Slow Friday, so consider comparing wireless not to tomatoes, but to water. Where water is plentiful, there's no need to ration it. On the otherhand, the infrastructure must be paid for. In Britain, and I dare say, NZ, water was paid by a fixed levy on each householder. (Yes that levy was linked to the value of the house, and you can rant about that if you like. It was not explicitly linked to consumption although expensive houses might more dishwashers, lawns, etc.)
The major part of the cost was in laying the pipes. If more water is used, then at some stage larger bore pipes and bigger reservoirs are necessary, but the major cost is laying and maintaining pipes of any size. Thus it made sense to provide water at a fixed cost independent of flow. This breaks down in droughts, and ad hoc rationing is imposed. The rationing is somewhat arbitrary, but it was cheaper than installing and monitoring millions of meters. I left Britain 20 years ago. It seemed then that if it didn't rain for a week or so, there would be rumblings of hose pipe ban. Consumption had become important. People were encouraged to install water meters with the hope that their costs would be reduced. I don't know how completely the system was changed.
Leap is like an old Municipal Water Board. Expensive infrastructure that is likely to be underused for some time. Until there is a capacity issue, let them drink all they like. It's expensive - not to meter, but to charge by the byte and to resolve the inevitable disputes. Cheaper, for now, to have all you can drink.
I like the efficiency of dynamic pricing, but costs of administration are a factor, and they dominate when the resource is not scarce. Imagine Leap and a competitor, identical in equipment and spectrum, everything but billing practice. Assuming Leaps is cheaper, as I think it is, the it could always undercut the competitor. Eventually Leap will start to have capacity problems. Then, and only then, the competitor and manage demand so that anyone will always be able to get through for the same average cost. At that stage the competitor should start to take customers from Leap. I think that will be a while.
Ashley |
