Liquid Pricing for Digital Infrastructure Services

Authors:
Subhajyoti Bandyopadhyay;Hsing Cheng
Affiliations:
Department of Decision and Information Sciences, University of Florida, Gainesville, shubho@ufl.edu;Department of Decision and Information Sciences, Warrington College of Business Administration, University of Florida, hkcheng@ufl.edu
Venue:
International Journal of Electronic Commerce
Year:
2006

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Abstract

Broadband access providers, facing infrastructure overcapacity combined with low service penetration, have begun to introduce intermediate levels of service. "Liquid bandwidth" is a novel pricing scheme that lets customers pay a per-unit access charge to temporarily upgrade their service when they want to utilize broadband for newer types of on-line content. Such pricing schemes can significantly boost the profits of the service provider. Effective penetration of broadband services in a monopolist market might require regulatory intervention or some form of subsidy.