BT line rental increases – Why do paper bills at BT cost so much?

The Telegraph reports that line rental for all British Telecom customers will increase by £1/month.

Communication Breakdown
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For somebody who receives paper bills, this is a rise from £11.50/month to £12.50/month for those on paper billing. For those on paperless billing (i.e. online), bills will increase from £10.25/month to £11.25/month. According to BT, customers can mitigate the price rise by switching to paperless billing at the same time. This is a fantastic demonstration of price discrimination.

On face value, having to pay an extra of £1.25/month for a paper bill seems ridiculous. It is obvious that this £3.75 per quarterly bill charge isn’t there to cover BT’s costs. There is no way that printing, processing and mailing a phone bill every quarter would cost more than 30p. That would leave BT with an additional £3.45 of pure profit per quarter for every paper bill customer.

I’ll explain using the old prices of £11.50 for paper billing and £10.25 for paperless billing.

The market rate for line rental is £11. BT’s rivals such as Virgin Media charge approx. £11. For BT to be price competitive, it must have a lower line rental than Virgin. If BT generally offered line rental at the paper bill rate of £11.50, it would be extremely uncompetitive against Virgin. However, at the paperless rate of £10.25, BT would be much cheaper than Virgin. But they’d probably make a lot less money as the profit on each line rental would be lower than it could be.

Companies get the best of both worlds by charging customers who don’t mind paying more (price inelastic customers), more. Customers which do shop around for line rental and do care how much they pay (price elastic) will pay less.

Red London Phone Boxes
Creative Commons License photo: markhillary

The costs of paper and paperless billing have absolutely nothing to do with the different line rental charges. It’s simply a way for BT to differentiate between how price elastic customers are. My grandmother can’t be bothered to shop around or to go to the effort of accessing electronic bills. She has paper bills and pays £11.50.

On the other hand, somebody like me will shop around to find the best deal. If BT charged me £11.50 as well, I would choose Virgin for a saving of 50p/month. But as BT’s paperless line rental is lower than Virgin’s line rental, I would choose to go with BT and paperless. For me, the cost saving would be worth the small extra effort to check an online bill.

By charging different prices to different customers depending on how much they are willing to pay, BT can increase their customer base without cutting their prices for everybody and their profits.

It is quite a clever way of operating price discrimination and has a double whammy in allowing BT to proclaim that it is encouraging people to be green. It’s something businesses do a lot and something well worth being aware of. See my previous post , “Why is popcorn at the cinema so expensive?”, for another example.

Take a holiday in the UK!

With the UK economy now officially in recession and the Pound recently breaking through the 1986 low of $1.37, it’s never been more expensive for us British to take a holiday abroad. The Pound has lost 35% of it’s purchasing power in less than a year.

River Thames
Creative Commons License photo: wili_hybrid

So I guess the days where we used to be able to go to the States, eating lavishly for £4 a go and stocking up on plenty of shopping and electronics are long past us. I’ve been staying in the UK and enjoying the sights here rather than going abroad.

But Whilst the exchange rates have been terrible news for UK residents, my American friends have been over the moon. Everything in the UK is now at a 35% discount compared to last year which means there has never been a better time in recent memory to visit the UK.

London must be one of the most amazing places in the world to visit. As somebody who has recently moved to the big city, I have loved every minute of being in London. There is never a shortage of things to do and see. The host of the 2012 Olympic games, London is also the home to the iconic Big Ben and the Houses of Parliament, the London Eye, Buckingham Palace, Trafalgar Square, the British Museum, the Tower of London, St. Paul’s Cathedral, Camden Market, Piccadilly Circus… And the list goes on.

Creative Commons License photo: defrog

A short train journey from London, there are the wonderful historic university towns of Oxford and Cambridge. Go further North and you’ve got the wonderful Scottish capital, Edinburgh (which I’m going to this weekend!) There are also some wonderful places to go hiking in England – the Seven Sisters country park is a short train journey from London. I did the day hike from Seaford to Eastbourne along the coast. It’s a wonderful day-long hike with some wonderful sights.

