Dynamic pricing method and apparatus for communication systems

A communication system service billing arrangement is described that adapts to system loading in realtime. As system loading varies, one or more individual subscribers units (ISU) of a communication system are provided with realtime information on the current cost of the communication service. The system determines the locations of the ISUs and the current loading there between and calculates a calling rate based at least on the current loading. This calling rate is sent to at least one of the ISUs whose operator can choose to connect or not connect the call between the ISUs based on the current realtime variable rate.

FIELD OF THE INVENTION 
The present invention pertains to communication systems with dynamic 
pricing. 
BACKGROUND OF THE INVENTION 
Present communication system pricing methods rely on fixed, prepublished 
pricing based upon call duration, call distance, time of day and day of 
the week. Based on these parameters, the user can determine what the price 
per service will be prior to the placement of the call. The pricing matrix 
for local calls is generally given in the Telephone Books from the local 
service provider. The pricing matrix for a long distance call is based 
generally on the same parameters but with the call distance being a larger 
factor. The pricing matrix is of a fixed nature and changes infrequently. 
A feature generally found in long distance pricing structure is the 
practice that the cost rate for the call is based on the price structure 
of the one who originates the call. For example, in a call from Los 
Angeles, CA, where the time is 4:00 P.M. Pacific Standard Time, to New 
York, N.Y., where the time is 7:00 P.M. Eastern Standard Time, the cost of 
the call is based on the rate in effect in Los Angeles at the time of the 
call, which in this case is the more expensive daytime rate. If the call 
had originated in New York the cost of the call would be based on the 
evening rate, which is lower than the daytime rate. This type of fixed 
pricing matrix structure is well established. Its historical roots are a 
result of the generally fixed nature of the physical plant used to provide 
the service, that is, the wires and other transmission means have known 
physical locations. Calls are made from one fixed geographical location to 
another. Thus, the associated cost per service is easily calculated and 
published or otherwise available to the user of the service. 
Even with published rates there has been a need for callers to have a 
simple way to predict the cost of calls of different distance and 
duration, rather than merely waiting for the bill from the Phone Company. 
Apparatus for this is generally called a Telephone Call Metering device. 
U.S. Pat. No. 4,264,956, issued to John M. Delany and U.S. Pat. No. 
4,751,728, issued to John M. Treat and U.S. Pat. No. 4,122,308 issued to 
Gerald J. Weinberger et al; describe Telephone Call Metering devices. 
Various communication billing computation systems and the like are shown. 
These devices use or are based on the fixed published pricing matrix 
(described above). Typically, the user inputs the call distance (e.g. by 
Area Code) and call rate ($/min-Area Code) applicable for the time of day 
when the call is to be made, and the device calculates an estimate of the 
telephone charge depending on the call duration. 
With these arrangements the pricing parameters are loaded into the 
Telephone Call Metering Device by the user and not by the provider of 
service. A disadvantage of this is that as rates change due to regulatory 
or other actions, the Telephone Call Metering Device must be up-dated by 
the user or else the displayed costs will not be accurate. Or, if a call 
is made to a region not programmed then no costs can be displayed. The 
displayed costs are only an estimate of the actual cost based on the 
published cost matrix and the time-distance parameters at the time when 
the information is loaded into the Telephone Call Metering Device. 
Other Telephone Call Metering devices are those used with Pay-for-service 
telephones, or as they are generally called, "Pay Phones". Pay Phone 
systems indicate the basic charges for the call via aural or visual 
display means, so that the user can determine how much currency must be 
deposited before the provider of service will permit the call to be 
completed. In the case of a long distance call from a Pay Phone, the 
service is terminated after a fixed period of time unless the originating 
user deposits within the Pay Phone additional currency to keep the 
connection open. 
A difficulty with the above described approaches is that they do not take 
into account realtime demand for the service. Specifically, the fixed 
price matrix on which the call charge is based relies on an average 
time-of-day usage assumption and is changed only infrequently. Service 
charges to the user are not revised on a real time basis. With prior art 
systems, there is no mechanism for having the call service charge reflect 
the real time demand for the particular line or set of lines being used. 
