Derek Kerton 's Techdirt Comments

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• On the post: The Stupidity Of Data Caps: No One Knows What A Megabyte Is

  

  Derek Kerton ( profile ), 16 Apr, 2012 @ 02:44pm

  Re: Re: Re: Re: Nobody Needs To Know

  I'm not sure there is an incentive to deliberately make crappy metering tools. I think that is just what telcos initially produce.
  
  I think they lose as a result, because ill-will is generated. If they handled caps better, there would be much less ill-will, and that's good for business.
  
  That's why I think they are just clumsy about their meters, and not malicious.

• On the post: The Stupidity Of Data Caps: No One Knows What A Megabyte Is

  

  Derek Kerton ( profile ), 16 Apr, 2012 @ 02:41pm

  Re: Re: Re: Re: Nobody Needs To Know

  So you are proposing a much more precise market, where bits are priced based on up-to-the-second real time value resulting from the supply and demand of the users in that sector or Central Office?
  
  Yeah, that would be way simpler. Let's start an ISP that offers that to consumers.
  
  And if users trickle their data for a few Central Offices such that bits are what you consider "free", we will get no revenue and pay our business expenses with lulz.
  
  I think the notion of tiers, caps, meters are a simplification, but a better way to get subscribers to be aware that there is a cost to provide additional data.

• On the post: The Stupidity Of Data Caps: No One Knows What A Megabyte Is

  

  Derek Kerton ( profile ), 16 Apr, 2012 @ 02:37pm

  Re: Re: Re: Re: Nobody Needs To Know

  Because you FEEL it.
  
  The $19 B is for network, not buildings. I don't know how they fudge their accounting, so don't expect me to vouch for it. But the SEC signed off on it.
  
  Here, let me Google that for you:
  
  http://www.fox19.com/story/17211139/att-invests-more-than-23-billion-in-dallas-fort-worth-from-2009-through-2011-to-improve-local-networks
  
  http://philly.citybizlist.com/2/2011/3/18/ATT-Invests-19B-in-New-Jersey-Network.aspx

• On the post: The Stupidity Of Data Caps: No One Knows What A Megabyte Is

  

  Derek Kerton ( profile ), 16 Apr, 2012 @ 02:35pm

  Re: Re: Re: Re: Nobody Needs To Know

  Peaks have largely been flattened in recent years (for mobile data).
  
  People have different billing cycles, so, no.

• On the post: The Stupidity Of Data Caps: No One Knows What A Megabyte Is

  

  Derek Kerton ( profile ), 16 Apr, 2012 @ 02:34pm

  Re: Re: Re: Re: Nobody Needs To Know

  Very useful graph of time-of-day cellular data traffic
  
  http://www.senzafiliconsulting.com/Blog/tabid/64/articleType/ArticleView/articleId/68/Managing-data-traffic-in-real-time-down-at-the-cell-level.aspx
  
  I think this graph will reveal a flatter usage pattern than most of you assume. If you've ever seen the classic cellular voice graph, you'll notice the peaks and valleys are VERY flattened in this modern data traffic map.
  
  What's happening is that people's phones are consuming data in the background, and at set intervals. They are not just using them during their commute, like they used to. And people are using data on their phones all day long, at work because it is outside the company firewall, at home because it is in addition to their TV.
  
  more:
  http://finance.yahoo.com/news/research-shows-excess-mobile-bandwidth-110000717.html

• On the post: The Stupidity Of Data Caps: No One Knows What A Megabyte Is

  

  Derek Kerton ( profile ), 16 Apr, 2012 @ 02:26pm

  Re: Re: Re: Re: Nobody Needs To Know

  Some wireless carriers worldwide are doing exactly what you propose.

• On the post: The Stupidity Of Data Caps: No One Knows What A Megabyte Is

  

  Derek Kerton ( profile ), 16 Apr, 2012 @ 02:24pm

  Re: Re: Re: Re: Nobody Needs To Know

  You, like a dozen or so others here, don't understand the difference between the cost of data in a static demand world, versus the cost of data in a world where the demand for data is ever-increasing.
  
  In our world (the second of the two) ISPs must constantly upgrade and invest to provide new capacity to meet new demand. That costs money. Money is scarce.
  
  So, you can choose: 1) cap people's usage to limit the amount of money; or 2) ask for more money to build out more capacity.
  
