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Will Capped Data Plans Kill the Cloud?

Posted by samzenpus on from the that's-enough-for-you dept.

theodp writes "With the introduction of its Chromebook, Google is betting big on the Cloud. As is Apple, with its iCloud initiative. So too are Netflix and Skype. Unfortunately, their very existence is threatened by data-capping carriers, who have set a course to make sure that the network is NOT the computer. 'I don't know what the solution is,' writes David Pogue. 'I don't know if anyone's thinking about this. But there are big changes coming. There are big forces about to shape our lives online. And at the moment, they're on a direct collision course.'"

6 of 530 comments (clear)

  1. Simple by Anonymous Coward · · Score: 5, Insightful

    The solution is taking the networks away from those who don't want to provide the service they promised to provide when they were given monopolies by the government.

    1. Re:Simple by GIL_Dude · · Score: 5, Interesting

      The solution is taking the networks away from those who don't want to provide the service they promised to provide when they were given monopolies by the government.

      Obviously your argument is simplistic. Now, we all know that it doesn't cost much (if anything) more to run a network running at 50% capacity than one running at 10%, so the straight up "utility" model like electricity or water billing doesn't exactly translate. However, it DOES cost more when you have to split out areas that are currently on one cable loop into two or more cable loops (as an example). So there absolutely is a cost to allowing usage to climb with no limit and no increased price. What the real solution has to be is some form of tiered service. Not a "aha! you went over your limit by 2 GB - you owe $100" type of gouging tier. More of a "all use between 0 and 150 GB per month you pay $0.10 per GB, for use between 150 and 300 GB per month you are billed at $0.15 per GB, and for usage over 300 GB per month you are billed at $0.20 per GB" type of deal. There would be a "connection / account maintenance" base fee (like a meter fee for electricity - for an example say $10), and any rental fees (if you rent your modem, etc.). The rest would be simple tiered usage based.

      With my admittedly pulled out of somewhere the sun doesn't shine sample numbers it would look like this:

      Use 80 GB per month: Base fee + 80 * $.10 = $18.
      Use 200 GB per month: Base fee + (150 * $0.10) + (50 * $0.15) = $32.50
      Use 400 GB per month: Base fee + (150 * $0.10) + (150 * $0.15) + (100 * $0.20) = $67.50

      Obviously those are just sample numbers, but they contain a penalty for using "a lot" of bandwidth. People can argue about whether there should be "night time GB" and "weekend GB" and all that - but the basics of pay as you go should really end up being the model for network usage.

    2. Re:Simple by Anonymous Coward · · Score: 5, Insightful

      If this does kill "The Cloud" can we go a whole week without a new story about it?

      Yes you can cluster computers together so that the individual identity/address of any particular node of the cluster is unimportant. Yes you can combine the resources of those nodes to increase computing power and availability. Can we all collectively get over this and end our eyes-glazed fascination with the subject now? It really is and should be a very simple thing to understand.

      Nope, gotta bend over and grab your ankles and say "please marketers, please ruin one more thing, please ravage me hard". So wait, we gotta come up with a term for it. We'll call it, "THE CLOUD" because that sounds mysterious and foggy and like something you can't see through so you wouldn't know what was inside it. That'll keep 'em at the edge of their seats, yeah. Thanks to previous marketing efforts they already think their PCs are magic boxes they could never understand anyway, so this will build on that mystery.

      The final step is crucial. We must obsessively expound this at every opportunity. It must be inserted into every conversation. Sure, you can upload a video to Youtube. But have you uploaded a video TO THE CLOUD (cue dramatic music)?! Yeah, you can set up a web server and serve up web pages, but have you made web pages and uploaded them TO THE CLOUD (dramatic music)?! Sure, Seti@Home and other projects (mostly about breaking encryption) demonstrated that distributed computing can process massive amounts of data... but have you hired Amazon so you could do this WITH THE CLOUD (music)?!

