Saturday, September 3, 2016

Why Limiting "Unlimited" Mobile Data Plans is a Good Thing

Unlimited mobile data now is offered in some form by all the leading U.S. mobile service providers, but “unlimited” does not mean there are no usage limits. Some might say that is a good thing.

Customers still buy buckets of data usage. But if those usage limits are hit in any billing period, mobile data speeds get reduced, at some point, to 2G speeds (128 kbps, in some cases). That, many would argue, is better than losing all connectivity.

Some will argue the plans are not truly "unlimited." But some might argue that is a good thing, not a bad thing.

In a sense, truly unlimited data usage represents an abundance problem for service providers in a market traditionally defined by scarcity. A problem, nevertheless.

Some observers might say there is an abundance problem even for end users, in the ecological sense. As with any other resource, removing price as a barrier to consumption encourages consumption.

As with any other carbon-linked form of consumption, we can debate the merits of encouraging “wastefulness” or “high consumption.”

To be sure, consumption of Internet bits is more subtle than in the physical or real world. But the infrastructure to deliver and use bits is not energy-free, resource-free or carbon-free.

Abundance is, in real ways, an underpinning of Internet app economics and business models. Abundance is going to become a bigger part of physical Internet access models as well.

Still, a needle has to be threaded Removing bandwidth supply constraints, and ending scarcity, underpins Internet app value and business models.

But access networks are relatively expensive, and also have to be sustainable. That means it always will be harder to build on abundance on the app side of the business than on the access bandwidth side of the business.

Unlimited use of any physical resource tends to create problems for sustainability. So it might be argued that limits on use of “unlimited” resources is a good idea.

As a practical matter, truly unlimited plans might endanger the health of the access service itself. And that would not be a good thing.

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