The advent of cellular phone systems and in particular satellite and/or 
cellular telephone systems makes it highly desirable to have a service 
billing system that adapts to system loading in real time or nearly real 
time. The number of simultaneous user that such a system can handle is 
generally much smaller than with wire line service. This problem is 
especially severe with satellite cellular telephone systems. As system 
loading varies, it is highly desirable to simultaneously vary the rate 
structure. 
The nature of cellular telephone and data communication systems, especially 
satellite systems, creates a further problem in that users have little or 
no geographical restrictions on the locations in which they may place 
calls or receive calls. The old fixed price matrix method used with wire 
lines of fixed location or with terrestrial cellular systems of very 
limited geographical range are difficult to apply to satellite cellular 
telephone systems and large area terrestrial cellular systems. Currently, 
operators of the systems have no way of varying the rates in real time and 
users of said systems have no means of knowing the instantaneous rate 
prior to and during the placement of a call. 
As used herein the terms "telephone system" and "telephone service" are 
intended to include both voice and data transmission. 
SUMMARY OF THE INVENTION 
The foregoing and other problems are overcome and needs satisfied by a 
method for providing one or more individual subscriber units (ISU) of a 
communication system with realtime information on the cost of the 
communication service by determining the calling rate based on ISU 
location and system loading, sending the calling rate to one or more of 
the ISUs, and thereafter connecting or not connecting a call between the 
ISUs based on a response from the operator of the ISU. 
The forgoing and other problems are overcome and needs satisfied by 
apparatus for providing one or more ISUs of a communication system with 
realtime information on a current calling rate of a communication service. 
The apparatus comprises: means for determining a first location of a 
calling ISU and a second predicted or actual location of a called ISU; 
means for computing a current calling rate based in part on current 
realtime usage of the communication system for at least one of the first 
or second locations; means for sending said calling rate to one of the 
ISUs; and means for connecting or not connecting a call between the 
calling and called ISU based on a response from the operator of the 
calling or called ISUs. 
In a further embodiment, information on a realtime comlink loading 
dependent cost adder or cost multiplier for the local ISU comlink is sent 
to the ISU without it interrogating the communication system.

DESCRIPTION OF THE PREFERRED EMBODIMENT 
Referring to FIG. 1, a simplified block diagram illustrating a preferred 
embodiment of communication system 8 according to the present invention is 
shown. The operation of communication system 8 is illustrated as follows: 
call initiating user 10 enters into individual subscriber unit (ISU) 15 
via keypad 17 a number of another ISU 20 to which user 10 desires to be 
connected. The term "ISU" is intended to refer to any information or 
communication device or apparatus that may be used to communicate 
information, as for example but not limited to a telephone, a cellular 
telephone, a fax transceiver, a modem, a computer, or other communication 
means. 
ISU 15 transfers the desired telephone number being called via comlink 21 
to telephone system 30. The term "comlink" is intended to refer to any 
communication linking device or network that any user of the system may 
use to communicate information to telephone system 30, as for example but 
not limited to optical links, radio frequency links, wire lines, or other 
communication linking means. A comlink can usually handle many 
simultaneous communications but will have a maximum handling capability 
limited by its particular implementation. A wirebased comlink may serve 
hundreds of thousands of users while a satellite cellular based comlink 
may serve as few as a thousand. Telephone system 30 will generally 
interface with many comlinks. For ease of understanding when reference is 
made to an ISU using a comlink it is understood that the ISU may only be 
using a portion of the capacity of the comlink and that others may be 
using the comlink at the same time. 
Telephone system 30 computes the calling rate and transfers the rate 
information back to ISU 15 via comlink 21. The rate information is 
indicated to user 10, for example, via display 16 on ISU 15. A short tone 
is also desirably generated at earphone 18 of ISU 15 to alert user 10 to 
the arrival of the rate information. A flashing light or display 16 is 
also desirably visible on ISU 15 to alert user 10 to the arrival of the 
rate information. 
