Thursday, April 23, 2015

Project Fi: Back to the Future

Google’s Project Fi contains a amount of irony. Though talk and text are flat rated (all you can eat), Internet usage is metered.

Think about that: consumer advocates always argue that people want and need unlimited usage, and it is only the “greedy” Internet service providers that want to match consumption with end user payments.

But Project Fi actually positions consumption-related pricing as a consumer good.

Beyond that, metered pricing, consumption pricing or per-bit pricing--take your pick--actually is a throwback to the earliest days of consumer Internet access. That was the way America Online, the first mass market dial-up ISP, priced Internet access.

People did not like it, and usage surged once AOL moved to unlimited pricing. Now Project Fi moves back to that older model.

Pricing is linear, and based on consumption.

That’s ironic. Linear pricing--metered usage--is the traditional way service providers generally have sold their products. Unlimited use was the innovation.

Now Project Fi insists that strictly metered consumption is, in fact, quite pro-consumer, compared to buckets of use that almost always feature breakage (consumers pay for what they do not use) or “overage” charges when they exceed their allotments.

Consumer advocates generally have argued such plans are not consumer friendly, but also have opposed metered usage as well.

Perhaps Google is trying to spur mobile ISPs to invest more in infrastructure (more than they seem already to be doing) by creating new incentives for supplying capacity. Ironically, ISPs have preferred metered pricing all along.

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