B. M. Mitchell and I. Vogelsang, "Telecommunica- tions Pricing: Theory and Practice," p.p. 73-74, Cambridge University Press, 1991.  Home/Search   Document Not in Database   Summary   Related Articles   Check

.... pay x (cache, bandwidth,etc) Figure 1. Sample pricing function. functions are non crossing, i.e. P k 1 (x) P k (x) k =1, K. In economics literature the non crossing assumption for consumer demand functions is considered as the conventional approach in calculating the nonlinear tariffs [10]. In the cache allocation framework this assumption may impose some restrictions on the distributions of publisher request arrivals. However, if the publisher utilities are the weighted versions of their hit probabilities, then this assumption is naturally satisfied. In many cases, the utility of ....

B. M. Mitchell and I. Vogelsang, "Telecommunica- tions Pricing: Theory and Practice," p.p. 73-74, Cambridge University Press, 1991.

.... that usage based pricing is needed in order for network resources to be used efficiently [MMV95a] Furthermore, there is a large number of well understood economic models and a large amount of empirical results for networks that offer a limited range of services, such as the telephone network [MV91] An important feature of such networks is that once a user is granted a connection, the resources associated with the connection remain reserved throughout its duration. The case of broadband networks is far more complex [CSSM95] Traffic has different characteristics, which may vary in time, ....

B.M. Mitchell and I. Vogelsang. Telecommunications pricing: Theory and Practice. Cambridge University Press, 1991.

....do, or did ever, exist in telecommunications [Fowler86] Perez94] state sanctioned oligopolies are still being created; one need only regard how recent exorbitant wireless licence fees act to restrict new market entrants. Models for oligopoly pricing are similar to those for monopoly pricing [Mitchell91]) The price levels and structures of telecommunications will be based on economic models that may or may not represent reality for the foreseeable future; in effect they dictate reality. Accounting systems must be capable of representing and interpreting these structures to price services ....

....framing tariffs. The goals of FCC regulation were to be fairness and efficiency, where fairness encompasses the fundamental goals of reasonable rates, the absence of unjust discrimination and universal 8 service [Fowler86] Economic efficiency can be defined in terms of welfare maximisation [Mitchell91], where welfare is a function of the utilities of all the members of society . Regulators sought a theoretical basis for rate structures and levels, albeit while overall levels could be largely dictated by executive fiat. Unable to use the optimal price basis (i.e. price at marginal cost ) ....

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Bridger M. Mitchell and Ingo Vogelsang. Telecommunications Pricing: Theory and Practice. Cambridge University Press, 1991.

....meet the demands for simplicity and flexibility. This paper pictures pricing of communication services as the outcome of a competition between the need to optimize on one hand, and to cater to user preferences for simplicity on the other. This view is unconventional. Most standard works, such as [MitchellV], concentrate on optimizing some conventional quantitative utility function, and treat customer desires as irrelevant, or else as irrational annoyances that interfere with clever and efficient schemes. In particular, such works treat preferences for flat rates dismissively, if at all. For example, ....

....their ISP s hourly rates instead of the standard flat rate that they choose. Even when true flat rate is not available, block purchase plans (in which users pay a fixed fee for a large block of calling time) have been popular. Consumer usually buy considerably larger blocks of time than they use [Palmeri, MitchellV]. Recently, further detailed evidence of the attractions of flat rate plans has been obtained in the carefully controlled INDEX experiment. This experiment, described in [AltmannRV, EdellV] tested users willingness to pay for various Internet access options. Most of the INDEX investigators ....

B. M. Mitchell and I. Vogelsang, Telecommunications Pricing: Theory and Practice, Cambridge Univ. Press, 1991.

.... the user the right to send or receive 100 MB of data over a week through the lowest priced channel, or 60 MB through the next most expensive channel, say) Such pricing has worked well in long distance telephony in the United States, with consumers typically paying for more capacity than they used [22]. PMP offers a simple plan with constant and easily understood pricing, which is an advantage, as it fits consumer desires. It does not offer any service guarantees, however. Such guarantees are popular. However, few guarantees are absolute, and most purchases are made on the basis of ....

Mitchell, B. M. and Vogelsang, I. Telecommunications Pricing: Theory and Practice, Cambridge Univ. Press, 1991.