User 10 may read the displayed rate information and decide whether or not 
the call is affordable. If the answer is no, user 10 need do nothing and 
telephone system 30 will disconnect ISU 15 after a predetermined time or 
user 10 may hang up. The predetermined time may be selected by user 10 or 
telephone system 30 as a normal part of the communication service. 
If user 10 decides that the call is affordable then user 10 presses a 
"call" or other button on keypad 17. The button causes a signal to be sent 
via comlink 21 to telephone system 30 indicating that the call is desired 
to be connected. Telephone system 30 then places the call, via comlink 22 
and ISU 20, to user 11. 
As long as there is a connection from user 10 to user 11 via telephone 
system 30, telephone system 30, optionally, continues to update the rate 
information and transfer the rate information via comlink 21 to the 
originator and, optionally via comlink 22 to the receiver of the call. 
Depending on the option chosen by the user or the telephone system 
administrator (not shown), this may continue until one of the parties 
disconnects the call. This is desirable but not mandatory. Alternatively, 
rather than continuously updating the rate information displayed to one or 
both users, the system may be set to update the rate indicator at the ISU 
only when the rate exceeds a particular threshold amount. 
Sometimes user 10 will be the receiver of calls. For example, a call is 
placed by originating user 12 via ISU 26, wire line comlink 23, telephone 
system 30 and comlink 21 to ISU 15. The rate of the call may not be 
displayed on ISU 26. In this instance the rate for the call is not of 
interest to user 12 as the call will be connected if user 10 answers ISU 
15. 
Prior to user 10 answering the call user 10 may look at display 16 to see 
if the rate is acceptable. If it is not, then user 10 simply does not 
answer ISU 15. If the rate is acceptable, user 10 answers ISU 15 and 
telephone system 30 continues to update the rate information as before. 
User 12 may or may not be charged the dynamic rate for the call. ISU 26 
may not have means for indicating to user 12 the cost for the demand based 
service. In this situation, the cost for the dynamically based portion of 
service may be borne by user 10, who is aware of the rate being charged 
for the use of the service. 
Another form of ISU is computer 27. Computer 27 having a need to 
communicate with computer 28, transmits via comlink 24 the telephone 
number of computer 28 to telephone system 30. Telephone system 30 then 
computes the service rate and transmits this information back to computer 
27 via comlink 24. Should the rate fall within preprogrammed limits stored 
in memory accessible by computer 27, then computer 27 sends a signal to 
telephone system 30 to connect the call. Telephone system 30 desirably 
continues to update the rate for the call to computer 27 or computer 28 or 
both as long as the call is connected. 
In the case of a call originating from computer 28 and ending at computer 
27 the system indicates to computer 28 what the charge is for the use of 
comlink 24 and wire line comlink 25, and then computer 28 can make a 
decision of whether to connect the call. When only one of the comlinks is 
a rate variable link, the computer at either or both ends may be informed 
of the rate of the call before the placement of the call and during the 
call. The benefit is where a portable computer (e.g. computer 27) is 
communicating with the home office computer (e.g. computer 28) then either 
or both computers can make a determination of what rate is acceptable. 
Either computer can poll the telephone system 30 to determine when the 
rate for service is at a level where the system can be utilized according 
to the guidelines programmed within the respective computers and cause 
such calls to be initiated. In addition, in the middle of a communication, 
should the rate rise above the preset range, the call can be terminated 
and later reconnected when rates are lower. It is also possible to print 
the rate and other information on a printer (not shown) that could be part 
of computer 27 or 28. 
A method and means for locating the originating and/or receiving ISU is 
provided so that telephone system 30 can compute the correct rate. Many 
ISUs are very easily located as they are part of the fixed wire telephone 
system and the telephone number indicates the location of the ISU. For the 
ISUs that are not tied to a fixed location the telephone number alone does 
not identify the ISU location. There are a number of well known locating 
arrangements, as for example, by use of the cell location if the ISU is 
within a limited range cellular system or by use of a global positioning 
system (GPS) or a combination thereof. GPS is a commonly known means of 
accurately pinpointing the location of a GPS receiver utilizing one or 
more satellites. 
