Communications: Is price all that matters?

Larry Borsato — Tue, 11 Mar 2008 08:41:03 -0700

I recently posed a question in the Industry Standard, asking why we don't demand higher reliability in the communications services that are so central to our personal and work lives.

Heavy response on Slashdot and Paul Mah's TechRepublic blog showed that quite a few people agreed with my observations about mobile phone service, Internet access, and satellite and cable television.

However, many more disagreed. Among the dissenters, there were a couple of common themes. Some thought that achieving 99.999% reliability is practically impossible, although others pointed out it is technically achievable, using redundancy and other techniques. One person remarked that we accept much lower quality standards in software engineering than we ever would for other engineering disciplines, such as bridge design and construction.

Many felt that 99.999% reliability is unnecessary for communications services. They reasoned that as long as products and services work most of the time, then that's good enough. Indeed, these services do work quite well. There is a slight chance that my mobile network will fail when I need to call 911 to report an emergency, but the probability is extremely low.

But one of the most interesting themes that arose in the reactions was the view that people are unwilling to pay more for extra reliability. Services may be merely acceptable, but we have grown so accustomed to paying low prices for them that we don't see a need to pay more to guarantee certain levels of uptime. Slashdot commenter NevermindPhreak put it best:

"... The market isn't 'conditioned' into thinking that anything less than five 9s is acceptable. They just don't want to pay the cost associated with it. The price/reliability ratio right now is the one that will satisfy the most customers. 99.999% reliability is harder to sell than 99.9% reliability at half the cost ..."

I can't speak for everyone, but I pay a fair bit more for my mobile service than I ever did for my home landline. In other words, I seem to be paying more for less reliability.

Have we collectively decided that price is all that matters? As long as the service is cheap, reliability is not a great concern? I assume that back in the early days of telephone service, the public was just as focused on getting a cheap price. But someone must have realized that such an important communications tool must work well, and this was eventually achieved by regulating phone service. For new services, I don't want to create excess regulations, but shouldn't we have at least some form of consumer protection to ensure that customers receive a reasonable and guaranteed level of service, even if it's not 99.999% uptime?

Consider Internet reliability. If your ISP throttles traffic, then you are probably paying for promised bandwidth that you aren't getting, because your favorite application happens to be the one being downgraded. The FCC clearly sees this as a problem. I don't know about you, but I want a guarantee that my ISP will not arbitrarily block or otherwise limit the Internet bandwidth I'm paying for.

As a society, we've become accustomed to low prices, but these services don't come for free. As consumers, we should demand guaranteed levels of service. If we don't, service providers won't have an incentive to increase reliability in order to meet market demand. Moreover, no company is going to be motivated to provide better service if the competition isn't -- assuming that there is competition where we live and work. We'll just have to depend on the kindness of strangers -- the anonymous executives at profit-driven service providers -- and hope that the services we use will be there for us when we need them.

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Note: Anonymous comments on The Industry Standard are disabled. To leave a comment and participate in the Standard's prediction market, please register first.

Communications: Is price all that matters?

Larry Borsato — Tue, 11 Mar 2008 08:41:03 -0700

I recently posed a question in the Industry Standard, asking why we don't demand higher reliability in the communications services that are so central to our personal and work lives.

Heavy response on Slashdot and Paul Mah's TechRepublic blog showed that quite a few people agreed with my observations about mobile phone service, Internet access, and satellite and cable television.

"... The market isn't 'conditioned' into thinking that anything less than five 9s is acceptable. They just don't want to pay the cost associated with it. The price/reliability ratio right now is the one that will satisfy the most customers. 99.999% reliability is harder to sell than 99.9% reliability at half the cost ..."

I can't speak for everyone, but I pay a fair bit more for my mobile service than I ever did for my home landline. In other words, I seem to be paying more for less reliability.

Related news, commentary, and predictions:

Prediction: AT&T will win the C-block spectrum auction
Larry Borsato: The wisdom of clouds
Larry Borsato: Communications: Why do we accept less than 99.999%?
Larry Borsato: ISPs, the music industry, and the Web
Larry Borsato: If you want a job, we don't want you
News: Sprint said to be planning layoffs
News: Sprint to open its XOHM WiMAX, still faces hurdles
News: T-Mobile, AT&T join Verizon on unlimited plans

Note: Anonymous comments on The Industry Standard are disabled. To leave a comment and participate in the Standard's prediction market, please register first.

Communications: Is price all that matters?

Larry Borsato — Tue, 11 Mar 2008 08:41:03 -0700

I recently posed a question in the Industry Standard, asking why we don't demand higher reliability in the communications services that are so central to our personal and work lives.

Heavy response on Slashdot and Paul Mah's TechRepublic blog showed that quite a few people agreed with my observations about mobile phone service, Internet access, and satellite and cable television.

"... The market isn't 'conditioned' into thinking that anything less than five 9s is acceptable. They just don't want to pay the cost associated with it. The price/reliability ratio right now is the one that will satisfy the most customers. 99.999% reliability is harder to sell than 99.9% reliability at half the cost ..."

I can't speak for everyone, but I pay a fair bit more for my mobile service than I ever did for my home landline. In other words, I seem to be paying more for less reliability.

Related news, commentary, and predictions:

Prediction: AT&T will win the C-block spectrum auction
Larry Borsato: The wisdom of clouds
Larry Borsato: Communications: Why do we accept less than 99.999%?
Larry Borsato: ISPs, the music industry, and the Web
Larry Borsato: If you want a job, we don't want you
News: Sprint said to be planning layoffs
News: Sprint to open its XOHM WiMAX, still faces hurdles
News: T-Mobile, AT&T join Verizon on unlimited plans

Note: Anonymous comments on The Industry Standard are disabled. To leave a comment and participate in the Standard's prediction market, please register first.