  The ISPs have guessed that 1 would be 'less unpopular' than 2. Although, they also offer 2, by way of higher plans, overages, or enterprise-grade plans.
  
  I'll say it again: if you are willing to consumer the same amount of data as you did in 2000, then your bits have near-zero marginal cost, and your argument is good.
  
  And yes, I've worked in the field of telecom. Nothing but, in fact. That and my econ degree from a country that also calls electricity "hydro".

• On the post: The Stupidity Of Data Caps: No One Knows What A Megabyte Is

  

  Derek Kerton ( profile ), 16 Apr, 2012 @ 02:17pm

  Re: Re: Re: Re: Nobody Needs To Know

  Not scarce: old, existing telecom networks
  
  Scarce: new, faster, more capacity telecom networks.
  
  If you are content connecting by dial-up to AOL, then I will accept your argument that your bits cost almost nothing to provide.
  
  If, however, you want to stream a youtube video once or twice, then you will have to accept that the capacity to serve customers like you is scarce at some point in time, and must be built, at a cost, to meet your demand.
  
  With data demand constantly shifting to the right, supply must constantly build new capacity. There is scarcity right there, my friend.
  
  For I am rubber, and you are glue. It is your comprehension that is analogous with a bridge to nowhere.

• On the post: The Stupidity Of Data Caps: No One Knows What A Megabyte Is

  

  Derek Kerton ( profile ), 16 Apr, 2012 @ 02:08pm

  Re: Data caps harm economies & education

  You don't understand how they provide tv versus how they provide data.
  
  Most of your cable TV is broadcast on the wire, so that thousands of homes can use the signal.
  
  Pay-per-view is different, which is why it is more limited, and often for a fee.
  
  Your Internet is unicast, just to you. Bits you use cannot be shared by your neighbors. This costs more.
  
  And yes, they are also money grubbers. But get your facts straight if you want to complain.

• On the post: The Stupidity Of Data Caps: No One Knows What A Megabyte Is

  

  Derek Kerton ( profile ), 16 Apr, 2012 @ 02:07pm

  Re: It won't stop until it costs them money...

  "The carriers think that everyone will just shell out more money for a higher cap"
  
  No. They want him to change the way he uses it. And if he is unwilling, because video over LTE is the only thing he wants it for, then yes, cancel his subscription.
  
  Some will quit, some will change. Lots of iPad users were just using the video for a whim, to try it out. When they learned that it ate up their allotment, they simply reduced their video consumption. That is the law of supply and demand working.
  
  Here's some analyst on Bloomberg TV talking exactly about the issue of iPad users hitting the cap in the first week:
  
  http://www.bloomberg.com/video/88755634/
  
  He makes some interesting points, but you know analysts. They just make it up as they go.

• On the post: The Stupidity Of Data Caps: No One Knows What A Megabyte Is

  

  Derek Kerton ( profile ), 16 Apr, 2012 @ 02:02pm

  Re:

  True.
  
  But you can do oversight. You can install a meter in your phone. Just look into the app store by apps by a company called Mobidia.
  
  Anyway, you won't like what you find. Your count will almost always be lower than the telcos count, because they include some overhead that doesn't get captured by the in-phone meter.
  
  So, you're right.

• On the post: The Stupidity Of Data Caps: No One Knows What A Megabyte Is

  

  Derek Kerton ( profile ), 16 Apr, 2012 @ 02:00pm

  Re: Caps

  "Bandwidth is not a resource that you use and then it is gone. It is always there whether it is currently in use or not."
  
  That's almost true of any existing system capacity (which still requires some cost for maintenance, energy, staffing). Let's just agree that Marginal Costs are near zero for existing system capacity.
  
  So, then, you can pay the same amount, so long as you only use the Internet for the same things you used it for in the year 2000 and nothing else.
  
  If, however you want MORE capacity, and more bandwidth to do more things, then that is a long, long way from free my friend. That costs billions and billions of dollars in capital expenditures every year.
  
  The "bits are free" argument shows a half-comprehension of the subject.

• On the post: The Stupidity Of Data Caps: No One Knows What A Megabyte Is

  

  Derek Kerton ( profile ), 16 Apr, 2012 @ 01:56pm

  Re: Re: The reason for limits is simple:

  Your argument that peak loads are critical to planning and capacity management is correct.
  
