Still pondering capacity…

I’ve been busy working on a specific work project — writing copy for a spectrum/telecom primer website — so haven’t gotten as far along with my own capacity project as I’d like. Though this probably speaks to one of the best benefits that professors have mentioned about grad school, the space and time to just think about things.

Part of my reflecting on capacity issues is thinking how the surplus value is captured and how the benefits are disseminated amongst society. Is there an ideal split between industry, consumers and citizens? Does having the first two groups in competition naturally result in positive benefits for the third? How do power asymmetries influence those outcomes? What kind of policies can be created/instituted that results in the ideal outcome? Is it better for innovation to steadily improve all groups simultaneously or do alternating periods of over- and under-capacity trigger rapid improvement that have better long term outcomes? After all, if necessity is the mother of all inventions…

Back at the end of April, I saw an interesting Tweet about how UK consumers have been grossly overestimating mobile data needs. Apparently a bunch of mathematicians at Oxford, with the approval of the UK regulator, built some tools to analyze people’s cell phone bills. (The tool has been around for a while and seems to be a proven success. Which is interesting itself, when reflecting on Industry Canada developing but never releasing a similar tool that looked at voice and texting, though not data.)

I found ‘The report on smartphone data usage’ [PDF] to be quite illuminating, with the central finding being that consumers were so concerned about “bill shock” that they were purchasing data plans without coming anywhere near the limits. I wonder what impact does vertical integration of media/telecommunication companies have on ‘informed’ consumer decisions?

The report hit home for me as a couple years into getting a smartphone, I took a closer look at my data usage to determine if I was on the right cellphone plan. I had taken advantage of an initial iPhone promotion for 6GB/month of data but wasn’t sure I was getting all the value from it. Partly this was due to my bill only reporting in KB used for nearly 2 years before finally listing information also in MB, which did not make for consumer-friendly analysis.

While the fact that I had a promotion with a large data cap skews some of the data, I’ve paid for an allowance of 270GB and used “only” 21.63GB. At the time I looked at reducing my data plan, I was told that I only had two options. 1GB for $30, the same price I was paying for 6GB or 500MB for $25. (For comparison, with a 1GB/month plan I would of had a total allowance of 45GB over the same period.) To save $5 a month didn’t see worth losing my promotional offer and drop my cap so massively, especially with the prospect of tethering a new laptop at the time. That said, in nearly 3 years of usage before grad school (including a year after reviewing my plan) I went over 500MB in only 1 month.

I’ve essentially been paying a huge insurance premium for an allowance that I haven’t come close to using and not even halfway to a more “normal” allowance. In fact, even with some extended, tethered streaming sessions during the past couple terms in part to feel like I was getting value, I’ve only gone over 1GB usage 3 times! While one person’s usage case is not statistically significant, it gives me a starting point.

Some these issues deal with the way carriers architect their networks and building capacity that meets the peak load. And certainly I (both unconsciously and quite consciously) am paying a premium for some cost certainty with billing. Also, paying a surplus over current usage allows operators to reinvest surplus capital into increase network capacity. But using less then 10% (or even just under 50%) of the capacity I’ve paid for, it feels like as a consumer that the benefit accruing to individuals is quite small. With a 3-year (plus) contract to get access to a phone I desired, I have also been unable to tap into the higher speeds offered by newer networks and mobiles with faster radio-access.

As my contract approaches the end of its term, I’ll need to seriously consider what the best option is for me and how I can receive more of the value for the excess/unused network capacity I’m paying for.