
Why Your Cell-Phone Bill Should Be Going Down But Isn't - nkurz
http://readwrite.com/2014/05/09/4g-3g-smartphone-data-price-difference
======
guelo
Prices _are_ coming down because the government prevented the ATT-Tmobile
merger and Tmobile decided to start competing on price. Thank goodness for a
little government regulation and that created competition.

~~~
jwallaceparker
Government regulation doesn't create competition.

Edit: It's remarkable that any statement regarding regulation that isn't
overtly Marxist immediately gets half a dozen down votes on HN.

~~~
seizethecheese
That is the definition of antitrust regulation.

~~~
jwallaceparker
Can you name one monopoly that exists anywhere that is not the creation of a
government in the first place?

Do some digging into the history of antitrust legislation. The Sherman
Antitrust legislation was an act of mercantilism designed to protect
incompetent businesses who were losing market share to superior competition,
most notably Standard Oil, the poster boy monopoly which gained an 85 percent
market share through lower prices and economies of scale, delivering a benefit
to consumers but harming their comparably inefficient competitors. It was
those same competitors who spearheaded the antitrust legislation, not the poor
consumers 'suffering' from lower prices and superior service at the hands of
the 'monopolistic' Standard Oil.

~~~
jerf
"Can you name one monopoly that exists anywhere that is not the creation of a
government in the first place?"

Microsoft.

I'm a libertarian, but one of the reasons I can't even consider being an
anarchist is that I consider anti-trust regulation to be a good and proper
function of a government. I'd break up a lot more, personally. It's one thing
that I find the otherwise-excitable class warriors to be bizarrely reticent to
do.

I'd also observe that antitrust regulations do not forbid monopolies... they
forbid the _abuse_ of monopolies, according to a certain definition of abuse.
Microsoft was not punished for having a dominant desktop OS, they were
punished for using that dominance to engage in shenanigans to try to
"abusively" (in accordance with the legal definition) extend that dominance
into a another sphere. Of course that is the theory, and what happens in the
courtroom in fact may be arbitrarily related to the theory, but that _is_ the
theory.

~~~
badsock
I certainly suffered under that monopoly (as did the entire industry) but
couldn't the argument be made that market forces took care of it without
government intervention?

I'm aware that there was an anti-trust judgement against them, but as far as I
can tell it didn't deter them in any significant way.

It seems to me that they simply collapsed under their own hubris and the
blowback from their decades of abusive practices, and as soon as they weakened
the competition ate their lunch.

~~~
jerf
"I certainly suffered under that monopoly (as did the entire industry) but
couldn't the argument be made that market forces took care of it without
government intervention?"

YMMV vary, but my conclusion is this: The government successfully prevented
Microsoft from crushing the rest of the browsers. They really were trying,
really did damage Netscape, and really were well on their way to _more_
dominance in that field than they had a "right" too. And they were on their
way, too; Netscape was faltering and IE was a better browser for a good long
time. As it is they still had enough dominance to end up causing web tech to
stagnate badly for a few years.

However, recall why Microsoft was so scared of the browser, which is that it
threatened to become its own OS and make it so you could run a computer
without Windows that could do everything you needed. _Broadly speaking_ (bear
with me here), this still has not happened. Here in 2014, you could run a
small business out of a browser, and you can do a lot with a Chromebook, but
Windows is still around, still powerful, and still pretty full of legacy
software that doesn't exist in a browser and businesses are not having an easy
time disposing of... witness the continuing lurching life of Windows XP, which
Microsoft _wants_ to be rid of and can't be.

I think it was a good decision and still correct, even if ultimately it really
only served as a very large shot across Microsoft's bow (even if it was aimed
at the hull) due to the fact that the browsers of the time weren't going to be
able to manifest the promise of displacing Windows. We'll never know, but the
secondary effects of chastising Microsoft may have been worth more than the
primary effects ever could be. And I do think the secondary effects were more
important; the direct impact pales in comparison to the fact that they'd just
been notified they couldn't proceed down that path any farther than they'd
already gone without the costs exceeding the benefits.