ISU 15 or 20 using comlink 21 or 22 incorporates geolocation apparatus and 
is capable of being located by telephone system 30 or capable of 
self-location and transferring such self-location information to telephone 
system 30. Alternatively, for cell based systems, the presence of an ISU 
within a cell may be sufficient geolocation information. In the latter 
situation telephone system 30 knows which cell contains the ISU without 
the ISU having to have any internal geolocation capability. 
FIG. 2 is a block diagram of telephone system 30 of FIG. 1 in more detail. 
Referring to FIG. 2, a preferred method for determining rates is 
described. However, this is intended for convenience of explanation and is 
not meant to be limiting. 
Assume ISU 15 utilizes comlink 21 to originate a call. ISU 15 communicates 
the desired connection number to telephone system 30. Telephone system 30 
comprises utilization analyzer 31, billing computer 32, routing system 33 
and location tracker 34. These may exist as separate defined hardware 
modules or as functions created by software programming of a general or 
special purpose computer or a combination thereof. 
When telephone system 30 receives from ISU 15 the desired connection 
number, i.e. the phone number of the ISU being called, it also receives or 
determines information concerning the geolocation of both ISU 15 and the 
ISU being called. The geolocation may come, for example, from a GPS 
receiver built into the ISU or by identifying the cell containing the ISU 
or, should the ISU be of a fixed wire nature, by the area code. Location 
tracker 34 of telephone system 30 determines the actual locations of the 
originating caller and the destination being called, computes the 
separation distance (e.g.Km) and transfers distance information or 
equivalent to billing computer 32 via link 37 and the location 
information, via link 35, to utilization analyzer 31. The location tracker 
can be implemented using a general purpose computer programmed, for 
example, to compute the distance between locations using a curved surface 
algorithm. The location tracker computer memory can easily store the known 
location of the wire lines and the computer can compute the location of 
the mobile ISU or can be informed of the ISUs' location by the ISUs' 
self-geolocation capability. 
Utilization analyzer 31 is conveniently a general purpose computer 
programmed to monitor the capacity usage of the comlink network and the 
routing system 33. It determines the amount of capacity being utilized at 
the time of the call. If the call is to ISU 20 utilizing comlink 22 then 
utilization analyzer 31 may consider the loading of comlink 22 as well as 
loading of comlink 21 and convey a composite loading to billing computer 
32 via link 36. Computer systems for monitoring communication system 
loading are well known in the art and used, for example, by long distance 
carriers to determine the manner in which traffic should be routed in 
order to provide the maximum system utility. 
Billing computer 32, comprising both hardware and software, is of the type 
normally used in existing cellular and other telephone system but with 
additional modifications so as to: (1) notify the user or others of the 
realtime, current billing or calling rate; (2) allow the billing or 
calling rate to be variable; (3) allow the users to decide based on 
current rate information, if the call is to be placed or accepted; and (4) 
update the billing rate and notify the user on an ongoing basis. Billing 
computer 32 computes a rate (e.g.$ per Minute) for the call based, for 
example, on the distance and current system loading. 
Once billing computer 32 has computed the rate to charge, this information 
is sent back to ISU 15 over comlink 21. The user (e.g. a person or 
computer) at ISU 15 makes a decision as to the cost/benefit of the call 
and, if the rate is acceptable, presses a "call" button on the keypad 17 
of ISU 15 or makes an equivalent signal. This response is conveyed via 
comlink 21 to billing computer 32 which in turn commands routing system 33 
to connect the call. Routing system 33 is similar to the type currently in 
use by the long distance carriers and the cellular telephone providers. 