There are some wonderful things to see in the UK; it’s well worth taking some time to see it. And if you’re American, we’d love to have you in UK as our guests. Our economy could do with a bit more money! 😉

"Carbon cost" of Google search same as boiling a kettle

Google Lego 50th Anniversary Inspiration
Creative Commons License photo: manfrys

The BBC reports today on a study by Harvard physicist Alex Wissner-Gross. Wissner-Gross claims that performing a standard Google search on a desktop computer produces 7g of CO2. A quick session with two searches will produce 14g of CO2 – the same as that from boiling a kettle.

From the BBC article:

Although the American search engine is renowned for returning fast results, Dr Wissner-Gross says it can only do so because it uses several data banks at the same time.

Speaking to the BBC, he said a combination of clients, networks, servers and people’s home computers all added up to a lot of energy usage.

“Google isn’t any worse than any other data centre operator. If you want to supply really great and fast result, then that’s going to take extra energy to do so,” he said.

According to Google Web History, I’ve performed 9,308 Google searches and it’s only counted the searches I’ve performed whilst I was logged on.

I’m guesstimating I perform about 40 searches a day; that’s 15,000 Google searches per year (sounds scary when you put it like that). My annual Google carbon footprint would be 105kg of CO2 (0.15 tons).

Google have disputed this figure; saying that a search only produces 0.2g of CO2.

I’m not able to comment on what I think of the methodoly as I don’t know how either figure was reached. But I think it is important to point out the difference between average cost and fixed cost.

As an example, imagine a server farm which was responsible for 100g of CO2 emissions every day. If ten people perform searches, the average carbon cost of a search is 100g divided by 10 searches = 10g of CO2 per search. This is the average cost of the search.

Beijing smog
Creative Commons License photo: kevindooley

Whereas, the marginal cost would be the CO2 cost of performing one more search. If we then performed an 11th search, the CO2 emissions of the server farm stay the same (we assume it’s running with spare capacity). The marginal cost of performing a search of zero grams of CO2.

With eleven searches, you could claim each search had a carbon cost of 9g. But that’s a bit unfair – considering the CO2 output of the server farm if you had made the search and if you had not, you find the CO2 output it exactly the same. Your search had a marginal cost of zero grams of carbon.

Whether Wissner-Gross and Google stated the average cost or the marginal cost I don’t know (although I suspect the first may have been the average cost and the second the marginal cost).

With Google’s server farms, we know that they will be running regardless of whether we perform searches or not. The important thing then is the marginal cost of a search – this being so close to zero, I don’t think any of us should feel a guilty conscience from using Google.

Adding Facebook Connect to WordPress

motion gears -team force
Creative Commons License photo: ralphbijker

In June of last year, I demonstrated a proof of concept of using Facebook as an identity system for your blog. My proof of concept used the standard Facebook Application API as opposed to the Facebook Connect API (which didn’t exist back then).

The Facebook Application API is designed to be used for applications which live on In my proof of concept, I redirected the user to which “set up” the session before redirecting back to the blog.

The Facebook Connect API provides a much better experience for the user as it’s designed for integration with external sites.

For WordPress users, you can use WP-FBConnect to integrate Facebook into your blog today. It will integrate the user system of Facebook (i.e. your identity), profile pictures and news feed publication of comments.

Literally hot of the press (it’s been available for less than a week), I strongly recommend testing the plugin on a local WordPress install before making it available on your public blog. See the Facebook wiki for more info and Q&A about the plugin.

It seems like a fantastic idea to me to be able to use a Facebook identity around the web. My concern though is that, so far, I’ve kept my Facebook identity within people I know in real life and I hesitate about opening up my Facebook identity to the public on all kinds of random blogs and forums. Only time will tell if Facebook Connect will work well and whether people will be happy with the privacy aspects of it.

Google's New Favicon – Looks familiar…

Google announced a new favicon today:

Essentially the new icon consists of four corners of blue, red, green and yellow (Google’s four colours) with a white “g” overlayed on the top. It’s certainly much nicer than the old one and makes my bookmarks bar look a lot more colourful.

But some guys in the Google Blogoscoped forum pointed out that it looks very similar to the logos of Windows and AVG logos.