Of course, what truly displaced Microsoft turned out to be more Apple, via the
MacOSX and mobile, which Microsoft continues to struggle with. But so may
years ago, who'da thunk it? And it would have been silly for the government to
count on that.

~~~
ams6110
Not the way I remember it. Netscape owned the browser market. Microsoft didn't
even have a dog in the fight (remember they were "blindsided" by the
internet). You signed up for internet access with Earthlink or Juno or some
other company like that and they sent you a CD with a free copy of Netscape.

Microsoft licensed the Mosaic browser from Spyglass and that became IE. As you
pointed out, they developed IE until it was a better browser. The Netscape
stagnation happened when they had a long delay in releases due to their
undertaking a "thing you should never do [1]," a from-scratch rewrite. Around
that time the 2000/2001 dot-com collapse happened which certainly didn't help,
but Microsoft didn't cause any of that.

Fast-forward a decade, and now Microsoft is stagnant. Apple developed WebKit
and Safari, and Google came along with Chrome, a better browser. By the time
Microsoft worked its way through IE 6-7-8 to a browser that was actually
competitive again, they had lost a lot of their browser share. Apple, with
Safari, and Firefox, rising from the ashes of Netscape, also offered
compelling alternatives.

"Who'da thunk it." Well I'm not sure. I don't see any evidence that the
government has any better thinkers than the companies in the tech sector
though.

1:
[http://www.joelonsoftware.com/articles/fog0000000069.html](http://www.joelonsoftware.com/articles/fog0000000069.html)

~~~
jerf
IE 4 was a better browser than Netscape. I think we may finally be distant
enough that we can drop our allegiances and just admit that. Netscape did not
randomly decide to drop everything and rewrite a browser, they did it because
they were trapped in a terrible, terrible code base that could not easily be
extended to grow into the future. Netscape "layers", their answer to what we
at the time called DHTML and today don't even have a name for it because it's
just how the web _works_ , were atrocious, and it was directly a result of
their code base not being able to do anything else.

Netscape was boned either way... not doing a from-scratch rewrite would still
have doomed them to being stuck behind Microsoft for a long time. It would
have allowed them to keep making releases instead of just going silent, but
they still would not have been able to be as good as IE. And they'd have still
be stuck hard by the fact that Microsoft monopoly'd the price of a browser
down to 0... and Microsoft would probably have monolopy'd the price of a
server down to 0 too even faster than it did, given the chance.

Microsoft was "stagnant" because they _could_ be stagnant because they had
_won_. The judgment at least prevented them from pushing home the advantage,
because they knew they'd be slapped down. This is what I'm saying was probably
the most important thing about it, and it's easy not to see what "didn't
happen", but I suspect that Microsoft would have done yet more "evil". Perhaps
it would have gone poorly, but it would have been foolishness for anybody to
count on that. (What we know _now_ about Microsoft and Ballmer's leadership
makes that a safer bet, probably, but we didn't know that at the time!)

I think people look back at the world in which Microsoft was slapped, and see
a world where bad things didn't happen, and don't realize that, due to second-
order effects, there's probably more relationship between those two things
than they realize, even if obvious first-order effects are missing (like, Bill
Gates never rent his clothes in twain on national TV going "Woe are us, for we
are injunction'ed!"). In the end Microsoft's dominance would have been cracked
sooner or later, sure, but in the long run we're all dead; no policies can be
written based on that theory.

------
zobzu
carriers dont deliver "10mbits" which becomes "15mbits" with LTE.

LTE, GSM, etc. use "radio bandwidth". Thats waves in the air if you will. The
faster the wave oscillate, the higher the frequency and the shorter the range
at which it will keep oscillating.

Radio bandwidth is a finite element and thus frequency ranges are assigned to
operators, to wifi, to your microwave (yes it emits on 2.4ghz and interfere
with wifi in fact), to your TV, to handled radios, to your drone remote
control, etc.

