• United States

The time has come for equal prices for equal services

Jan 19, 20063 mins
NetworkingTechnology IndustryWAN

* Why pay more for the same service just because you're a business?

Over the years, the phone companies have had two basic types of services – business and residential. For plain old telephone service (POTS), the difference was always pretty straightforward. If the service is listed under a business name, like “Distributed Networking Associates” in Steve’s case, you had a business line and you paid the business rate. If you had just your own name listed, then you paid the residential rate.

The services were identical, but the price wasn’t. For instance, in North Carolina, the price for a residential “Complete Choice” line is advertised as $30 per month, plus all of the usual taxes, surcharges, and fees. For a business line, the price for the exact same service is $56 per month. (By the way, don’t expect the latter price to be nearly so easy to find as the residential price.) Both services provide a phone number and dial tone.

The case is quite similar for DSL services. The most basic form of “FastAccess” DSL (256Kbps download) has a price of $24.95 per month for “residential” customers, while essentially the same service costs $49.95 per month for “businesses.” For the fastest (6Mbps download) version DSL, the residential price is $46.95 per month, while the business version is $109.95. As with POTS, the features are for the most part comparable, although business customer do get enhanced technical support (if needed) and repair service (if needed).

While we could argue endlessly (and we expect to hear from you on this) about whether this is “fair” for businesses – especially small businesses – to have to pay at least twice as much for essentially the same service as residential services, the simple fact is that there are many cases where the definition of “business” and “residential” no longer apply. In fact, in a quick search of BellSouth’s Web site, we could not find a definition of the criteria for “business” vs. “residential” services.

So is a telecommuter supposed to pay a business or residential rate? What about a person who accesses corporate e-mail during the evening, but the kids surf endlessly throughout the day? How does one define “business use” of a service? More than 50% business? Or 80% vs. 20% in either direction – business or residential? And is this measured in minutes, megabytes, or by some other metric? Our guess is that there are approximately 0% of the cases where there is a DSL (or phone) line installed in a residence where there is no mixture of business and residential use.

Clearly, this is an artificial distinction, and the time has come for equal prices for equal services. If a business wants enhanced services, fine. Price the additional options – like a fixed IP address – a la carte. But let’s make all services “busidential.”

Jim has a broad background in the IT industry. This includes serving as a software engineer, an engineering manager for high-speed data services for a major network service provider, a product manager for network hardware, a network manager at two Fortune 500 companies, and the principal of a consulting organization. In addition, Jim has created software tools for designing customer networks for a major network service provider and directed and performed market research at a major industry analyst firm. Jim’s current interests include both cloud networking and application and service delivery. Jim has a Ph.D. in Mathematics from Boston University.

More from this author