While the call is in progress, location tracker 34 continues to track the 
geolocation of the ISUs. This is important as one or both ISUs may be 
moving and may enter locations with a different capacity e.g. having a 
different comlink. Should the ISUs move to different regions such that the 
capacity or loading of comlink 21 or 22 changes, information of this 
change is conveyed to utilization analyzer 31 via link 35. This moving of 
ISUs into different comlinks is a particular problem in the existing fixed 
price cellular systems as the handoff between cells, or comlinks as they 
are called herein, does not always occur due to some comlinks being at 
maximum utilization. The utilization analyzer 31 continually monitors the 
capacity of comlinks 21 and 22 and conveys changes in capacity utilization 
to the billing computer 32. When the capacity utilization changes, billing 
computer 32 recomputes the rate. When the rate changes, billing computer 
32 notifies the users via comlink 21 and/or comlink 22 of the new rate. 
This process continues until the call is terminated. The frequency with 
which rate information is updated to the user is usefully in the range of 
once every thirty seconds to once every hour, preferably about once every 
forty-five seconds to once every five minutes, and more typically about 
once a minute. Further, the update frequency may increase as the rate 
and/or rate of change of the rate increases and decrease as the rate 
and/or rate of change of the rate decreases. 
If the call is to a fixed location, e.g. a terrestrial wire telephone 
exchange and wired subscriber unit, utilization analyzer 31 need only 
analyze the loading of comlink 21 and convey this information to billing 
computer 32 via link 36. Alternatively should a "conference call" to or 
between more than two ISU's simultaneously be desired the Utilization 
analyzer may need to analyze every comlink and compute a composite 
loading. Loading is the amount of communication capacity being used at 
that time between the calling and called locations. 
FIG. 3 shows a simplified flow diagram of the process that occurs in 
telephone system 30. The process starts with block 40 when a user enters a 
number to be called into the ISU. 
The origination and destination information is transferred, as indicated by 
arrow 41, to block 42 where the telephone system determines the rate in 
effect at that time based on loading between the originating and 
destination locations of the call. The system loading information is 
generated by utilization analyzer 31 of telephone system 30. The distance 
of the call is also determined from information provided by location 
tracker 34. Utilizing this information the rate of the call (e.g.,$ per 
minute) is calculated by billing computer 32 of telephone system 30. 
The rate is transferred, as indicated by arrow 43, back to the users' ISU, 
in block 44 where the rate (e.g.,$ per minute) is displayed to the user. 
In block 45 the user makes a determination of whether to initiate the call 
based on the rate presented. Should the user decide that the call is too 
expensive, as shown by arrow 47, the user merely hangs up, as in block 57. 
When the user hangs up, as indicated by block 57, telephone system 30 
terminates the call, as indicated by block 58. At this point the process 
ends, i.e. block 59. 
Should the user determine that the rate of the call is acceptable then the 
user acknowledges acceptance, as indicated by arrow 46 to block 48. Block 
48 causes the ISU to notify telephone system 30 that the call is to be 
connected. Telephone system 30 then connects the call, as in block 49. 
While the user communicates as indicated in block 50, various actions are 
occurring in telephone system 30, as shown by block 51. Utilization 
analyzer 31 continues to monitor the system loading. When a change in the 
loading occurs, new system loading information is passed to billing system 
32 which determines a new rate for the service and transmits the new rate 
back to the users' ISU. The rate is indicated to the user via the ISU as 
shown in block 52. 
In block 53, the user makes a determination of whether to continue the call 
based on the indicated rate or may choose to ignore the rate entirely. 
Should the user decide that the rate is no longer cost effective, as 
indicated by arrow 47', then the user merely hangs up as shown in block 
57. When the user hangs up, i.e. block 57, the telephone system 30 
terminates the call, as shown by block 58. At this point the process ends, 
as shown by block 59. Should the user choose to continue, as indicated by 
arrow 54, the user merely continues to use the ISU, as shown by block 55. 
At this point the process from block 51 thru block 55 repeat at intervals 
determined, for example, by telephone system 30. Arrow 60 shows the path 
from block 55 to block 51. 
When the user completes the call, i.e., block 56, then the user hangs up, 
block 57. When the user hangs up in block 57, telephone system 30 
terminates the call in block 58. At this point the process ends in block 
59. 
