The telephone instrument is but a small part of the physical property used by a patron of a telephone system. Even the _entire_ group of property elements used by a patron in receiving telephone service represents much less than what really is his proportion of the service-rendering effort. What the patron receives is service and its value during a time depends largely on how much of it he uses in that time, and less on the number of telephones he can call.
_The cost of telephone service varies as the amount of use._ It is just, therefore, that the selling price should vary as the amount of use.
=Rates.= There are two general methods of charging for telephone service and of naming rates for this charge. These are called flat rates and measured-service rates. The latter are also known as message rates, because the message or conversation is the unit. Flat rates are those which are also known as rentals. The service furnished under flat rates is also known as unlimited service, for the reason that under it a patron pays the same amount each month and is entitled to hold as many conversations--send as many messages and make as many calls--as he wishes, without any additional payment. In the measured-service plan, the amount of payment in a month varies in some way with the amount of use, depending on the plan adopted. The patron may pay a fixed base amount per month, entitling him to have equipment for telephone service and to receive messages, but being required to pay, in addition to this base amount, a sum which is determined by the number of messages which he sends. Or he may pay a base amount per month and be entitled to have the equipment, to receive calls, and to send a certain number of messages, paying specifically in addition only for messages exceeding that certain number.
Whether flat rates or measured-service rates are practiced, the general tendency is to establish lower rates for service in homes than in business places. This is another recognition of the justice of graduating the rates in accordance with the amount of use.
=Units of Charging.= While both the flat-rate and the measured-rate methods of charging for unlimited and measured service are practiced in local exchanges, long-distance service universally is sold at message rates. The unit of message rates in long-distance service is time. The charge for a message between two points joined by long-distance lines usually is a certain sum for a conversation three minutes long plus a certain sum for each additional minute or fraction of a minute. In local service, the message-rate time charge per message takes less account of the time unit. The conversation is almost universally the unit in exchanges. Some managements restrict messages of multi-party lines to five minutes per conversation, because of the desire to avoid withholding the line from other parties upon it for too long periods. Service sold at public stations similarly is restricted as to time, even though the message be local to the exchange. Three to five minutes local conversation is sold generally for five cents in the United States. The time of the average local message, counting actual conversation time only, is one hundred seconds.