To give an example, an HSDPA channel is 5mhz. In these 5mhz you may be able to
send up to X mbits depending on how the signal is encoded (how the signal is
encoded is actually what provides the spectral efficiency).

Recent advances, in particular OFDM allowed us to transmit more data for the
same radio bandwidth (aka frequency range). Variants of OFDM are used for
xDSL, Wifi (not all standards) and LTE (and many other things, including that
HD video feed from sport cars or the ISS).

So, since the milkshake's straw does not and CANNOT change size (again: radio
bandwidth - spectrum - frequency range) are we are bound to the laws of
physic. We're more efficient in the way we organize the data (and mainly, how
we're not losing the data - thats the main advantage of OFDM - if you're
interested in how it exactly works, wikipedia)

I really despise articles with sensationalistic headlines, that attempt to
carry a point through misleading or even incorrect statements - even if often
the result of genuine ignorance.

Also, i'm in the USA and I pay 30/mo for 5GB LTE, unlimited DC-HSDPA,
unlimited text, 100m calls. It's not great (calls should be unlimited) but
thats a good enough deal. If you're paying more you should consider dropping
verizon/att - not blaming milkshakes.

~~~
rayiner
I pay $70/month for TMobile with unlimited LTE. My coverage isn't as good as
ATT while traveling, but its fine where I live. Is this a sign of "gouging?"
That it costs more for a service with good coverage in the less populated
parts of the sprawling US?

Why are 4G prices higher in US? Demand is higher. Supply is more costly to
build. Econ 101.

~~~
altcognito
> That it costs more for a service with good coverage in the less populated
> parts of the sprawling US?

Did you read the part of the article where they compare to Canada which is
paying less than us for more bandwidth? Compare population density there with
here.

It's not as simple as supply and demand either. If your infrastructure is
being utilized heavily (efficiently), therefore delivering your more customers
for the same equipment compared to another region, then you come out way
ahead.

------
stephengillie
I've gone without phone or data service on my cell for a couple years, getting
by entirely on Wi-Fi, and using Google Voice for the handful of occasions when
I needed to call someone.

When I signed back up, I was happy to get unlimited data again, for less money
than I'd been paying a few years ago. Back then, it was extra for a data plan,
and extra for a "smartphone" data plan -- making my bill over $100. Now, I'm
paying less than I was after corporate discounts were applied to my old plan.

And mobile data, even just 3G, is _fast_. And often I'm upshifted to HSPA or
4G, which is faster than the Wi-Fi in some bars. Plus apps and websites are
built to use less data than a couple years ago, using AJAX and other methods
to cache and reuse more data on the device, such as UI elements and layout.
The app is just the mobile browser page, and that is a client that calls an
API, minimizing repeated network calls.

------
gourneau
ProTip: I just called AT&T today and asked when my contact ended, because I
was considering going to T-Mobile. A few minutes later they offered me the
approximately the service for half the cost.

~~~
justinsb
Indeed. Prices _have_ come way down, but the carriers are engaging in price
discrimination (quite rationally). You don't get the new prices automatically,
you have to switch carriers/plans or persuade your current carrier that you
are going to do so.

~~~
pyre
On the other hand, such price discrimination reminds me of things like this:

