[comp.dcom.modems] FYI -- PC Pursuit Again

MVM@cup.portal.COM (01/13/89)

         SECOND ROUND OF ANNOUNCEMENTS and ANSWERS to COMMON QUESTIONS
                     REGARDING the PC PURSUIT PRICE CHANGE
                                    1/12/89

 To ALL PC Pursuit customers:

 Before reading  this bulletin further, you should make sure you have read the
 first "ADDITIONAL ANNOUNCEMENTs..." bulletin.

 It has been just over a week since  the first  "ADDITIONAL ANNOUNCEMENTs...".
 We  have  had  a  favorable  response  to  those announcements.  However, the
 messages appearing everywhere are  still rather  heated, fueled  by incorrect
 (although  often  understandable)  assumptions,  unanswered concerns, and the
 like.  As a result of the incredible  availability of  suggestions (and other
 input), we  have some  new announcements.   Following these announcements are
 some more answers to common concerns & questions.

 The new announcements:

 1.  WE WILL BE ABLE TO ALLOW  USE OF  A SINGLE  ID WITH  THE MULTIPLE ACCOUNT
     OPTION.    That  is,  you  will  be  able to order any number of accounts
     (blocks of 30 monthly hours at $30 each)  to work  with one  ID/PW combo.
     This should  improve accounting and ease of use issues.  Multiple account
     IDs will also correspondingly multiply the second tier break point.

 2.  IF YOU ORDER A  MULTIPLE  ACCOUNT  ID  BEFORE  MAY  31st,  1989, EXISTING
     CUSTOMERS WILL  NOT BE  CHARGED AN  ADDITIONAL "SIGN-UP"  FEE.  Beginning
     with June 1st, 1989, each time you call/write  to INCREASE  the number of
     accounts (or  blocks of 30 monthly hours) covered under your ID, you will
     be charged a $30 sign-up fee  (which will  likely be  called a processing
     fee).   UNDER NO  CIRCUMSTANCES WILL MORE THAN ONE SIGN-UP FEE BE APPLIED
     PER ID CHANGE/ORDER (even if many  accounts are  added/ordered under that
     one  ID).    There  will  be  no  charge to reduce the number of accounts
     covered (or to cancel).

 3.  WE ARE EVALUATING OPTIONS  OF SPECIAL  PRICING FOR  ACCESS TO  PC PURSUIT
     NETWORK  (DAF)  HOSTS.    Suggestions  are  encouraged.   All adjustments
     (including those already announced online)  will  be  finalized  and more
     formally announced (via mailing & Net Exchange) in February.

 4.  If you  exceed your  cap (some  multiple of 30 hours), you will receive a
     statement the following month showing what  your total  charge is.   THIS
     STATEMENT WILL  INCLUDE CALL  DETAIL.  The specific detail to be included
     has not yet been finalized (since we now have until May to adjust this).



 Addressing common concerns & questions:

 1.  Why not have a higher cap?  Why is a cap needed?  Does  Telenet want some
     types of  customers to  cancel?   Why not  just charge more for unlimited
     use?  Doesn't Telenet  appreciate Pursuiters'  FCC effort?   What  of the
     rule-of-thumb principle which states: As sales/customers increase, prices
     go down (or stay the same longer)?

     All of these questions  can be  answered through  an understanding  of PC
     Pursuit's origins  & growth.  When PC Pursuit was launched, it was viewed

     as a service that would use the excess capacity of other services  -- ie.
     it didn't have to pay for many of its own costs.  This concept (called an
     "incremental service") works fine, as long  as the  incremental service's
     use (and  cost) is  largely insignificant  compared to the other services
     that it is riding  on.    You  may  have  noticed  that  Telenet  has not
     advertised  (or  otherwise  significantly  promoted) PC Pursuit.  That is
     because an incremental service (by its nature) is unable to accommodate a
     significant number  of customers.   What wasn't counted on is the awesome
     power of word-of-month within  the  hobbyists'  community  (BBSes).   The
     Pursuit customer  base began to grow very quickly, and has never stopped.
     It got to the point that  the quality  of service  degraded to  the point
     that even patient customers had difficulty using PC Pursuit (about a year
     ago things were at an all time low).  To  make matters  worse, there were
     too many  customers (and too much usage) to consider it as an incremental
     service any  longer.   So not  only was  there no  marginal profit, there
     wasn't  money  to  pay  for  ANY improvements, expansion, development, or
     dedicated personnel.   This  was  the  situation  when  I  started  as PC
     Pursuit's Product  Manager in  February 1988.   I was asked to review the
     product, and make recommendations to either "fix" the  service, or cancel
     it altogether.   The  most obvious  solution (and  many were  in favor of
     this) was to cancel the service immediately (PC Pursuit wasn't paying its
     way, customers  were complaining  of poor  service &  support, there were
     serious billing problems, lots of abusers  & hacking  -- all  because the
     service was  not intended  to grow  as it  had).  Keeping the service the
     same was not an option either  --  Telenet  prides  itself  for providing
     *superior* quality datacomm at the best rates possible.