In a preferred implementation the call rate is composed of a base fee for 
long distance access plus or times a charge that is based preferably on 
the distance and loading, where loading is a number arrived at by 
analyzing the communication system capacity utilization at one or both 
ends of the call and/or in between. That is, for a call placed from a low 
demand area to a low demand area the call will have low loading and thus 
have a minimal rate. For a call placed from a low demand area to a high 
demand area then the loading will be substantial and, thus, the rate of 
the call will be higher. For a call from a high demand area to a low 
demand area then the loading will also be substantial and, thus, the rate 
of the call will also be higher. For the call placed from a high demand 
area to another or the same high demand area the loading will be even 
greater and thus the rate will be still higher. The intent of the loading 
variable rate is to encourage the use of the services in non-peak usage 
periods in realtime. This is accomplished by providing lower realtime 
rates when loading is small and by higher realtime rates discouraging use 
of the system when the communication systems capacity is at or near 
maximum utilization. 
The user of the service is desirably provided with the cost of the service 
(i.e. the call rate) in realtime just prior to and, optionally, during the 
call. This feature whereby the user knows the charge rate for the call in 
realtime provides various other benefits as well. 
For example, the users' ISU can be set to automatically poll the 
communication system and place a call when the rate falls below a first 
predetermined rate or to terminate the call when the rate exceeded a 
second predetermined rate. In addition, the user of the services can have 
an immediate billing for the services should they so desire. The latter 
would be of immediate use in connection with pay telephones. Communication 
systems as currently implemented do not allow for the most efficient use 
of the equipment. During periods of heavy use not all users may be able to 
complete their calls. Further the prior art does not provide a means to 
dynamically change prices to encourage the use of the service when demand 
is low nor are there means for the user to determine the availability of 
the service nor make a choice on rates. These problems are overcome by the 
present invention. 
In a further embodiment the loading sensitive rate may be divided into, for 
example, two components of charges, a first charging rate or premium for 
use of the local comlink depending on the system and/or local comlink 
loading and a second charging rate based on the usual calling distance and 
time parameters. The first rate may be an adder or a rate multiplier. The 
second rate can be substantially independent of the loading dependent 
rate. This formulation of the rate avoids the ISU having to poll or call 
the telephone system to determine the loading dependent parameters. 
For example, the rate for local comlink 21 is constantly or periodically 
broadcast using an available paging channel of communication system 8 or 
during unoccupied signalling segments of, for example, a time multiplexed 
signal. Thus, user 10 of ISU 15 would merely turn ISU 15 on and display 16 
would display the current rate for use of local comlink 21 or other 
capacity limited portions of the system. The arrival of the rate may be 
indicated by an annunciator, e.g., a flashing light and/or an audible 
tone. User 10 may read the displayed rate and decide whether or not the 
adder or multiplier for the capacity limited portions of the system, e.g., 
the local comlink, is affordable. If the answer is no, user 10 does 
nothing. The ISU continues to receive the rate and display the updated 
rate as long as it is on. If user 10 decides that the local comlink input 
rate is affordable then user 10 enters the desired connection number on 
keypad 17 and the system calculates the total call rate based on the 
location being called, as has been previously described, and, after user 
approval, connects the call in the manner described earlier. It is easily 
seen that user 10 could just as easily be computer 27 with the appropriate 
programming. 
Having thus described the present invention, it is apparent that the 
present invention provides a method and means whereby the user of the 
communication service is informed of the realtime, loading variable 
costing rate or cost premium of telephone communication service 
immediately prior to and optionally, also during a call. The costing rate 
or cost premium is dependent on the demand for service at that particular 
time for the caller or the receiver or both, depending on the 
circumstances. 
While the invention is described with specific preferred embodiments, it is 
evident that many alternatives and variations will be apparent to those 
skilled in the art based on the description herein. More specifically the 
invention has been described for a particular satellite communication 
method, although the method is directly applicable to other communication 
systems, as well as to automated data communication systems and other 
personal communication devices.