Always Bring Your Wireless Stuff
While I was on the plane to the West Coast, I had the honor to be sitting next to a distinguished public figure. Since I want to honor his privacy, I will not say who he was. We had a brief discussion as we observed that he was reading the Wall Street Journal print edition and I was reading it on the Kindle. I tried to demonstrate the coolness of the Kindle and he was mildly intrigued. For the next 5 hours of flight time, he devoured his WSJ, ripping out many pages, taking copious notes on the torn articles, and filing then in a folder. Try that on a Kindle!
I rented a car from National and wanted to try their in-car navigation system and compare it to my GPS-enabled Google Maps and the VZW Navigator application. The Street Pilot from Garmin behaved like a bad "Saturday Night Live" sketch; it took many minutes to find its satellites and thus, its location. It barked out directions in quick succession: "Turn Right, Turn Right, Recalculating, Turn Left, Turn Left" -- the screen would have an arrow pointing to the right and the voice would say, "Turn left." It was both sad and amusing. 
We finished our meetings and settled into the Continental Presidents Club at the airport to wait a couple of hours for our flight. I connected to the free WiFi network that Continental provides and started to work. The problem was that the effective bandwidth I got through their WiFi was clocked in a not-so-impressive 20 KB/sec. 20KB/sec -- that is so last century!
Flat Rate for Wireless: Is this the way of nature for all telecom services?
Flat Rate for Wireless: Is this the way of nature for all telecom services?
In the last couple of days, the major carriers have announced competing flat-rate wireless deals. No more counting minutes. These new plans might be as significant as the original AT&T one-rate plan that revolutionized wireless pricing. I say “might” because the price is still rather high and the plans all but eliminate the family plan users. For the heaviest of wireless users, this plan can save money and eliminate hassle, and follows on the heels of similar flat-rate plans for wireless messaging and data usage.
A side benefit for the carriers is the eventual reduction in billing complications.
Do all telecommunication services eventually migrate to a flat-rate pricing structure when they mature?
I say Yes. With excess capacity and variable demand, flat-rate pricing is a good option.
Cable and satellite television are flat rate, most home wire line services (circuit and VOIP) are flat rate, Internet services are flat rate. As a communication service matures, the variable rate of the next bit approaches zero. As the variable cost of a new subscriber is virtually eliminated, the flat-rate pricing schemes emerge.
The value-added services that are upsells on these flat-rate services, tend to be themselves flat-rate services. Examples are HBO for $15/month, Navigator services for $9.99/month, Internet Virus protection at $5/month, etc.
With variable delivery costs plummeting, the biggest expense becomes attracting a new subscriber and retention once a subscriber signs up for the service.
The exceptions to this trend are royalty and license fees for media and content. The creators of content expect to be paid for the distribution of their intellectual property. This is a very logical assumption.
The technology that distributes their content is training the public to expect monthly subscription prices. It is inevitable that most media will also be purchased as a flat-rate subscription. The key will be the manner in which the content creators are paid for their product, since you cannot generate good music, video, games, ringtones, books, etc., at zero variable cost.
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