  But it's freaking impossible to tell customers where/when to use data, and when not to. It's freaking impossible to tell them that data is more expensive for these hours, not those hours, etc. So, caps are a blunt took to reduce the peaks. It also puts that "cognitive load" that Masnick talks about...and that's a good thing. Consumers that are forced to recognize that bandwidth isn't free will start being more selective about the apps they install and their use of data. This will reduce peak demand.
  
  Also, you may not be fully aware that the peak load patterns have changed dramatically the past decade. In the cellular world, rush-hour commute times used to be the busiest by far for mobile voice. Data started on a similar schedule, but now, data use has flattened out a great deal. This is because much of the aggregate use is background connections by apps, and associated signaling traffic. Mobile video use also takes place all day, not specifically during commutes.

• On the post: The Stupidity Of Data Caps: No One Knows What A Megabyte Is

  

  Derek Kerton ( profile ), 16 Apr, 2012 @ 01:48pm

  Re: Re: Nobody Needs To Know

  Yes. The current usage meters suck. They are embarassingly bad tools, that don't meet my definition of a usage meter. As provided by ISPs and cellular companies, they are "estimates of how much you used up until last night...but don't hold us to it." Meters. Almost useless.
  
  I make no apologies for telcos and ISPs sucking. But I believe that caps are not to blame for lousy implementations of caps. No ISP should implement a metered solution until they can provide working, real-time usage meters and reliable outbound warnings.
  
  As for the "bigger issue" of the cognitive load: tough shit. I don't get you're blind spot on this. Usually, you apply economic models to all arguments. Why not on this one?
  
  It is not the job of suppliers of Oranges to enable the innovative use of oranges without any cognitive load. Oranges are scarce, they cost money. If people use more, they must consider the cost of their increased use of oranges. Think of all the orange-based paint, scent, and insecticide solutions we'll never see because oranges have a cost. But isn't that just supply and demand at work?
  
  Also, there would be a lot of innovative users for flash memory, if it just were free. But it's not. So think of all the lost inventions we'll never see using free flash memory. But c'est la vie, right? We don't complain that the flash makers don't offer an "unlimited" plan for buying their memory. Why are data suppliers held to some other standard?
  
  Cuz we likes our Interwebz? Not a good enough reason to throw the law of supply and demand out the window.
  
  And as I argued in prior comments, bandwidth IS a scarce demand. The cost per bit is not free. Not even close. This is because demand keeps growing. So we are not talking about an old, fully amortized physical network with steady data traffic. We are talking about carriers facing a demand tsunami, and needing to invest Billions upgrading their networks and devices to handle it. Customers, of course, are the ones who end up paying. Now, the ISPs are asking people, through their pricing: "If you use more, please either contain your usage, or pay more so we can build more capacity for users like you." Of all the crappy things, false arguments, and cash grabs I see carriers to, this is just one one of them.
  
  Before 2004, you and I complained that plans marketed as "unlimited" were, in fact, limited. The carriers switched gears a little, and now sell plans as "limited" with caps. I think this is, finally, honest. You are still angry about it.
  
  OK, the cognitive load is a pain. I know it. I feel it too, especially on international travel where they really rob you. But that cognitive load you feel is just the reality of needing to correctly allocate scarce resources, i.e. economics. And usually you can spot that kind of thing. You don't complain here about the cognitive load when you go to the store and buy hundreds of other scarce goods. Why just this one?

• On the post: The Stupidity Of Data Caps: No One Knows What A Megabyte Is

  

  Derek Kerton ( profile ), 16 Apr, 2012 @ 01:34pm

  Re: Re: Nobody Needs To Know

  If you assume that the meter works like crap, and is not granular enough, and is not real-time, then yes, you are correct.
  
  Sadly. You are correct. This is the way most celcos and ISP meters currently work - they are not real-time and the ISPs have to weasel out of the meter information "these data are just indications, represent estimated usage at midnight last night, etc. etc."
  
  I make no apologies for telcos and ISPs sucking. But I believe that caps are not to blame for lousy implementations of caps. No ISP should implement a metered solution until they can provide working, real-time usage meters and reliable outbound warnings.

• On the post: The Stupidity Of Data Caps: No One Knows What A Megabyte Is

  

  Derek Kerton ( profile ), 16 Apr, 2012 @ 01:29pm

  Re: Re: Nobody Needs To Know

  My second reply to your weak arguments are:
  
  I never suggested there is no value in learning what a MB is. I just said there is no NEED.
  
