Flat Fee
From Wikipedia, the free encyclopedia
A flat rate (sometimes "linear rate") refers to a pricing structure that charges a single fixed fee for a service, regardless of usage. Rarely, it may refer to a rate that does not vary with usage or time of use.
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[edit] Examples
[edit] Internet
For Internet service providers, flat rate is access to the Internet at all hours and days of the year (linear rate) and for all customers of the telco operator (universal) at a fixed and cheap tariff.
Flat rate is common in all the broadband access to the Internet.
A charge tariff is a class of linear rate, different from the flat rate, where the user is charged by the uploads and downloads (data transfers). The GPRS / data UMTS access to the Internet in some countries of Europe has no flat rate pricing, following the traditional "metered mentality". Because of this, users prefer using fixed lines (with narrow or broadband access) to connect to the Internet.
A wavy rate is not a linear rate, because the Internet surfer pays the monthly fixed price to use the connection only during a certain range of hours of the day (i.e. only in the morning or, more typically, only at night).
[edit] Telephone
American Telecommunications companies commonly offer a flat rate to residential customers for local telephone calls. However, a regular rate or Message Rate is advantageous for those who only make a few short calls per month. Flat rate is rare outside the USA, and cellular telephone service is usually not available at a flat rate.
- See also Automatic Message Accounting
[edit] Electricity
A flat rate for electricity is different from that for other services. An electric utility that charges a flat rate for electricity does not charge different rates based upon the demand that the customer places on the system. A customer pays the same amount whether they use the electricity in bursts during mid-day, when demand and the utility's costs are highest, or if they spread it out over the entire day. However, if the customer uses a different amount of electricity, they are charged a higher or lower amount. Residential customers and small businesses are usually charged a flat rate, though not the same rate per kilowatt-hour. A special type of electricity meter, a time of use meter, is required to charge a non-flat rate. Time of use meters can lower a customer's electricity bill, if they use electricity mostly during off-peak hours. Some utilities will allow a customer to change to a time of use meter, but they charge for the cost of the meter and installation.
[edit] Transport
In most parts of the world regular users of public transport, especially commuters, make use of weekly, monthly or yearly season tickets that allow unlimited travel for a fixed fee. In some countries year passes are available for the entire national railway network. Some, such as the Eurail Pass, are intended for foreigners, in order to encourage tourism. Road users are normally charged a combination of fixed and variable fees, in the form of vehicle duty and fuel duty.
