Each participating product's initial monthly usage charge is determined as follows:

1. Once installed and enabled, the MVS™ usage measurement function collects the usage of each product for each hour of the day and reports this usage in SMF type 89 subtype 1 records.
2. After measuring product usage for two full months (for example, August 15 to October 14, inclusive), these usage records are passed to the usage report program, which produces a report that lists the measured usage for each product that reported its data. This program uses the following algorithm to report usage for this specific set of IBM® products:
   1. The usage measurement for the highest hour within the 24 hour day is kept as a reference hour.
   2. All the reference hours for the month are compared and the fourth highest reference value is chosen as the usage value listed on the report.

      Reporting the fourth highest value, instead of the highest value, eliminates high usage measurements from exceptional business or system conditions, such as latent demand after an on-line system restart in response to a hardware or software error.

   Note: The initial measurement for MULC users beginning before December 1, 1998 was one month in duration.
3. This initial measurement is used to set the monthly charge for the initial billing period, which may vary from 3 to 14 months in duration to allow for alignment (for example, with the fiscal year).
   Note: The initial billing period for MULC users beginning before December 1, 1998 can vary from 3 to only 8 months in duration.
4. The highest monthly usage measurement (determined as described in step 2) recorded in the initial billing period is used to set monthly charges for a second billing period. Thereafter, monthly charges for subsequent billing periods are based on the highest monthly usage measurement recorded in the prior twelve months.
   Note: Non-initial MULC billing periods beginning prior to January 1, 1999 are 6 months in duration. If you were using MULC with a 6–month billing period before January 1, 1999, you will migrate to 12–month billing periods when your final 6–month billing period ends. By July, 1999, all non-initial billing periods for usage pricing will be 12 months long.