[http://blogs.computerworld.com/node/3538](http://blogs.computerworld.com/node/3538)

~~~
justinsb
I'm certainly not saying discriminatory pricing is entirely fair :-) But the
article's premise is that costs haven't come down, and that simply isn't true.
(Admittedly the reasons likely have more to do with T-Mobile's strategy than
technological shifts.)

------
zw123456
The difference between wireless technology and computing technology is that
wireless communication is limited by Shannon's Law which basically says that C
~= 1.44 * B _(S /I_N) where C is the information rate (i.e. bps) B is the
spectral width (how much RF spectrum is being used to modulate the signal
onto, and S/I*N is the signal to interference and noise ratio. Right now, LTE
is very close to the Shannon limit, there is no Moore's law we are all
familiar with. Most carriers face a choice of either obtaining more spectrum
(which is limited resource and expensive) or increasing the SINR which is very
expensive to do since it involves building more cell sites, if the tower is
closer to the user the SINR goes up. I think often times the cost of
maintaining the infrastructure around supporting tens of thousands of cell
sites is under estimated. Yes the wireless companies are profitable, but no
where near the kinds of profits the phone manufacturers are reaping where it
costs them $50 to make a phone and charge the cell companies $500 for the
phone, that huge mark up is passed along to the customer as part of their
monthly bill because everyone expects their phone to be "free". It is no free,
the cost is embedded in your monthly bill. The best way to drive down wireless
costs in my view are to assert competitive pressures on the phone
manufacturers.

------
trollied
The blogger is full of crap. 3G base stations don't automatically upgrade
themselves to 4G. It costs a fortune to upgrade each tower. The backhaul also
has to be upgraded to cope with the extra bandwidth that the tower can cope
with due to the increased spectrum efficiency (more data in the same frequency
space due to SCIENCE!).

~~~
johnny5
Can you expand on why it costs so much to upgrade a basestation? the fiber is
already rolled out, the contracts between land owners have already been
signed, the surveys for radio propagation have already been done. I honestly
don't think the upgrade from 3g to LTE was nearly as expensive as the upgrade
from EDGE/2g networks to 3g was for carriers. Also it was much, much quicker
for them to roll out LTE networks vs 3g networks.

------
pgwhalen
I'd love to be a cynic, but my family's AT&T bill went down when we got on
their new family plan back in February. And now we have way more data than we
can use. I can only assume it was due to competition in the market in family
plans.

------
harryh
My AT&T bill dropped by 25% just a few months ago.

------
pfisch
This article seems like it was written by someone who has little if any
knowledge about cellular tech.

~~~
dang
This would be a better comment if, instead of just putting down the author,
you taught us some of the relevant things you know.

------
hansy
Completely irrelevant but I can't help myself given the milkshake example
provided in the article.

Milkshake scene from the movie "There Will be Blood":
[http://youtu.be/s_hFTR6qyEo?t=1m20s](http://youtu.be/s_hFTR6qyEo?t=1m20s)

------
rtpg
Actually in Japan 4G plans _are_ cheaper, presumably because the 3G networks
are so oversubscribed that carriers are trying to get people to swap (and buy
new phones in the process).

------
jzs
You really need competition on your networks. In Denmark the carriers are
forced to rent out their networks to competitors so that we don't get a
monopoly.

Currently i pay ~37$ for unlimited speech, unlimited sms/mms and 10gb data a
month. Oh yea and no roaming charges in sweden, italy, UK, ireland, hongkong
and austria. The list of countries might grow since the european union is
considering removing roaming charges completely within EU.

------
bberrry
Meanwhile, in "socialist hell-hole" Sweden, I have an unlimited calls, texts
and 4G data plan with these speeds
[http://i.imgur.com/62yT2ig.png](http://i.imgur.com/62yT2ig.png) (45Mbit down,
7.5Mbit up)

It costs me ~$48 per month. I average around 10-12gb per month, but don't have
to worry about any charges when tethering my laptop to the 4G.

~~~
tim333
And for what it's worth in even more socialist hell hole Vietnam I got a
prepaid SIM with voice and 2GB of data for about US$9. Only 3G sadly enough
but fast enough.

------
Aloha
There are two first would countries in the world comparable to the United
States, and one of them is only an almost.

