The growth and development of the Internet will be best served if network services are priced according to cost (including congestion costs), and subsidies should be distributed so that users pay those charges. Implementing subsidies instead by continuing to charge zero prices would give the biggest subsidies to the wrong users, would not provide useful signals to guide investments in network expansion and upgrading. Using an efficient pricing scheme instead will encourage growth in network use and capacity, and guide resources to the highest-value users.
Predictor: MacKie-Mason, Jeffrey K.
Prediction, in context:The 1995 book “Public Access to the Internet,” edited by Brian Kahin and James Keller carries the chapter, “Pricing the Internet” by Jeffrey K. MacKie-Mason and Hal R. Varian. MacKie is an associate professor of economics and Varian is a professor of economics at the University of Michigan. They write: ”The growth and development of the Internet will be best served if network services are priced according to cost (including congestion costs), and subsidies should be distributed so that users pay those charges. Implementing subsidies instead by continuing to charge zero prices would give the biggest subsidies to the wrong users, would not provide useful signals to guide investments in network expansion and upgrading. Using an efficient pricing scheme instead will encourage growth in network use and capacity, and guide resources to the highest-value users.”
Date of prediction: January 1, 1995
Topic of prediction: Information Infrastructure
Subtopic: Cost/Pricing
Name of publication: Public Access to the Internet (book)
Title, headline, chapter name: Pricing the Internet
Quote Type: Direct quote
Page number or URL of document at time of study:
Page 300, 301
This data was logged into the Elon/Pew Predictions Database by: Guarino, Jennifer Anne