All-you-can-eat for the obese


Scan originally appeared in Wired 03.11, November 1995

"Oh deary me – who let the intern play with Photoshop 3 again…? Thank God he used drop-shadow, or we would have looked like complete amateurs!"

Horrible ad aside, Pipeline was a hugely successful ISP, with a snazzy point-and-click service. In the end, its customer-base ended up at Earthlink. Original subscribers can to this day still use their Pipeline email address - classic.

Pipeline was also one of the first to introduce flat-rate subscriptions. AOL quickly followed suit and introduced its flat-rate program in August 1996, instead of the old hourly fee.

Since then it’s been a growing headache for any ISP, as the business model is based on a courageous belief in current usage-patterns. The problem for the ISP is not the random crazy user who streams 20 tv-channels simultaneously 24/7 – that guy is taken care of with the small print in the contract. No, it’s when Mr. and Mrs. Bob start using cool services like Hulu, Netflix, BBC iPlayer, Slingbox – this stuff has flat-rate killer written all over it. You might as well open an all-you-can-eat restaurant for obese people only.

As consumers, we love the idea of flat-rate, and that’s also why it’s not going away again. But don’t be surprised if you see price-hikes on flat-rate 3G subscriptions, as average usage goes up dramatically and network capacity struggles - ask any San Franciscan iPhone owner, or AT&T tech-employee, for that matter...

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