Saturday, May 30, 2009

Look to Electric Service for the Future of HSD

Time Warner Cable, my former employer, has been experimenting with usage caps on their high-speed internet service. There's plenty of information out on the web about this, so I won't go into detail about how they're doing it. But, subscribers are very angry about it.

At its core, usage caps and other such bandwidth limiting means are a form of pay-by-the-byte. When broadband became available by cable and the telcos it was considered a value-add for their existing services. Therefore, they offered unlimited service to entice customers. Now, however, this all-you-can-eat approach has started to cost big dollars.

The more paranoid people out there will tell you that the providers are worried about losing their core video customers to online providers such as Hulu, or Netflix. While this may be a concern to some extent, the truth comes down to the cost of transferring data. As more and more users are using more and more data, there are greater costs involved in upgrading the network to handle this data.

Inexplicably, the users do not see it this way. They don't seem to understand that larger files cost more to transfer. 

Yet, we don't have a problem paying for kilowatt hours on our electrical service. In fact, we don't have a problem with having our electrical service capped. Even more than that, we don't have a problem with paying for greater caps as the technology evolves.

The average house in the 1940s had a 30-Amp service. At the time that was more than sufficient for their electrical needs. A few light bulbs, a refrigerator, and maybe an electric range or some fans. If every device in the house was turned on then the total amperage drawn would be in the neighborhood of 20A.

With the advent of washers/dryers, dishwashers, and heat pumps the 30A service was very inadequate. So, customers paid to upgrade their house to 100A, or they bought a new property with 100A service. 

Nowadays houses have 200A service installed due to the massive increase in electronic devices. This means you can use as much electricity as you want up to 200 amps. Although you pay by the kilowatt hour, your pricing is basically determined by the service available at your house.

Now, if you want to set up that great big Tesla coil in the back yard, or perhaps run a three-phase motor, you will need special service from the power company. As a customer you are not entitled to this special service.

The problem is that broadband customers feel they are entitled to unlimited data because the providers initially offered unlimited data. This is necessarily a mistake, but it does contribute to these current issues.

But ask any of the anti-cap people why they don't mind having a cap on their electrical service. I doubt they will be able to answer you.

- Mike


  1. Your electric company reference is bunk. I can install solar panels on my house and could potentially sell any extra energy produced to the electric company. No such model exists for me to be my own data provider and sell the extra data throughput to the local data provider.

  2. I'm afraid you missed the point of the analogy. What I'm talking about is the evolution of demand versus the size of the pipe.

    They aren't the same business, which is why it's an -analogy-.

    If I were to explain how carburetors work and analogize the venturis to an airplane wing, would you say I'm wrong because carbs don't fly?

  3. I understood the -analogy- your were trying to make, but it was flawed. Based on your evolution of demand argument and comparing it to how I receive data service now, the electric company should downgrade (somehow) the houses that have been enjoying the 200-amp capacity to 75-amp capacity because there is too much strain* on the power generators due to new housing construction in the area.** Then the electricy company will allow any of the 75-amp houses to "upgrade" to a 200-amp capacity for a small(ie, large)fee.

    Do they do that? No, of course not, this is part of why electricity rates tend to go up year-to-year, along with increasing fuel rates used generate that power.

    Besides the fixed cost of upgrading hardware/software/wetware which can be passed on to the consumer over time, and as oppossed to the variable costs of fuel for electricity generation**, what other costs are involved with providing data?***

    As to your question, my answer depends on your explanation of the carburetor and the -analogy-. (Is the carburetor, for example, modified in any way and being shot out of a cannon or attached to the pigs I'll see when Time Warner becomes a decent company? See there are many missing elements missing from your question.)

    *And by strain, I mean because the electric company says it so, not due to any real impedement on physical equipment they may have.

    **Assuming non-renewable resources are being considered at this time.

    ***And assuming my monthly bill includes paying for the electricity used to power the servers providing the pipe for the data I receive.

  4. You ask what costs there are in providing data, and I'm going to try to address that to a bit with my next post.