phone for something. The first provider that tries this will no longer have any capacity issues, not because the algorithm solves the problem directly, but because there will be a mass exodus of customers.
    • This would be a nightmare for users. When finding a ride using Uber, it is easy to decide if you accept the price. With phone/data surge pricing you will have to constantly check the rate every time you use the phone for something.

      The phone could notify you when surge pricing is in effect. A simple icon in the status bar at the top would work well. Pull your phone out, notice that data currently costs 3X what it normally does, then decide you'll send a text tweet about your meal, and send the video later after surge pricing ends. The services that consume the most bandwidth are, by and large, the least critical, and a simple indicator would make it easy to decide to avoid heavy bandwidth usage during peak usage times. Services on you

    • by martas ( 1439879 )
      Well, I think there would have to be some minimal temporal granularity to it, so the price isn't changing by the second. Also, I think they should be required to get explicit consent before applying the surge price, like a popup saying "surge pricing in effect for the next hour, accept or limit to 3G speeds?"
  • Any network implementing this can say goodbye to Common Carrier status and would likely lose all Universal Service Funds.

  • "...citing a 50% shortfall between demand and capacity over the next five years..."

    Assuming that even happens, that will more properly be known as an "unexploited opportunity," which in capitalism is like a vacuum, which is that thing nature abhors. And considering the fact that the costs of running a network of a given size, don't increase at all during demand peaks, I think someone who knows how to get the job done for a reasonable fixed price will step in and get it done. Might even snatch the market

  • Basically all this does is provide further incentive to build sub-spec networks and oversubscribe the fuck out of them so that companies can eake every last cent out of the customer that's possible to get, while providing shit service.

  • citing a 50% shortfall between demand and capacity over the next five years as an indicator that consumers may have to be shepherded out of the congested times and areas in order for normal service to continue to be maintained

    No, it means the greedy bastards who run the telcos need to invest in their damned infrastructure.

    Consumers do NOT need to be fucking shepherded into making calls at 10pm, the people who keep gouging us for telecommunications need to actually spend some of the massive amounts they char

  • Great, a new way to justify charging more for a service just when it's needed the most.

    Will the wonders of marketing never cease??

  • As used by the Corporation Commissions of the various US states and the FCC, telecommunication carriers *must* publish a tariff, generally it must be approved [or if not specifically then it must be in line with previously approved guidelines], and only then charge consumers what it says.

    Using the "uber model" of dynamic pricing -- whether a good idea or not -- is contrary to current US law and FCC regulations.
    Really.

    That brings up two questions:
    1. SHOULD it happen?
    2. What would be the result?

    I'll get to #1

  • Well, let me start by saying that I don't believe that the vast majority of data usage falls under anything other than personal entertainment, the big problem I'm seeing with comparing this to Uber is that Uber is fairly unambiguously a luxury. It is offered as an alternative to taxi's ( another luxury ) or walking/public transportation, which not subject to their business model. By making "surge pricing" you are not making it easier for people who aren't using it for entertainment to use it - you are makin
  • It's irrelevant (at least for voice) as providers have already or are in the process of moving away from the voice billing model and towards the data billing model where people pay for data but not, in most cases, for voice.

    If there's been a lack of investment in pure voice infra this move to data only billing would be the reason.

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