Article ID | Journal | Published Year | Pages | File Type |
---|---|---|---|---|
556478 | Telecommunications Policy | 2014 | 11 Pages |
Abstract
We analyze subscriber usage data from an Internet Service Provider that sells service using three-part tariff and unlimited plans. Subscribers facing three-part tariffs have lower average usage than subscribers on unlimited plans, and differences among heavy users explain nearly all the overall difference. Hence, the three-part tariff saves network costs and narrows the gap, between light and heavy users, in price per Gigabyte used. However, subscribers facing three-part tariffs cut usage similarly during peak and off-peak hours. Since off-peak usage adds no network costs, these off-peak usage reductions lower welfare. Differentially pricing peak usage could further enhance efficiency.
Related Topics
Physical Sciences and Engineering
Computer Science
Information Systems
Authors
Jacob B. Malone, John L. Turner, Jonathan W. Williams,