Will Capped Data Plans Kill the Cloud? 530
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.'"
Re:The only thing I care about it Netflix. (Score:2, Informative)
Off topic, but damn do I hate the new trend of chiclet keyboards on laptops. Typos up 800%.
Which would be great (Score:5, Informative)
If it were the truth, but it isn't. Plenty of other countries have caps. At least in the US the caps are usually not super low, so you can still do a reasonable bit of "cloud" type stuff and not hit them. Talk to the Australians, they have some pretty severe caps, enough they have to limits their regular Internet usage.
Caps are not a US thing. They are found in various places all around the world. They also aren't universal in the US. You can find non-capped Internet providers. Probably not in all areas, unfortunately, but they exist.
Re:Answer... (Score:5, Informative)
That's a patently false "answer": Australia and Canada are two countries with major providers that have caps.
Re:Will the Cloud Kill Capped Data? (Score:5, Informative)
You would think so. But sadly, we don't exist in a free market, as far as internet access is concerned.
There have already been several localities (municipal level) that tried to setup their own internet services for their residents, because they were unhappy with what the local cableco and telco were willing to provide. So the cableco and telco have sent lobbyists to the local city councils and state legislative bodies and are having laws written to prevent these forms of competition from even getting off the ground.
Even if another private entity, outside of the cable/phone companies wanted to try and provide internet access, I imagine they will run in to the same road blocks. Also, you need to get local approval to be able to run your wires on the utility poles.
I had hoped that Broadband-over-powerlines would allow a 3rd carrier in to most areas to help drive up speeds and drive down prices, but it hasn't been very successful and has run in to a whole slew of technical issues.
Wireless communication won't be able to keep up, in terms of speed and data caps. Getting in to the wireless business is a huge investment. RF Spectrum is very expensive and you can only physically push so much data through RF.
Sadly, except in a few small and isolated areas, I think we're going to be stuck with the cableco and telco duopolies for quite a while... The only way that is changing is if there are some pretty serious regulations at the federal and/or state levels to really allow for some good competition.
The only wildcards, and hope, that I see is Google's fiber initiatives and the corporate muscle flexing of some large companies. Once enough big companies like Google, Microsoft, Apple, Netflix, etc. want to start pushing their own high-speed services through the limited broadband pipes, they might be willing to spend some money on a state and federal level to lobby for some sanity.
Fixed, variable and opportunity costs (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 [wikipedia.org] 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 [wikipedia.org] 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.