  Just as there is value in knowing what a pound of steak looks like when you go to the butcher, or what a gram of coke looks like when you go to your pusher. Knowledge is power, and people who know more will do a better job of planning their use of products and services, and how they spend their money.
  
  But charts, graphs, and pro-active notification about caps can go a long way towards helping ISP customers understand their consumption without ever NEEDING them to understand what a MB is. And you know, what? Little by little, some of them will learn what a MB is.
  
  When you were four, did you know how much candy you could buy for a dollar? Nope. But you bought candy a few times, and you learned, right? Masnick's article falsely assumes that people MUST know what a MB is, then also falsely assumes that people won't learn.
  
  PS, I've been debating him for about 9 years on this subject. It's one of the few on which we disagree.

• On the post: The Stupidity Of Data Caps: No One Knows What A Megabyte Is

  

  Derek Kerton ( profile ), 16 Apr, 2012 @ 01:24pm

  Re: Re: Nobody Needs To Know

  Have you any knowledge of Peak Load Economics?
  
  Nobody, never, ever, ever, would build a network to handle the peak load, as you suggest with lolcats at noon. That investment is then wasted all the rest of the day.
  
  Look at highways that are congested at rush hour.
  Phone networks that are jammed during emergencies.
  Generators that are sold out at Home Depot during power outages.
  Power outages during the hottest days of summer.
  
  The ISPs could build a network to handle those spikes. Do you really want them to? OK, your monthly ISP bill will be $500, as it is for enterprise customers who want guaranteed service levels. Enjoy.

• On the post: The Stupidity Of Data Caps: No One Knows What A Megabyte Is

  

  Derek Kerton ( profile ), 16 Apr, 2012 @ 01:20pm

  Re: Re: Nobody Needs To Know

  Well, whatever the speed is, it's gonna be arbitrary, right? So, I take a stab and say 164Kbps. You could say something else. It could change over time. The key, for me, is that it is not overly "punitive", as AT&T's wireless caps proved to be. You notice it, it prevents the most data hungry of services (streaming media) but it doesn't affect most data services.
  
  I picked that number simply because:
  - users will feel it, but it is not overly punitive
  - you can still do VoIP
  - you can still Tweet, E911 GPS locate yourself, Facebook, mediocre web browse, check-in, Google Map, traffic update, health monitor, etc... Hundreds of thousands of apps still will work.
  - you will have a hard time streaming video, and perhaps audio
  
  But you will notice the throttle if you are the kind of heavy user who hits your cap, and you will either have to buy up to a higher tier, tolerate the throttle, or alter your usage pattern.
  
  That is an effort to constrain an every-growing demand. Yes, it limits people. That's what it is intended to do. You can pay more for more, or be limited at the price you pay. I've wrote it above already, but it is the law of supply and demand in action. It's not personal, just econ.

• On the post: The Stupidity Of Data Caps: No One Knows What A Megabyte Is

  

  Derek Kerton ( profile ), 16 Apr, 2012 @ 01:13pm

  Re: Re: Nobody Needs To Know

  "Data is different than other utilities as it is an infinite commodity."
  
  A common notion among tech-savvy, heavy Internet users, and one promoted by my friend here, Masnick. Also one I think is patently incorrect.
  
  I see AT&T (make fun of them at will) investing $19 Billion per year on network improvements, all for the goal of increasing capacity. I, thus, find it hard to accept the argument that capacity is free.
  
  A bit on a deployed network has a marginal cost that approaches zero. This is true. And this is where your misunderstanding takes root.
  
  That "Bits are free" argument would be fine...so long as you are satisfied using a dial-up connection to log into "the Well" to share ideas with your buddies, and use your Pine email client or AOL to sent email to your friends.
  
  If, however, your Internet needs have changed, and your demand for bandwidth has increased over the years, then the bits are not free. You are demanding increased capacity, and that, my friends, cost billions.

• On the post: The Stupidity Of Data Caps: No One Knows What A Megabyte Is

  

  Derek Kerton ( profile ), 16 Apr, 2012 @ 01:09pm

  Re: Re: Nobody Needs To Know

  Fair enough. I never said carriers or ISPs should lie. When they say "unlimited", it should @#$@#-well be unlimited.
  
  I'm defending caps, tiers of service and metering as viable economic pricing models in a market with scarcity of resources (network capacity).
  
  I'm not defending the BS carriers sometimes promote, nor the services they end up offering, nor the clumsy way they deliver them.

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