Microsoft Windows

This is the “Vista” variation of the Windows logo. We’ve got red-green-yellow-blue. Rotate this clockwise by 90 degrees, add a g on the top and you’ve got the Google favicon.

AVG Antivirus

This time, we rotate the AVG logo by 90 degrees anticlockwise and add a g to get the Google favicon.

I guess four coloured squares isn’t actually a particularly imaginative logo so it’s not hard to accidently “copy” it. I doubt the guys at Google even realised!

Microsoft Songsmith makes a song from your vocals

Creative Commons License photo: ValetheKid

Ever fancied writing a song but could never play an instrument?

Microsoft Research have released a programme called Songsmith. Songsmith records you singing into a computer microphone and automatically generates a musical melody to accompany it.

This is how Microsoft are marketing it:

Ever sing in the car? Maybe in the shower? You know who you are. Admit it, you like to sing, and you like music. Ever thought of writing your own music? Most people never get a chance to try… but we want to give everyone a piece of the songwriting experience, so we’ve developed Songsmith, an application that lets you create a complete song just by singing!

It’s a 98MB download. The free trial is fully-functional and lasts for six hours of use (measured as 6 hours whilst the program is running and active; not minimised). After that, it’s either 29 dollars or 29 euros to buy it.

What a cool programme!

Via Long Zheng.

The Facebook User 2.1billion Bug

We all remember the Y2K bug back in the millennium when the clocks changed from ’99 to ’00. The Y2K bug (although it never did really materialise) resulted from computer programmers storing years as two-digit numbers. 99 was the biggest possible value, and after that, the year reset itself to 00.

Creative Commons License photo: barnoid

A similar bug is the Year 2038 bug. In computing, times are often stored as the number of seconds which have passed since midnight on the 1st January 1970. This allows time to be stored as a single integer in computers. At the moment, times tend to be stored as 32-bit integers. For signed 32-bit integers, only values between −2,147,483,648 to +2,147,483,647 can be stored. Hence, computers with 32-bit times cannot store any date more than 2,147,483,647 seconds after 1st January 1970. That occurs on Tuesday, 19 January 2038. We’ve still got 29 years to prepare for that eventuality, but we’re going to see a bit of a taste of the 32-bit integer bug with Facebook soon.

Facebook user IDs are often stored as 32-bit integers – thats a problem when there are more than 2.1 billion users on Facebook. In a message to Facebook Application developers, Facebook wrote on their platform status page:

With the addition of features like internationalization and Facebook Connect, we have seen a significant increase in user growth and engagement. As a result of this growth, we’ll start to issue uids greater than 2^32 in a few months. We wanted to remind developers that uids should be stored using 64-bit integers, as documented at Since all current uids passed to applications are less than 2^32, developers may have inferred a 32-bit uid format. We are making this announcement so that any such developers have time to migrate code and databases before the first 64-bit uid is sent to applications.

Creative Commons License photo: cosmonautirussi

Essentially, we’re being warned that users who sign up to Facebook after the date which Facebook hits 2.1 billion could find themselves running into issues accessing sites and applications which integrate with Facebook. I’m not sure how close to 2.1 billion Facebook are – one of my friends who signed up a month or two ago had a user ID of 1.64 billion. I’m not sure how quickly Facebook is gaining users and when they’ll hit 2.1 billion but Facebook have told us developers that we need to upgrade our applications now to ensure that they work for everybody.

My User ID is in the range of 710 million which is still larger than 84% of my friends; indicating I was a bit late to Facebook. I don’t know of anybody with a user ID smaller than 500 million. I wonder if small Facebook IDs will become one of those future status symbols.

BBC announce 11th Doctor – Matt Smith [updated]

The BBC announced today that the 11th Doctor will be British Actor Matt Smith. He will replace David Tennant who will leave Doctor Who after four special episodes in 2009.


Smith did not go to Drama school but was a former member of the National Youth Theatre. His performance in The Master and Margarita secured him an agent leading on to his first professional performance in Fresh Kills opposite Christian Slater [3]. Further roles came as he appeared in On the Shore of the Wide World before then moving on with co-stars Thomas Morrison and Steven Webb to Alan Bennet‘s History Boys.