     The key to the solution was that we found a pricing scheme which is still
     extremely  low,  has  many  of  the  same  attractions  as  the  original
     (predictable fixed monthly bill, large blocks of time already paid for so
     regular extended use is  encouraged),  was  fairest  to  the  majority of
     customers  (just  increasing  the  price substantially would be unfair to
     low-end users --  who  have  less  presence  but  are  in  the majority),
     provides for  enough funds  to pay  for needed  improvements, and finally
     removes the second class stigma because it becomes a regular service (ie.
     it  makes  some  profit  for  the  company while paying its own way).  In
     addition, it was agreed  that our  customers deserved  to see substantial
     improvements BEFORE  a price  change, as evidence to PC Pursuit's greatly
     improved priority.  This is why we waited almost a full year  to announce
     any price changes (although exact pricing wasn't finalized until December
     1988).



     We want to work with  you.    We  are  listening  to  everything  you are
     suggesting.   Together, we  can try  to satisfy as many peoples' needs as
     possible.  To offer something for every type of customer is the  goal, as
     long as  its fair  to the majority (which includes casual users).  If you
     step back and look at the new pricing  on its  own (its  not objective to
     compare it  to old pricing which wasn't designed to pay its own way), its
     hard to argue that we still don't have  a pretty  amazing price.   If you
     ask our  competitors, they're  still scratching their heads wondering how
     we can keep the price so  low and  claim to  make ANY  profit.   I'm very
     proud of  this.  It would have been impossible to do if the FCC had ruled
     differently last year.  I repeat my thanks to you for your efforts.

 2.  Why did Telenet not  give more  notice (to  existing customers  or recent
     sign-ups)?    The  announcement  was  made  as  soon  as  new pricing was
     approved.  The approval was delayed several times, resulting in  a rather
     small margin  of time.   This small margin was pointed out by many and is
     one of the reasons that over cap charges were delayed until May 1989.

 3.  Why doesn't Telenet offer online password changes, or  online charges-to-

     date information, etc..., like other "online services"?  Telenet's Public
     Data Network (PDN -- which PC Pursuit uses) should not  be compared  to a
     centralized computer  system based online service.  It is a long distance
     communications *network* based  service.    Most  such  features  are not
     theoretically impossible,  but they are not nearly as straight forward to
     implement.  A fairer comparison would be that of another LD service, such
     as  AT&T's  Reach  out  America.    This  service  doesn't  even have IDs
     (allowing the customer to call from any phone) -- as far as I know.  That
     said, don't be too surprised if you see a new feature in this catagory in
     the near future (I  can't be  specific, it  has not  yet been announced).
     Regrettably, billing  or usage information online is not expected anytime
     soon.

 4.  How much $ did Pursuit get in '88,  how many  customers, what  is average
     usage... or  other statistics/figures?   The  problem with these sorts of
     questions is that answering them could  potentially break  a rule  that I
     can  not  break  ->  Thou  shall  not  disclose  proprietary information,
     especially if it is of any value to a competitor.  I can say  two things-
     we have  many thousands of customers, and, the average usage per month is
     well under 30 hours per month.

                                   Sincerely,

                                   Peter Naleszkiewicz
                                   Outdial Services Product Manager

jwright@atanasoff.cs.iastate.edu (Jim Wright) (01/13/89)

In article <8901121632.1.21423@cup.portal.com> MVM@cup.portal.COM writes:
[...]
> Addressing common concerns & questions:
[...]
>                                   Sincerely,

>                                   Peter Naleszkiewicz
>                                   Outdial Services Product Manager

Thanks for the message.  But you haven't answered the most important
question of all:  Did you actually read all those thousands of messages
left on the Net Exchange?     :-)  :-)  :-)  :-)