Most underlying trends in any business follow a Pareto distribution, commonly known as the “80/20” rule, where 80 percent of results flow from some 20 percent of the instances. That applies for consumer manufacturer warranty claims, for example.
In the telecom and most other businesses, as much as 80 percent of the profit is generated by serving 20 percent of the customers.
That is clear in the distribution of customer accounts, ranked by revenue potential.
Most workers make tradeoffs between housing costs and commuting time and hassle. In a common tradeoff, workers choose to pay higher rents or mortgages to cut commute times. But as with all such tradeoffs, most of the value of shorter commutes seems to follow a Pareto distribution. A Pareto distribution suggests that as much as 80 percent of the value comes from 20 percent of the decisions.
For workers in New York city who commute by subways, longer commutes lead to lower housing costs in less than 40 percent of instances, with the bulk of the “higher housing cost, less than 20-minute commute” value occurring for housing with a 20-minute or shorter commute by subway.
It is likely that similar Pareto distributions exist for all forms of internet access and communications infrastructure, where 80 percent of the value comes from 20 percent of the decisions or instances.
In 2010, for example, the most-desirable areas of U.S. cities (highest density, most internet service providers) represented about four percent of census tracts. Those areas had, in 2010, three ISPs in the market. Some 78 percent of census tracts had two providers; 13 percent of tracts a single provider and five percent of tracts had no fixed network provider.
Similarly, the overwhelming portion of the cost of ubiquitous fixed network infrastructure comes from a relative handful of locations in the most-rural areas.
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