Australia - Widely dispersed population, universal coverage hard to build out,
environmental factors. Unlimited Voice/SMS/MMS 2.5gig data allotment - 121.73
USD (Telstra)

Canada - Population in a small band near the border but many rural areas must
be covered by mandate, universal coverage expensive to build out,
environmental factors. Unlimited Voice/SMS/MMS 2 gig data allotment - 82.61
USD (Rogers Communications)

United States - Population widely Scattered, many rural areas without
significant infrastructure improvement raising construction cost for bearer
facilities hence huge construction costs in 4g rollout. Unlimited
Voice/SMS/MMS 2 gig data allotment - 75 USD (Verizon Wireless)

Beyond the above - there has never been a time in the last 10 years where
there was not a major network rollout in progress by the major carriers in the
US, first they built the digital networks (96-2001) then the 2.5g rollout (EV-
DO/EDGE (2001-2007) then the 3g Rollout (EV-DO Rev A and HSDPA) (2007 - 2009)
now the 4g Rollout (WiMax then LTE) (2009 to Current). This has been the case
world wide - but because of the geographical features of the US (higher
construction costs and lower density) our telecom costs will always be higher
than Europe and Asia.

~~~
the_imp
Finland - Unlimited voice & SMS/MMS + uncapped data at 2MBit/s: 35 USD/month,
but that's without a contract. If you're ok sticking with the same provider
for two years, you can get the same with 50MBit/s uncapped data. On the other
hand, if you're fine with 256 kbit/s uncapped data and paying 0.10 USD per
minute or SMS, it's just 4 USD/month.

Our population density is on average half that of the USA (16 people/km2
rather than 32 people/km2), and we're just as dispersed. The coverage of the
above-quoted provider you can see here:
[http://elisa.fi/kuuluvuus/](http://elisa.fi/kuuluvuus/)

Explaining the high cost of US mobile comms in terms of the situation in
Canada & Australia doesn't work, all you're really pointing out is that it's
far too expensive there as well. In other words, your friends are also being
fleeced.

~~~
evgen
Let me explain to you the difference between median and mean. Finland has an
average population density that is half that of the USA but mostly because the
population is heavily concentrated into six or eight islands around urban
areas and the rest of the country has a very low population density. To serve
80% of the population of Finland I would need to provide service to less than
20% of its area. The US has many more urban centers, swaths of very low
population density that are larger than most of western europe, and a high-
density cluster along the eastern seaboard that would be the equivalent of
providing Helsinki-level infrastructure over the entirety of Finland.

Not even close to similar.

~~~
the_imp
Ummm, did you even look at the coverage map I linked to? For the sake of
completeness, here are the other two national networks:

[http://www.sonera.fi/etsi+apua+ja+tukea/verkkokartat/peittoa...](http://www.sonera.fi/etsi+apua+ja+tukea/verkkokartat/peittoaluekartta/)
[http://kuuluvuus.dna.fi/Peittokartta/](http://kuuluvuus.dna.fi/Peittokartta/)

My point here is that each of the three has nearly complete coverage of the
whole of Finland. Sure, faster data than EDGE isn't available everywhere, but
there's still service. And given that we're offering to these service
providers only up to 5.5 million theoretical customers in total, they still
manage to make a profit at the rates they charge.

And somehow the situation in the US is so radically different that even with
your economies of scale customers are charged perhaps triple compared to here?
I'd say explaining how it works out that way calls for extraordinary evidence,
and I've yet to come across such evidence.

~~~
Aloha
I did.

On both of those maps LTE coverage covers but a fraction of the country,
Verizon has rolled out LTE to about 90% of its network footprint
([http://media.idownloadblog.com/wp-
content/uploads/2013/05/Ve...](http://media.idownloadblog.com/wp-
content/uploads/2013/05/Verizon-4G-LTE-coverage-20130520.png)) and they are
still in the midst of an active deployment - the sheer cost of this
deployement is staggering - the figures I know, for the Samsung LTE hardware -
just the hardware alone for a mid sized market, just 700 or so sites costs
around 70 million dollars - thats ahead of installation/construction costs -
which I'm estimating at somewhere between 100-150k a pop (assuming no
structural mods are needed, and there are no construction charges to bring in
new fiber backhaul) - figure the US has around 200,000 cell sites - I cant
find out how many finland has - but just on the size 104k sq miles (about the
size of colorado) I'd estimate no more than 2000 sites - probably less.