After History Boys he moved into television appearing in the BBC adaptations of The Ruby In The Smoke and The Shadow in the North alongside Billie Piper, then as Danny Foster in the BBC TV series Party Animals.

In January 2009, his casting was announced as the Eleventh Doctor in the long running BBC science fiction series Doctor Who, taking over from David Tennant in 2010.

It’s interesting to see what he has worked with Doctor Who alumni Billie Piper several times in the past.

From the BBC press release:

Matt Smith said of his new role “I’m just so excited about the journey that is in front of me. It’s a wonderful privilege and challenge that I hope I will thrive on. I feel proud and honoured to have been given this opportunity to join a team of people that has worked so tirelessly to make the show so thrilling.

“David Tennant has made the role his own, brilliantly with grace, talent and persistent dedication. I hope to learn from the standards set by him. The challenge for me is to do justice to the show’s illustrious past, my predecessors and most importantly to those who watch it. I really cannot wait.”

See his IMDB profile.

See the BBC press release.

Happy New Year!

happy new year 2008
Creative Commons License photo: mugley

So just to wish all of you a very happy new year and a big thank you for sticking with the blog over the last year. It’s been a very exciting year to be a blogger. 2008 was the year of the iPhone 3G and smartphones, the Facebook redesign, innovative new sites to obtain and listen to music, the US presidential election, the Beijing Olympics, the Large Hadron Collider… But it was also the year where we all felt the effects of a global recession and the credit crunch. With the dawn of the new year, it’s unlikely that we’ll see anything changing straight away – the first big change will probably be the inauguration of President Obama on January 20.

So let me go out on a limb and make a few predictions of what 2009 might be like…

  • I don’t think we’ll have much more action on climate change. Obviously the global recession means that governments don’t want to implement policies which could further harm the economy on the short term. But a new president in the US does offer a glimmer of hope. But given most scientists and governments now agree on the urgency for action, we could see some moves towards environmentally-friendly policies. I would like to be proved wrong on this prediction!
  • MySpace is gonna die out. Sorry, but MySpace is already on it’s last legs. Meanwhile, OpenSocial has made no inroads. Facebook will dominate social networking in 2009. Get used to it.
  • Internet services on the mobile phone are going to be a lot more popular. Smartphones make the internet much easier to use and I think the combination of the “social web” with mobile phones is a killer. 3G comes of age.
  • More people will buy netbooks. Netbooks are awesome and given so many things now live on the web, there really is no reason for many people to lug round heavy laptops with huge amounts of processing power. Meanwhile, laptops will make further roads into replacing desktops.
  • Better weather. Not a hard prediction to fulfill as 2008 was terrible…
  • We’ll see some light at the end of the tunnel for the global recession. I know economic analysts say the recession is likely to last through the whole of 2009 but I’m optimistic: I hope we’ll get over the worst of it in the first quarter of the year.
  • We’ll get some data in from CERN but nothing particularly exciting.
  • Google Docs & Spreadsheets won’t take off. It’s still nowhere near a viable replacement for Microsoft Office. And given the huge discounts Microsoft now sells Office at, it’s unlikely to get displaced by any free alternative either.
  • Dandelion Fireworks-PHOTO 183-The halfway mark
    Creative Commons License photo: aussiegall

    It’ll be a good year for Google Chrome which will gain in market share. Firefox will still be unrivaled as the best browser though, and some of the stuff going on at Mozilla is very, very exciting. Mozilla is one place to watch over the next year.

  • Twitter – I still don’t understand it, or see why people like it so much, but it’ll go from strength to strength. Maybe get gobbled up.
  • Microsoft Windows 7 info will be largely ignored and derided. The fact is, all of the exciting development work now happens on the web platform. Microsoft’s future is in consumer applications such as Office, Surface and so on.
  • Gordon Brown calls an election to take advantage of positive public perception of his economic policies. Fingers crossed!

All the best for 2009 and I hope you will continue to read the blog in the new year!