Shirky on nutty pay-as-you-go Wi-Fi economics

Clay Shirky sez:

More proof, as if any were needed, that the economics of Wifi are interfering with plans to offer metered commercial access. I have a T-Mobile Wifi account, 300 mins for $50, so that when I'm away from free APs, I can at least drop into a Starbucks, order up a doppio, and check my mail.


Today, T-Mobile informed me when I logged in that that deal was over, dead, forget it, they're sorry they ever mentioned it. Instead, they were offering me a "convenient" Day-Pass, for the low, low rate of $10/24 hour period. Meaning, of course, that even if you spend even as much as an hour logged in at a Starbucks, the cost per minute has still almost tripled, to 16 cents a minute from 6. Worse, if you just want to go in, grab a cup of coffee and check your mail under the old "10 minute minimum" regime, that will now cost *a dollar a minute.* I could have elective surgery for a dollar a minute.

This is Iridium or those back-of-the-seat airphones all over again. Any pricing plan that is even moderately convenient shows up on the spreadsheets at HQ as being less than a rocket ride to riches, so they come up with the two-fisted brainstorm of raising the price, then slapping a "Now with new inconvenience!" sticker on it. I smell a business school case study in the making — don't take products with vanishingly small marginal cost and make them too expensive for your target audience to want to use.

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