From: tcmay@netcom.com (Timothy C. May)
Date: Sun, 24 Apr 94 21:21:42 PDT
To: sdw@meaddata.com (Stephen Williams)
Subject: Re: The un-BBS
In-Reply-To: <9404250138.AA05425@jungle.meaddata.com>
Message-ID: <199404250422.VAA17668@mail.netcom.com>
MIME-Version: 1.0
Content-Type: text/plain



Stephen Williams writes:
...
> Unusual use of the word 'subsidized'...  Most of the above I would
> just call indirectly funded.  I don't think you'd say that corporate
> employees get subsidized pencils just because it's an expense item for
> the corp. and they buy in bulk.

When the costs are underwritten by others, and the marginal cost to an
employee or student is zero or near zero, I call that a subsidy. The
pencil example is indeed a subsidy, just as when we often hear things
like "Intel is subsidizing the costs of lunch for its employees."

(Subsidies occur for various purposes.)

Oxford English Dictionary, Second

subsidy -- 1. help, aid, assistance   (and many related variants)

American Heritage, Third

subsidy -- 2. Financial assistance given by one person or government
to another.  (and so on)

> I guess what you meant was 'institutionally supported'.  'Subsidized'
> normally means gov. grants to me.  (Yes, a fraction of the above
> examples get gov. grants specifically for Internet expense, but not
> most.)

See above. This meaning of subsidy is commonly used, at least by me
and the dictionary makers. When a father angrily says to his son,
"Look, who do you think is subsidizing your little adventures?," this
is the meaning. Or the lunch example.

Regardless of such nit-picking about exact meanings of words, there is
no doubt that for most people on the Net today, their costs are
subsidized (paid for all or in part by others) and thus their market
decisions are skewed or distorted by this process. The millions of
college students with Net access through their schools can hang out in
MUDs and MOOs for many hours every night, knowing their costs are
fixed (that is, the costs are folded in to their fees, possibly, or
don't exist at all....who can say). 

The point is that this "free" (marginally, at least, and largely free
even in overall terms) service will generally outcompete one which
offers similar services but which requires the user to pay for his use
in a standard sort of way.

And, yes, these same arguments apply to why corporate and government
users, whose access to the Net is provided by their employer, will
also pick a service that has zero marginal cost to them over a service
(like FidoNet) that may cost them hundreds of dollars a month for a
feed (I won't get into the range of FidoNet connections, or what
telecom pricing trends will means, etc.).

(Again, I am making no arguments here for or against the subsidization
of students or employees. Merely commenting on a competitive fact of
life about the Net.)

--Tim May




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