Re: BA's new flat rate -- its $249 per month for residents

["Fred R. Goldstein" <fgoldstein@bbn.com>]

  It's on their web page now.  The will file for five call packs and one flat
  rate.
  
  Pricing:
  
  Measured                $23.50
  20 Hour Callpack         31.00
  60 Hour Callpack         45.00
  140 Hour Callpack        60.00
  300 Hour Callpack        90.00
  500 Hour Callpack       120.00
  Flat Rate               249.00
  
  Go over your call pack and it's the full 2c day, 1c night usage fee.
  
  They have the temerity to call this a major rate reduction!
  
  Of course it is, compared to the old callpacks, but then their total
  residential ISDN sales were somewhere below Lamborghini's car sales.
  At the new rates, they're down to the Ferrari or maybe Porsche range.
  
  I guess they Just Don't Get It.
  
  BTW, what I'd be happy with:
  
  Measured                $30  (mainly for "toll only" and inbound users)
  140 Hour "virtual flat"  45-50  (average use will be ca. 40 hours)
  Semipermanent            90-100
  
  I've been thinking about BA's local cost structure.  It is not uniform
  between their jurisdictions.  In Washington and its environs, the local
  calling radius is quite large.  This could, I'm guessing, result in an
  honest LRIA (long-run incremental analysis) cost-per-minute of local ISDN
  usage in the 0.5c range, albeit much lower off peak.  It is reasonable to
  base this upon trunk cost and switch capacity (trunk port and matrix) costs,
  but not upon SS7 network costs (a stunt they tried to pull, attributing the
  entire cost of upgrading to SS7 in 1991-1992 to the allegedly-planned
  introduction of residential ISDN!).
  
  Trunk costs depend to some extent upon distance and the need for tandem
  switching, which is also a function of distance.  So while suburban
  Washington's "average" local call might go quite far, ditto Baltimore's,
  Pennsylvania and New Jersey have tiny little calling radii.  Most of metro
  NJ goes maybe six miles before you hit toll.  Teaneck to Passaic, for
  instance, is a toll route though it's only around five airline miles.
  Philadelphia has "zone" rates beyond 8 miles or so, which are, to use the
  telco euphemism, "contributory".  So the average cost per minute *within
  that small radius* is probably a tad bit lower, I'm guessing around 0.3cpm.
  Remember these rates are based on the average.
  
  Experience in other states with flat-rate resi ISDN shows average usage in
  the 40 hour range, more or less.  And a few very-high (7x24) users throw
  these off.  The lowest "90% of ISDN users" probably have an average under 40
  hours. If we take 40 hours of that at .5cpm, then it's $12/month in actual
  cost (VA/MD/DC).  Move it to  PA/NJ/DE and it's lower.  However, the
  non-traffic-sensitive (NTS) portion of the line is not low.  While the
  hardware cost at a high level of deployment isn't all that much, today's
  lower volumes frankly are costly, so I'm willing to see a "base" NTS as high
  as $30, which is maybe $20 above resi POTS (before EUCL).  So mark up the
  usage *cost* a little and you get a "virtual flat" rate of $45-50.
  Everybody wins.
  
  The 7x24 hour users are really a special case.  That is costly in trunk
  usage, so it shouldn't be encouraged (POTS or ISDN!).  But it's really more
  of a leased-line alternative, marketed in some places (like Oz) as
  "semipermanent connection".  I don't have a problem with charging these
  special-case users a reasonably high cost-based fee, like $90 (PA/NJ/DE) - $100.
  
  In the meantime, flame on!
  ___
  Fred R. Goldstein      fgoldstein@bbn.com  
  BBN Corp.              Cambridge MA  USA    +1 617 873 3850