FLAT RATE ACCESS, ALL YOU CAN EAT OR BUCKET PLANS. These
plans offer either unlimited access or at least more access than
the service provider thinks you are likely to consume. The
advent of the “bucket” plan rocked the cellular industry by giving
users a large enough “bucket” of voice minutes so that they
became less sensitive to the time spent on wireless calls.
Price is not dependent on how much is consumed. Light
users subsidize heavy users and everyone pays the same entry
fee. These plans are great for heavy users who worry about
going over budget and want predictable expenses. These pricing
plans are bad for light or infrequent users who don’t want
a periodic fee for less frequent usage.
These plans have worked well for voice in large part
because everyone understands how much they might use—not
everyone is sure of how much they will use new data services.
For this reason, flat rate plans can be bad for encouraging
a trial of new services when end users expect usage to be low.
It’s hard to assess how often you’ll use new content or services
until you have tried them for a while. But who wants to pay for
the month upfront before you know? Difficulty in canceling
subscriptions adds to the barrier for new services. Flat rate or
bucket plans are great for encouraging the trial of new services
when end users expect usage to be high or for frequent users
after they become familiar with typical usage and want to control
costs.