Quote:
Originally Posted by photon
Well sure, coming up with schemes where people pay less is easy. But that is counter to what a company wants to do; charge as much as they can for the largest # of customers. That is to say maximize profits.
Of course it's always a balance; charge too much and people leave, charge not enough and you leave money on the table.
But how much they charge and the levels provided are very much based on psychology and market, not on actual usage, because people shop based on perceived value and emotion. That's why I doubt they'll ever switch to a low base rate + $x usage model unless forced to.
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And analysis like this is fine when you you have true competition, but in this arena it is an oligopoly. What happens when there are only a few real options?
One company bites the bullet, the others follow suit, and the consumers have no real alternative other than cancelling the service.
I don't believe internet access is a luxury like it once was, when I had to pay $30 a month for a 14.4 modem connection. In today's knowledge based world more people need to be connected.
And that means if we do want a chance at a competitive environment, either let other international big players attempt to enter the market (which are currently prevented by Canadian law) or force the companies in control of the backbone to resell access to the backbone at a fair cost, which Bell revealed they don't want to do.