Why isn't flat-rate flat?

Da Man

As ever I don't really have a clue, but my assumption was that these "flat-rate" packages essentially work like ADSL where there's a modem bank in the exchange so no trunk calls are used to carry the internet traffic. If this is so, why is there a time limit on the product? Time's got nothing to do with anything. If there was a download cap that might make some sense.

Nuphor

TBH, I'm kinda half suprised there's been so few threads relating to the fact flat-rate here isn't true flat rate. It's more akin to prepay.

Muck, dahamsta, sceptre, Dustaz, enlighten us please.

dahamsta

It's a lost battler Nuphor. And I really shouldn't be up at this time of the morning. Maybe when I'm awake...

adam

nahdoic

There isn't much talk about it, because it was discussed to the death about 6 months ago. Basically 30 "Modems" in an exchange (known as a port) cost 15K a year to rent from Eircom - that's pretty good value, but the killer which makes having a dedicated port impossible are the backhaul charges.

http://www.boards.ie/vbulletin/showthread.php?s=&threadid=87118

http://www.boards.ie/vbulletin/showthread.php?s=&postid=983046#post983046

Originally posted by Scott Taunton
I thought it best to post a response to some of the angst which exists towards our new products by some of the Boards members.

While still clearly unhappy, we sent a PM a couple of hours back to Mechanima letting him know that, given his circumstances, we would not hold him to a three month min term. We don't want to "lock" anyone into dealing with us, we're trying to develop products which cater for the vast majority of users while recognising the need to operate within a commercial environment.

I spent a number of hours this morning attempting to model a service for heavy users. Believe me when I say that we really do want to be able to do it. The fact is though, with the FRIACO service as it stands, it just doesn't stack up.

I know a lot of you were displeased with my earlier interaction during which I sought the views of people regarding limits on the service and during which one option raised was a limit of 250-300 hours. The truth is that it just doesn't stack up commercially. For the vast bulk of users, 180 hours offered them all the access they needed. Lifting the average usage by around 20 hours has the impact of raising the cost base for ALL customers by around €8 per month.

When lauching UTVip XL we were careful to point out that the service would provide "at least" 180 hours of access. We are hopeful that the usage patterns seen by us in NI and those of Freeserve et al in the UK will be reflecting in Ireland. That being the case, we hope to be able to extend such limits for the benefit of our customers.

If I may (because it seemed to help with Broadband), I'd like to break down the cost of delivering FRIACO on a wholesale basis so as to give you some additional background:

FRIACO ports (30 64k channels) need to be orders in whole. If you have 30 customers in a given exchange area, you'll end up with a 1:1 contention ratio. Most ISPs will model on 4:1 or 5:1 during peak times. At 4:1, we need a port for every 120 customers. Assuming 90% utilisation of the ports, at with Eircom's wholesale price of €14779 pa and at 4:1, this represents €11.40 per customer per month.

The much higher cost element is the backhaul of these ports to our NOC in Dublin which (post various Eircom setup charges) is charged on a per km basis. These charges are approx €300 pa per km for the first 30km and €90 pa per km thereafter.

The average distance of the 48 exchanges from our Dublin NOC is 100km, including the Dublin exchanges. So this averages out at around €17,000 per port pa, or just over €13.00 per customer pm.

So far we're at €24.40 (or €29.50 including VAT) based on a 4:1 service. 4:1, if spread evenly between customers is 180 hours per month. Of course it isn't spread evenly and in fact is much heavier at the peak times of 10am, 4pm and 9pm.

We do have admin, bandwidth, billing, bad debt, and marketing to add in there somewhere as well. This will account for, say €5 per customer per month and then there's the theory of a margin.

Furthermore, to add to the service quality, if a user dials our service and gets an engaged tone from the FRIACO ports, we will redial using a standard PSTN number at UTV's expense.

If we were to offer a 300 hour product, these costs would, at least, double. For us, it's just not financially sustainable.

All in all, you can see that it's not as straightforward as some pundits suggest. I'm not complaining, I'm just pointing out that we have done everything in our power to offer the most competitive product in the marketplace but realise that for some of you it isn't ideal. That's the great thing about competition from an end user's viewpoint.

We're not sitting in a shroud of silence, more racking our brains, spreadsheets and commercial knowledge to find a way of meeting everyone's needs. Unfortunately compromise, in this instance, means that we may lose some business from some existing customers, while gaining business elsewhere.

The one thing that you can be assured of is that we will constantly seek to improve our products from technical, support and pricing perspectives in order to keep your custom, win it, or win it back.

Boards has been a very useful platform for us to interact and improve our services. That's not about to change. The fact that some of you need a 300+ hour dialup internet service is one that, under the current commercial and regulatory environment, we can't find a solution....yet.

Kind regards

Scott Taunton
Managing Director
UTV Internet

SkepticOne

There is a price to be paid for 'unlimited' services.

http://www.ridhughz.demon.co.uk/freeserve/

seamus

At the risk of going against the grain......

There are a few issues with FRIACO imo.

The main one is that some users would like to leave their connection on 24/7, constantly downloading files and doing 'stuff', while other users may only log on for 5-6 hours per day, effectively at the machine using the net for the entire time.

