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Back in the early days of popular use of the Internet, ISPs including AOL and MSN charged by the minute for dialup access with no cap. People were afraid to sign up because they thought they might leave their PCs on and get huge bills. Some small ISPs experimented with subscription pricing; all the access you could use for $19.95. When we started AT&T WorldNet Service, we borrowed that idea and popularized it with the still hugely powerful AT&T brand behind it. Some said we’d go broke; others that we would ruin the Internet.
To hedge our bets, we also offered a metered access plan. We didn’t want to lose out on people who planned to spend less that $19.95 per month. To our surprise, people typically converted themselves from metered access to subscription when their monthly bill was around eleven or twelve dollars. And their usage didn’t spike after conversion. People were paying a premium for predictability and simplicity. With a subscription plan, they didn’t feel they had to keep track of minutes to make sure they weren’t being overcharged and they weren’t worried about surprises."
