What are metered services?

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Metered services involve paying only for what is used, rather than a fixed fee for unlimited access. They are used in utility services and have been experimented with in telephone services. Metered services remain a viable billing structure in many applications, allowing customers to choose between fixed monthly fees or variable metering services.

Sometimes called pay-per-use or metered services, metered services involve any type of payment structure where consumers only pay for what they actually use. This contrasts with the model of paying a fixed fee on a recurring basis for unlimited access to a particular good or service. Utility services such as electricity and water services are common examples of metered services.

Over the years, companies have experimented with using metered services instead of traditional flat rate services. This is the case with telephone services for business and residential customers. During the 1980s, many local telephone service providers introduced metered services as an alternative to the flat monthly fee for local services. Essentially, the subscriber would pay a small fee per minute when an incoming or outgoing call is activated. For subscribers who didn’t use the phone much, the monthly bill savings were significant. However, the advent of widespread use of the Internet and dial-up services has made metered services to local telephones impractical for many subscribers.

Metered services remain a viable billing structure in many different applications today. Businesses and individuals subscribed to a toll free number typically pay a flat fee per minute for any usage generated during the usual billing cycle. Online services such as music download sites often charge a fee per file download rather than offering unlimited downloads for a flat monthly fee. It is common for most audio conferencing agencies to charge a per-minute fee per connection, rather than offering customers a flat fee for unlimited use of the specified number of connections each month. There are even examples of information technology consultants offering metered services based on usage rather than charging a flat monthly fee.

Many companies find that metered services can be more cost-effective in some situations. Essentially, using metered services allows the consumer to only pay for what he or she is actively using and not any extras. Some companies offer customers options in payment structures that allow the customer to choose a fixed monthly fee or variable metering services as a way of allowing the customer to determine which payment option would be appropriate for the customer’s individual situation.

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