....the traditional Internet model, and for further references, see [McKnightB] for example. However, those arguments are based on experience with an environment that is likely to change drastically. It is already an environment far removed from the traditional telecommunications world studied in [MitchellV], for example, and will diverge from it even further. As mentioned above, long distance data transport prices have been rising in the last few years. The basic fiber optic network that carries both voice and data traffic was designed primarily for voice, and until a few years ago, most of the ....

B. M. Mitchell and I. Vogelsang, Telecommunications Pricing: Theory and Practice, Cambridge Univ. Press, 1991.

.... the user the right to send or receive 100 MB of data over a week through the lowest priced channel, or 60 MB through the next most expensive channel, say) Such pricing has worked well in long distance telephony in the United States, with consumers typically paying for more capacity than they used [MitchellV]. PMP offers a simple pricing plan with constant and easily understood pricing, which is an advantage, as it fits consumer desires. It does not offer any service guarantees, however. Such guarantees are popular. However, few guarantees are absolute, and most purchases are made on the basis of ....

B. M. Mitchell and I. Vogelsang, Telecommunications Pricing: Theory and Practice, Cambridge Univ. Press, 1991.

....will be noted, most instances of the models lack this property and give rise to ruinous price wars in the absence of collusion. Our analysis of competitive dynamics is set against a background of research on strategies for pricing electronic goods by a monopolist or single firm, for example [1, 2, 3, 8, 10, 11]. Summary discussions of that work appear in [4, 9] The present research, which is overviewed in [4] was prompted by the question of what might transpire when competing firms offer similar products but use different pricing policies. A more specific motivating question arose from the observation ....

Mitchell, B. M., Vogelsang, I.: Telecommunications pricing: Theory and practice. Cambridge, U.K.: Cambridge University Press 1991

.... the economics of voice phone systems, there have been proposals for lowering costs by providing less capacity, so that many calls would be blocked during peak hours, and it would be the persistent callers, who kept redialing (and thus presumably valued their calls the most) who would get through [MitchellV]. However, this idea was never taken seriously. The switched voice system has attracted an enviable reputation for quality and usability by meeting even peak demands. Data traffic grows much faster than voice traffic, and is inherently much more bursty. A good example is that of a dedicated 128 ....

....to encourage use in off peak hours through discounts. The late start at 8:30 pm and early phaseout at 4:30 am were presumably designed to avoid diversion of regular business calls into lower cost periods. Extensive study of economics of telecommunications did not start until the 1960s (see [MitchellV] and the references there) It is interesting to consider for comparison the electric power industry. There economic concerns were at the forefront of business planning, and an extensive literature was generated at the end of the 19th and in early 20th centuries. For a brief overview of the ....

B. M. Mitchell and I. Vogelsang, Telecommunications Pricing: Theory and Practice, Cambridge Univ. Press, 1991.

....ranges for prioritybased networks; finally, Section 6 summarizes our main conclusions. The Appendix contains the proofs of the propositions in Section 4. 2: Pricing Approach The pricing of services in circuit switched networks, and in particular telephone rate structures, is well understood [9]. However, pricing packet switched networks presents additional challenges. Since these networks rely on statistical multiplexing, the reservation of resources is ideally kept to a minimum, and measuring usage is more difficult and costly. The current debates on how to charge for Internet services ....

Bridger M. Mitchell and Ingo Vogelsang. Telecommunications Pricing -- Theory and Practice. Cambridge University Press, 1991.

....dependent upon its multi variate optimization capabilities, and more importantly, consumer acceptance rejection of a complex pricing structure. 5 Q 0 N P J P N c slope = PA Figure 2 Total outlay vs. number of articles consumed Optional two part tariffs can be either ex ante or ex post in nature (Mitchell and Vogelsang, 1991, page 95) In an ex ante arrangement, readers elect to join either the subscriber group or the article on demand group prior to consumption. Knowing one s expected consumption behavior is critical in making the right decision. An article ondemand reader who expects to read only a few ....

Mitchell, B.M., and I. Vogelsang, 1991, Telecommunications pricing: theory and practice (University Press, Cambridge).

