Flat Fee vs Pay-per-use


Flat Fee vs. Pay-per-use

Most Internet users are either not charged to access information,
or pay a low-cost flat fee. The Information SuperHighway, on the
other hand, will likely be based upon a pay-per-use model. On a
gross level, one might say that the payment model for the Internet
is closer to that of broadcast (or perhaps cable) television while
the model for the Information SuperHighway is likely to be more
like that of pay-per-view T.V.

"Pay-per-use" environments affect user access habits. "Flat fee"
situations encourage exploration. Users in flat-fee environments
navigate through webs of information and tend to make serendipitous
discoveries. "Pay-per-use" situations give the public the incentive
to focus their attention on what they know they already want, or to
look for well-known items previously recommended by others. In
"pay-per-use" environments, people tend to follow more traditional
paths of discovery, and seldom explore totally unexpected avenues.
"Pay-per-use" environments discourage browsing. Imagine how a person\'s
reading habits would change if they had to pay for each article they
looked at in a magazine or newspaper.

Yet many of the most interesting things we learn about or find come
from following unknown routes, bumping into things we weren\'t looking
for. (Indeed, Thomas Kuhn makes the claim that, even in the hard
sciences, real breakthroughs and interesting discoveries only come
from following these unconventional routes [Kuhn, Thomas, The Structure
of Scientific Revolutions, Chicago: University of Chicago Press, 1962]).

And people who have to pay each time they use a piece of information are
likely to increasingly rely upon specialists and experts. For example,
in a situation where the reader will have to pay to read each paragraph
of background on Bosnia, s/he is more likely to rely upon State Department
summaries instead of paying to become more generally informed him/herself.
And in the 1970s and 1980s the library world learned that the introduction
of expensive pay-per-use databases discouraged individual exploration and
introduced the need for intermediaries who specialized in searching
techniques.



Producers vs. Consumers

On the Internet anyone can be an information provider or an information
consumer. On the Information SuperHighway most people will be relegated
to the role of information consumer.

Because services like "movies-on-demand" will drive the technological
development of the Information SuperHighway, movies\' need for high
bandwidth into the home and only narrow bandwidth coming back out will
likely dominate. (see Besser, Howard. "Movies on Demand May Significantly
Change the Internet", Bulletin of the American Association for Information
Science, October 1994) Metaphorically, this will be like a ten-lane
highway coming into the home and only a tiny path leading back out
(just wide enough to take a credit card number or to answer multiple-choice
questions).

This kind of asymmetrical design implies that only a limited number of
sites will have the capability of outputting large volumes of bandwidth
onto the Information SuperHighway. If such a configuration becomes
prevalent, this is likely to have several far-reaching results. It will
inevitably lead to some form of gatekeeping. Managers of those sites will
control all high-volume material that can be accessed. And for reasons of
scarcity, politics, taste, or personal/corporate preference, they will
make decisions on a regular basis as to what material will be made
accessible and what will not. This kind of model resembles broadcast or
cable television much more so than it does today\'s Internet.

The scarcity of outbound bandwidth will discourage individuals and small
groups from becoming information producers, and will further solidify
their role as information consumers. "Interactivity" will be defined as
responding to multiple-choice questions and entering credit card numbers
onto a keypad. It should come as no surprise that some of the major players
trying to build the Information SuperHighway are those who introduced
televised "home shopping".



Information vs. Entertainment

The telecommunications industry continues to insist that functions such
as entertainment and home shopping will be the driving forces behind
the construction of the Information SuperHighway. Yet, there is a
growing body of evidence that suggests that consumers want more
information-related services, and would be more willing to pay for these
than for movies-on-demand, video games, or home shopping services.

Two surveys published in October 1994 had very similar findings. According
to the Wall Street Journal (Bart Ziegler, "Interactive Options May be Unwanted, Survey Indicates," Oct. 5, 1994, page B8), a Lou Harris poll found that "a total of 63% of consumers surveyed said they would be interested in using their TV or PC to receive health-care information, lists of government services, phone numbers of businesses and non-profit groups,