Rational Economic Behavior and the Internet: Why You Want to Pay Per Packet

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Rational Economic Behavior and the Internet: Why You Want to Pay Per Packet

Executive Report
Posted April 30, 2010 in Business Technology & Digital Transformation Strategies

Domain

Market mechanisms

Assertion 191

The current mode of flat-rate pricing for wired and wireless data communications discourages space-efficient software, encourages unlimited consumption, and is unsustainable. Rising capital and operating expenses to keep pace with increasing demand will force carrier pricing upward. Simultaneously, customers will tire of subsidizing peak users, pressuring prices downward. A pay-per-use model can address both issues.