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0 pointsbarrkel15y ago0 comments

Explicit pricing is better for moderate users and worse for heavy users. "Unlimited" effectively subsidizes heavy users by overcharging moderate users. As a heavy user, I'm a fan of "unlimited".

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3 comments · 1 top-level

bm9815y ago· 2 in thread

It depends. When "Unlimited" service is sold with a Terms of Service that includes an "Excessive Use Policy" like Mozy's [1], the heavy user is operating in an ambiguous zone where continued use of the service at the advertised price is at the whim of the provider.

We've seen this with unlimited data plans with the cable ISPs; they're not really unlimited.

To me, it's similar to having a traditional credit card versus one with no pre-set spending limit. Which would you rather have? The latter has a limit, you just don't know what it is until you hit it.

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[1] http://mozy.com/terms/ "....excessive use of the Service, which means usage over a given period far exceeds the average level of usage by users of the Service generally..."

cosmicray15y ago

> the heavy user is operating in an ambiguous zone where continued use of the service at the advertised price is at the whim of the provider

That suggests an interesting business model where: we sell everyone on 'Unlimited', then we wait to see who is the most egregious customer, and drop off the ones on the top of the pyramid (and keep the revenue positive customers).

Reminds me of how the cellular operators used to be towards roaming: sure, you can roam, just don't do it so much that we cancel your contract.

barrkelOP15y ago

That's a separate issue - discounting the value of the service based on uncertainty over its continuance. But even within the limits of the unstated limit ("excessive use"), the heavier users are still subsidized by the light users.

You can still freeload up and until you hit the limit.

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