------
nargella
Like a year ago I wanted to see if there was a way to get an unlocked sim not
tied to a carrier and just use data. Reason being, I wanted to see how much I
was over paying for voice [I have 1000s of unused minutes]. I wasn't able to
find a data only sim option.

But by a base line calculation I'm spending ~$300+/year over the cost of VOIP.

------
dankoss
This article is seriously flawed. Yes, 4G transmission is more efficient for
the allotted wireless spectrum, but users are guaranteed to be using more
bandwidth, so the effective number of users per tower stays the same or
decreases. And it costs more, not less for 4G rollouts.

~~~
acdha
If users are on the same limited plans they're not using more bandwidth over
any appreciable time scale.

~~~
dankoss
I'm not talking about data use, I'm talking about instantaneous data rate.
Base stations are designed to handle a particular maximum throughput for a
given number of users relative to the available spectrum in that area. The
maximum throughput needed for many users on a 4G tower will be much higher
than it is for 3G, it isn't the same or less.

~~~
acdha
Again, this is only true on very short time intervals. If you're an AT&T user
throttled after 2GB per month you simply aren't going to be using 4G speed for
more than a single coffee break per month.

In the real world, of course, people rarely download data endlessly and so the
main difference is that a 4G user will use data at a higher rate for a shorter
period of time since they're downloading the same YouTube video as the 3G
user.

Since 4G takes considerably less time to establish connections than 3G, this
trend is even more favorable to network operators since more phones can go
from passive to active and back in any given time interval.

------
briandh
> Cellular plans in the U.S. with 500MB of data cost about $85.

I highly doubt that. The piece links to [1] which in turn cites [2].

In [2] "Mobile-broadband prices are collected from the operator with the
largest market share in the country", "prices applying to the largest city (in
terms of population) or to the capital city are used", and a the 500MB plans
are ones that include voice and text.

Moreover, the reported prices include taxes; while including taxes is
necessary to accurately reflect the cost to consumers, it does not give
insight into weather or not carriers are "gouging" consumers, which is what
the RWW piece alleges.

AT&T charges $65 for unlimited talk and text and 2GB of data [3], Verizon $60
with 1GB [4], T-Mobile $40 with 500MB [5], Sprint $55 with 1GB [6].

I won't get into prepaid plans and/or MVNOs exhaustively, but for instance,
Aio (AT&T's own MVNO) charges $35 for unlimited talk and text with 500MB of
unthrottled data if you enable auto-pay [7].

According to a 2011 report [8], the average tax rate is 16.26%, which would
still only bring the most expensive plan I mentioned (AT&T's) to $75.57.

Based on that, unless there is a very large number of consumers on old plans
that have not been brought down to current prices (and I'm not sure if that
even happens), I highly doubt that $85 figure.

[1]
[http://www.economist.com/blogs/graphicdetail/2013/10/daily-c...](http://www.economist.com/blogs/graphicdetail/2013/10/daily-
chart-5?fsrc=scn/gp/wl/dc/mobilebroadbandprices) [2]
[http://www.itu.int/en/ITU-D/Statistics/Documents/publication...](http://www.itu.int/en/ITU-D/Statistics/Documents/publications/mis2013/MIS2013_without_Annex_4.pdf)
(page 112) [3] [https://www.att.com/shop/wireless/data-
plans.html](https://www.att.com/shop/wireless/data-plans.html) [4]
[https://www.verizonwireless.com/wcms/consumer/shop/shop-
data...](https://www.verizonwireless.com/wcms/consumer/shop/shop-data-
plans/single-line-data-plans.html) [5] [http://www.t-mobile.com/cell-phone-
plans/individual.html](http://www.t-mobile.com/cell-phone-
plans/individual.html) [6]
[https://www.sprint.com/landings/framily/?INTNAV=ATG:HE:Frami...](https://www.sprint.com/landings/framily/?INTNAV=ATG:HE:FramilyPlans)
[7]
[https://www.aiowireless.com/shop/plans.html](https://www.aiowireless.com/shop/plans.html)
[8] [http://taxfoundation.org/article/states-target-cell-
phones-s...](http://taxfoundation.org/article/states-target-cell-phones-
stealth-burdensome-taxes)

