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Tuesday, April 11, 2006

Price Discrimination in Buenos Aires
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Wanting to be able to check in, however briefly, with loved ones while in South America, I went online before the trip and found a Buenos Aires company that rents cell phones by the week. They e-mailed me an online special that was really quite inexpensive. They told me to call them from my hotel when I arrived in Buenos Aires and they'd send someone over with the phone.

When I called from the hotel, the salesman quoted me a rate three times higher than my e-mail quote. When I noted that, he said 'Oh, I didn't know you had the e-mail quote. Yes, that will be your rate. We have a higher rate for people who call us directly from the hotel rather than finding us online."

A businessman on a big expense budget isn't going to spend time researching phone rates; he's going to have the concierge at the hotel call a local vendor, and he'll pay whatever rate is offered. I would not have rented the phone under the hotel rate, but I was happy to rent it at the lower, e-mail rate. The businessman, the phone company, and the budget hunter (me) are all happy.

So it would appear that the cell phone rental market in Buenos Aires is two-tiered, as the vendor attempts to find the perfect price for different customers; note the service for both customers is exactly the same. I would ask proponents of net neutrality legislation - should this price discrimination on a communications network be banned as well?

posted by Patrick Ross @ 5:25 PM | Digital Americas , Net Neutrality

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