....pricing. These results are documented in [4, 6, 7] Similar preference for subscription pricing was observed in the choices made by customers signing up for various AT T long distance calling plans in the 1980s, in which many people paid for plans that provided more calling than they actually used [8]. More recently, this same observation was made about a flat rate calling plan offered by SBC in the Rio Grande area [11] In the online service area, it has also been common for customers to pay for larger blocks of time than they used. There are three main reasons that probably lead consumers ....

B. M. Mitchell and I. Vogelsang, Telecommunications Pricing: Theory and Practice, Cambridge Univ. Press, 1991.

....fair resource sharing. Experiments demonstrate how our approach can differentiate connections with different mean rates, and show that it leads to adequate bandwidth utilization for anticipated link capacities and traffic burstiness. 1 Introduction There are well understood models, see [9], which allow for the optimal pricing of networks such as the telephone network, where resources are allocated for the whole duration of a connection. These models are relatively simple since there is usually a straightforward mapping of a service to a one dimensional quantity that models the ....

B.M. Mitchell and I. Vogelsang. Telecommunications pricing: Theory and Practice. Cambridge University Press, 1991.

....the traditional Internet model, and for further references, see [McKnightB] for example. However, those arguments are based on experience with an environment that is likely to change drastically. It is already an environment far removed from the traditional telecommunications world studied in [MitchellV], for example, and will diverge from it even further. As mentioned above, long distance data transport prices have been rising in the last few years. The basic fiber optic network that carries both voice and data traffic was designed primarily for voice, and until a few years ago, most of the ....

B. M. Mitchell and I. Vogelsang, Telecommunications Pricing: Theory and Practice, Cambridge Univ. Press, 1991.

....for abandoning the traditional Internet model, and for further references, see [11] However, those arguments are based on experience with an environment that is likely to change drastically. It is already an environment far removed from the traditional telecommunications world studied in [12], for example, and will diverge from it even further. As mentioned above, long distance data transport prices have been rising in the last few years. The basic fiber optic network that carries both voice and data traffic was designed primarily for voice, and until a few years ago, most of the ....

B. M. Mitchell and I. Vogelsang, Telecommunications Pricing: Theory and Practice, Cambridge Univ. Press, 1991.

.... the user the right to send or receive 100 MB of data over a week through the lowest priced channel, or 60 MB through the next most expensive channel, say) Such pricing has worked well in long distance telephony in the United States, with consumers typically paying for more capacity than they used [9]. PMP offers a simple pricing plan with constant and easily understood pricing, which is an advantage, as it fits consumer desires. It does not offer any service guarantees, however. Such guarantees are popular. However, few guarantees are absolute, and most purchases are made on the basis of ....

B. M. Mitchell and I. Vogelsang, Telecommunications Pricing: Theory and Practice, Cambridge Univ. Press, 1991.

.... right to send or receive 100 MB of data over a week through the lowest priced channel, or 60 MB through the next most expensive channel, say) Such pricing has worked well in long distance telephony in the United States, with consumers typically paying for more capacity than they used 16 [MitchellV]. PMP offers a simple pricing plan with constant and easily understood pricing, which is an advantage, as it fits consumer desires. It does not offer any service guarantees, however. Such guarantees are popular. L. L. Bean has developed an enviable reputation, partially as a result of its ....

B. M. Mitchell and I. Vogelsang, Telecommunications Pricing: Theory and Practice, Cambridge Univ. Press, 1991.

....is that once a user is granted a connection, the resources associated with the connection remain reserved throughout its duration. In this sense, the network operates in a binary mode, i.e. it either grants the standard service, or it blocks the request. There are well understood models, see [13, 16], which allow for the optimal pricing of such network services, in order to maximize the benefit of the users that share the corresponding resources. These models are relatively simple since there is usually a straightforward mapping of a service to This work was supported in part by the ....

B.M. Mitchell and I. Vogelsang. Telecommunications pricing: Theory and Practice. Cambridge University Press, 1991.

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Mitchell, Bridger and Ingo Vogelsang, (1991) Telecommunications Pricing: Theory and Practice, New York: Cambridge University Press.

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Bridger M. Mitchell and Ingo Vogelsang. Telecommunications Pricing: Theory and Practice. Cambridge University Press, 1991.

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