To me, users in group A should not be on dialup. Effectively, they're server users or always-on users, for which, using dial-up is ridiculous. I accept that some have no choice. IMO, should a user express interest in an always-on connection, the incumbent should be obliged to provide the ISP with a service that is a) Always-on, and b) reasonably priced. So for example, if someone requests DSL and there is no way in hell they could ever get it at that address, the telco should be obliged to provide the ISP with a means of connecting that user permanently. In this case, maybe 24/7 FRIACO, at a price close to, but obviously less than a DSL connection.

There would also be some obligations on the customer side. Say for example, he gets 24/7 FRIACO because DSL is not available at his exchange. When DSL does become available, the customer is obliged to upgrade, at normal cost.

Obviously, the method of connection is the telco's choice. If providing the user with a wireless connection with a competitor turns out cheaper than providing 24/7 FRIACO, they are free to use it.

I haven't fully thought it through, but it sounds reasonable to me

Da Man

Surely the Eircom competitors don't lease lines from every exchange in the country back to Dublin for the back-haul? Aren't there companies like ESB and Iarnrod Eireann that provide cheaper backbones across the country? But regardless, that still has no bearing on connection time.

If those numbers given by the UTV guy are correct, then if I get the math right a port costs €41.05 + VAT a month to rent. Ffs, that's basically retail ADSL cost. That's highway robbery, even by Eircom standards.

seamus

Originally posted by Da Man
If those numbers given by the UTV guy are correct, then if I get the math right a port costs €41.05 + VAT a month to rent. Ffs, that's basically retail ADSL cost. That's highway robbery, even by Eircom standards.

Yep. Which is why they're not pure FRIACO. Even eircom.net has a 12-hour cut-off in any 24 hrs, so even at full blast, every port services at least 2 customers per day, and they make a profit on the price paid by each customer.

If a FRIACO port cost even €25 per customer, an ISP could charge €35 per user for 24/7 access without getting screwed for it.

BoneCollector

Why isn't flat-rate flat?

For exactly the same reason than "no cap" does not mean unlimited.
(there no such thing as a free lunch)

DMT

With flat-rate, the rate is flat (ie how much you pay) not the amount of time you get online.

sceptre

Originally posted by DMT
With flat-rate, the rate is flat (ie how much you pay) not the amount of time you get online.

Not if they charge you per minute if you exceed your allowance though.

DMT

Originally posted by sceptre
Not if they charge you per minute if you exceed your allowance though.

Good point....

Ripwave

Originally posted by sceptre
Not if they charge you per minute if you exceed your allowance though.

FFS. It costs a set amount (flat rate) for 180 hours. If you go over 180 hours, your account stops working until next month.

Go back and read the threads where this was all discussed months ago, and stop wasting everyones time.

seamus

Originally posted by Ripwave
FFS. It costs a set amount (flat rate) for 180 hours. If you go over 180 hours, your account stops working until next month.

Go back and read the threads where this was all discussed months ago, and stop wasting everyones time.

Well........none of the ISPs actually stop the account from working. When you get authenticated, the server checks to see if you're over you allocation. If you are, you get transferred to a 1892 port, and charged at local rates. So while, technically, you are being charged a flat rate, the fact that they authenticate your account before moving you to a 1892 port means that it's not flat-rate, it's a discount rate, until the 180 hours have exceeded.

Dialing a flat-rate number would imply that you pay a single fee and that fee applies every time you dial that number. Clearly it's not, since you coldl dial your 1893 number, and be charged a different rate, once over your allocation.

(Pedantic)

sceptre

Originally posted by Ripwave
If you go over 180 hours, your account stops working until next month.

Wrong. It should work that way but it doesn't. I'd hate to think that anyone would actually think so - if they do think so and they're not keeping an eye on the clock they'll get a nasty shock come bill time.

That's why I put the charges for going over the allocation in the sticky at the top of the page. All verified with the ISP webpages and with the ISP's CS.

Go back and read the threads where this was all discussed months ago, and stop wasting everyones time.

Little narky aren't we? I've read every thread for the past few years. Not that that should matter (see above)

oscarBravo

Originally posted by sceptre
Wrong. It should work that way but it doesn't.

Yikes! I'm glad it doesn't!

What would be ideal would be if each user could choose a strategy: be charged after the allotted hours, or be suspended until next month. Those on a strict budget could choose the latter; those who need 'net access all month the former.

Not really going to happen tho; and I suspect that those who use up their 180 hour allocation are (slightly) more likely to want to keep their access.

Da Man

Does UTV allow you to check used hours on their web site or whatever?

BoneCollector

Well........none of the ISPs actually stop the account from working

No they don’t
But the package you pay for is the package you get.
You pay for 180 hrs a flat rate which when you exceed this you have to wait for the next billing period before you can have another 180 hrs

The only problem with flat rate is...
People’s perception or expectations of what they would like it to be, verses what is on offer.

Maybe we should get rid of the term "flat rate" since some people just take this term and interpretate it to the extreme.

its a "limited bandwidth/time package" for access 24/7
It’s a cap! After which you pay a premium rate to continue using it beyond the limits of the packaged deal.
All isps have limits which is dictated to them by the package they buy from who ever is providing the bandwidth..
They are given limits so why shouldn’t you?

sceptre

Originally posted by BoneCollector
Maybe we should get rid of the term "flat rate"

Perhaps. That's why we've entitled the sticky "Partly Unmetered 56k/ISDN options...". At least there's no confusion there, even if it lacks a little je ne sais quoi for the marketing drones.