~~~
paulhauggis
I get 5GB of 4G data and unlimited 2G after that for $30 in the US

~~~
rudedogg
Through?

~~~
pktgen
T-Mobile, I'm guessing, as I have the same plan. Look at [http://prepaid-
phones.t-mobile.com/prepaid-plans](http://prepaid-phones.t-mobile.com/prepaid-
plans). It's near the bottom, under "Pay by the day" even though it's a
monthly plan.

$30/mo. for 100 minutes, unlimited text, 5 GB LTE data, throttled to 2G but
unlimited with no overages after reaching 5 GB. And their LTE is fast as hell,
I have pulled 30/10 on it which is faster than my Qwest/CenturyLink DSL (at
the fastest speed they'll sell me).

~~~
mattstreet
I've got T-mobile for $30 a month. I live in Knoxville. It is almost not
terrible when it comes to data. I put up with it because I mostly just wanted
it for the occasional call and lots of texting.

------
EGreg
Actually didn't TMobile recently defect and then the others followed suit?
AT&T lowered my prices recently!

------
rajacombinator
My price went down massively thanks to the TMob kamikaze mission. 180->135 for
3 iPhones on ATT. Thank you TMob.

------
joshuaheard
It seems like it is getting cheaper. I get unlimited minutes, texting, and 300
mb of data for the same $40 I was paying 5 years ago, but I was also paying
extra for minutes, texting, data, etc.

------
JacobAldridge
Hey patio11, you're spending less time on BCC these days so even though the
feature set is the same you SHOULD be charging less.

Hey colinp, your backend AWS costs have come down, so you SHOULD be charging
less for tarsnap [1].

Hey you (yes, you), ignore everything you've read about surviving as a
startup. You SHOULD be charging your customers based entirely on your cost
base and ignoring any conversation about the value your customers receive.

[1] Is that even possible?

~~~
hyperbovine
TarSnap dropped its prices five weeks ago.

~~~
JacobAldridge
A move not-well-received by proponents of value-based pricing -
[http://www.kalzumeus.com/2014/04/03/fantasy-
tarsnap/](http://www.kalzumeus.com/2014/04/03/fantasy-tarsnap/)

~~~
tptacek
"Proponents of value-based pricing" is like "believers in anthropogenic global
warming" or "supporters of the theory of evolution". Be careful not to "teach
the controversy".

Tarsnap is tragically underpriced, and we have years of its business track
record (compared to every other well-known backup provider) to see that the
strategy of delighting the kinds of people who account for their storage costs
to the picodollar does not result in runaway success.

Colin does fine for himself, but that's because he pours an avalanche of
competence and expertise into what he's doing. If I were him, I'd be furious
that I was getting lapped by people who do a much poorer job. But probably
also hesitant to accept that my own low pricing had something to do with that.

~~~
cperciva
_I 'd be furious that I was getting lapped by people who do a much poorer job_

You'd only be getting lapped if you think life is a race to make money.

I'm doing Tarsnap because I wanted to build a good product, and by that metric
I think I'm far ahead of the "competition".

~~~
tptacek
You can treat your business as a labor of love, but be aware that you're
making it less likely that the broad market will benefit from what you've
built. Which is frustrating, because you have perhaps the only trustworthy
cloud backup system I'm aware of.

~~~
hyperbovine
Why frustrating? The guy's sitting right there telling you he's happy. The
$tartup "culture" isn't for everyone, aight?

