Lot’s of things happening this week related to queue management. You don’t get to say that too often! They range from priorities at the patent office to Chuck Schumer having a wacky proposal for call centers to, of course, AT&T monkeying with its data plans pricing.
Let’s start with the last one. Beginning Monday, AT&T will no longer treat data plans as an all you can eat buffet. Instead, they will sell tiered plans that limit how much bandwidth customers can use before incurring additional charges. Or as the Chicago Tribune so eloquently put it, There’s a Cap for That (June 2). Here is what the Trib says AT&T hopes to accomplish.
AT&T hopes to ease congestion on its network, which has drawn complaints, particularly in big cities. But the approach could confuse customers unfamiliar with how much data it takes to watch a YouTube video or fire up a favorite app.
To put this in perspective, consider this stylin’ diagram from the Globe and Mail (The wireless data crunch, Jun 2):
Smart phone and tablet computers induce people to use data-intensive services. But most of those uses can fit under AT&T’s data caps. Their plans are for 200MB and 2 gigabytes. So those who are fairly average users may well be able to get by with the lower cap and actually spend less money with AT&T than they do now. Of course, not everyone is average. The Globe and Mail also has a posting on the biggest data users with Canada’s Wind Mobile (You think you use a lot of smart phone data? Jun 3). Wind Mobile was the first provider with unlimited data access in the Canadian market. Here are the top ten:
Those numbers are in gigabytes — GIGABYTES!! — per month. How do you get north of 100 gigabytes?
And, yes, you read that list correctly. Someone out there has managed to chew through 118 gigabytes of data in one month. One-hundred and eighteen. “They’re just pounding it,” Mr. Lacavera said, laughing. “It’s truly unprecedented data consumption.” Unprecedented, to be sure. Filthy and retrograde and immoral and sinful? Probably! But, man, 118 gigs deserves some sort of award. And some people, Mr. Lacavera said, are even hosting websites off of smart phones and attempting some sort of mini Internet Service Provider (ISP) businesses by operating servers. That much of this is likely peer-to-peer file-sharing goes without saying.
AT&T apparently faces similar issues as the Canadians. We have posted about iPhone bandwith hogs before — a couple of times. What AT&T has claimed in the past is that “only 3% of its smartphone users — primarily iPhone owners — are responsible for 40% of total data usage, largely for video and audio.” So there has been talk for some time that AT&T was going to go down this road. Indeed, back in October, Farhad Manjoo at Slate suggested just the kind of approach AT&T has announced.
I was dubious then, and I am dubious now. AT&T’s problem is not that too many users are using too much bandwith in aggregate. The problem is that too many users are using bandwith at the same time. Could someone get to, say, 20 gigabytes of data in month on AT&T’s much maligned network? Sure but they wouldn’t be doing it at the morning rush hour in Manhattan. If someone is downloading that much data on AT&T, they are doing it off-peak hours, when the externality they impose on other uses is pretty benign. Making that guy pay more may be good for AT&T’s revenue but it isn’t going to do jack for AT&T’s other customers when they can’t get a signal when they ride the train in the morning. What would work better is peak load pricing — charge more for using bandwith during busy times. That would keep the college kids from watching YouTube during rush hour and maybe let the executives make their phone call.
OK, on to the patent office! Here is what they are planning, queue-wise (Patent Fast Track Proposed, Jun 3, Wall Street Journal).
U.S. Patent and Trademark Office chief David Kappos is proposing a new three-track system for patent applications that would allow applicants to pay an undisclosed amount on top of the standard $1,090 filing fee to jump to the front of the line for expedited reviews.
“Not every application needs to go at the same speed. Some need to go fast and some need to go more slowly,” Mr. Kappos said in an interview. The system will allow applicants to essentially select which innovations are the most important for patent examiners to tackle first, Mr. Kappos said.
For you queuing theory fans, AT&T is playing with admission control but the patent office is looking to impose a new service discipline. There seems to be a role here for priorities. The current time to get a patent approved is 34.6 months. Surely someone is willing to pay to jump that queue.
Again, I am dubious. I am not dubious that people will pay a premium. I am concerned that too many will pay a premium. The patent office envisions that there three tracks will have the mid-tier essentially matching current service. However, unless the payments for premium service goes to expanding resources, performance for the middle level could easily slide past 34.6 months. Hell, if you were out maximize profit, that is probably what you would do. But then more and more people will opt for premium service which will impact lower levels priority levels even more. In effect, unless the cost of premium service is wicked high, IBM and their ilk are going to opt for premium service on every patent they file and they file a lot of patents. Thus, this is unlikely to improve service significantly for anyone.
Finally, crazy Chuck Schumer, the esteemed New York Senator who is not above belittling front-line service personnel. He wants to keep some of those front-line workers in the US (Schumer pushes for foreign call center tax, May 31, Marketplace).
In an effort to slow the outsourcing of American jobs, New York Senator Charles Schumer is proposing a tax on companies that transfer calls with U.S. area codes to foreign call centers. His proposed legislation would tax companies 25 cents for each customer service phone call that is outsourced to a foreign call center. Schumer also wants to make companies inform customers when their calls are being transferred outside the U.S. and to which country.
To hit a recurring theme, I am dubious. There is the traditional economist argument that taxes are prone to distorting economic decisions and costs will get passed on to customers at some point. I think there are special features of customer service that Schumer is ignoring. Specifically, he is assuming that these jobs have to be done. That is not clear at all. Go to Amazon’s web site and hunt for the number for their inbound call center. Good luck with that. Many firms do not have to provide call centers. Yes, firms need to provide some forum for customer feedback but it doesn’t have to be on the phone. Once upon a time, customers would write letters. Now they can just send an email — the majority of which can be answered at least in part by automated systems. Call centers become almost a luxury if a firm is content to only deal with customers who have internet access. Even for those firms that prefer call centers (e.g., to keep queries out of physical stores or branches) customer service can adjust by making waits longer. Schumer’s proposal may bring some jobs back to the US but it certainly doesn’t guarantee good service.