      It's fun to create a solution and then look for a problem to which it applies. And then mentioning it everywhere and inserting it into every conversation, like an evangelical who just discovered Jesus. Next time we do this can we keep it a secret from the marketers? The only way they ever seem to understand technology is to dumb it down.

  2. Answer... by girlintraining · · Score: 5, Insightful

    "Only in the United States, where caps are popular." But in truth, I'd be more concerned about unbrided capitalism and monopolistic practices killing not just the cloud, but any hope my country has of competing in a global marketplace. We've already hamstrung ourselves on an antiquidated patent and copyright system that is forcing our talent overseas to produce, we have our government busy chasing down music pirates while ignoring the massive amounts of identity theft and fraud perpetuated by malware and botnets, and the list goes on.

    --
    #fuckbeta #iamslashdot #dicemustdie
    1. Re:Answer... by causality · · Score: 5, Insightful

      But in truth, I'd be more concerned about unbrided capitalism and monopolistic practices,

      I guess I don't understand why capitalism is a dirty word around here. Isn't it a good thing that businesses are not run by the state? Does competition not spur innovation? Which economic system would you have in capitalism's place?

      The problem is that the ISPs were not built on a model of capitalism. They were built on state-funded and state-granted monopolies. Capitalism is not perfect and the model does have weaknesses. One such weakness is when the barrier to entry is astronomically high so that new players cannot independently enter into the market and compete with established players. It was precisely for this reason that the tremendous cost of running lines to each individual home had to be state funded.

      You cannot establish a monopoly with state money, suddenly decide to treat it as a purely capitalistic enterprise, and then expect healthy competition. This is doomed to fail simply because it is inconsistent with the nature of the situation. The reality is, we the taxpayers got these companies and systems off the ground and made their existence possible. We the taxpayers have a reasonable expectation that they behave in our interests. They are rightfully beholden to us and they have the option of changing careers if they don't like that.

      So far the best solution we have created is to let them operate as a private corporation that holds a monopoly with reasonable regulations to prevent them from exploiting the fact that they are a monopoly. This includes requiring them to lease lines in such a way that competitors can enter the market without digging up thousands of miles of land to lay down their own lines. Your other option is to have no competition at all. This system has weaknesses that are easier to overcome because they are political problems, not economic problems. The political problem is to keep the monopolies in check so that their interests don't override ours.

      But to talk about this as though it were a commodity like coffee, where any farmer can independently grow coffee and sell it on the open market and compete with the big boys, well that line of thought is getting us nowhere. It doesn't apply. It's a square peg that you're trying to drive into a round hole. This is a unique situation and the more general rules of capitalism only partially apply.

      --
      It is a miracle that curiosity survives formal education. - Einstein
  3. Fixed, variable and opportunity costs by sjbe · · Score: 5, Informative

    But there is no fixed cost for moving data around.

    What you are saying is more or less correct but your terminology is wrong. What you are describing is properly called a variable cost not a fixed cost. The equipment used to build and operate the network is largely comprised of fixed costs. It costs the phone company the same money whether they send one packet or one million packets. The costs associated to a specific packet would be variable costs and as you rightly point out, the direct variable costs are negligible. As equipment is used, the fixed costs get amortized over a large volume of data and in time become negligible on a per packet basis. This doesn't mean they become zero but they start large and become small asymptotically.

    That said there IS a cost that you are not considering. IF there is insufficient bandwidth available to serve all requests, then there is an opportunity cost associated with the data packet. If your data can't get through because someone else is hogging the pipe, you as a customer will get pissed and possible switch services (if possible). Since we know that the telecom providers have a large but finite amount of bandwidth available, opportunity costs matter. Hence data caps. They cannot serve all possible requests until their network has the capacity to do so. If they allow unlimited usage and people actually do use it that way (and some do), the telecom incurs an opportunity cost in the form of being unable to serve some of their customers.

    In THEORY data caps make economic sense. In REALITY, it's probably more greed by the telecoms than a real problem most of the time.