Explanation by,, the Shanghai Mutual Flat Rate Compared with the Measured Rate fut rates are adopted as the method of charging the subscribers. The result of this obviously must be, assuming that a company's total receipts are sufficient to pay for the cost of operating and maintaining its property and paying interest on the money. invested, to ive some of the customers on the flat rate.a great deal more. service than others receive, so. that the analler users. manifestly pay more than their service should require, while the larger users who keep their telephones constantly busy, receive a service of much greater value and expense to the company than is justified by the annual bills which they pay. These large consumers under the flat rates also interfere with the traffic of the! smaller users by keeping their ti so busy that the smaller users are unable conveniently to get into conversation with the busy, lines Jconnexions which are. expensive to the company and annoying to the Range of Flat Rates The greatest range of rates that it is possible to make with the flat rate arrangement is relatively emall, the difference between the highest paying flat rate customer and the Jowest paying flat rate [customer being comparatively small, and this tends to retard telephone development and prevent its general The measured rate arrangement manifestly makes it possible to reduce the price of the telephone to the small user to the smallest possible annual charge, that is, to charge which is just sufficient to cover a reasonable interest and depreciation for the portion of the plant that must be set aside for the use of that individual user (or the average of the users in his particular class), increased amount which is proportional to, the actual number of messages transmitted from his telephone in the year. It is only by. this arrangement that a large city service may be extended to the small busi-ess men and the small residence and apartment dwellers. When the measured rates are introduced exclusively, and carried to their logical conclusion, it may increase the cost of telephone service to the Iorgest business users, but these users are even then charged no more than the actual service rendered to them plus costs to the company, plus an appropriate amount to represent interest on the investment; and it is an obvious business principle that each class of service should not only be satisfactory to the users, but should also return itx reasonable proportion of remuneration to the company furnishing the service.
Unavailing Calle It is found that if a line is used 11 times an hour it may be expected to be reported busy at least. twice during the hour to calling. subscribers. who desire to communicate with that line; but if i is used 21 times an hour it may be expected to be reported busy not less than 10 times. This plainly shows that the unavailing call crease in a tremendous ratio the load on a telephone line increases.
Our study of the problem conces us that an extension of the flat rate telephone service would tend so greatly to increase the useless calls over the telephones, and so overload the Hines, that the unavailing calls would' increase tremendously, and thus increase the annual expense of the service £0 largely that the average price per telephone would be given a tendency) to rise instead of fall, Tt ig an accepted fact in telephone circles that the service per telephone costs more as the number of telephones connected with the plant increases. As the number of telephones increases each subscriber hax the opportunity. to call upon more people by telephone, and the law of averages would indicate that" the number of calls day from euch telephone should increase, thus making the service more expensive to the operating Jcompany, provided the service is lat vote service and unnecessary
Text read from the printed page and cleaned; old type leaves the occasional error.