5 ms·

So I had this thought the other day while talking to a friend that works at an electrical utility, the thought is naive so I'd love to hear some thoughts from p

by cco 6y ago

So I had this thought the other day while talking to a friend that works at an electrical utility, the thought is naive so I'd love to hear some thoughts from people in the ISP game. My friend and I calculated that it takes about $1 worth of electricity per year to keep your smartphone charged, we have cheap power so let's say $1-3, but even on a very cheap MVNO it costs at least $360 per year to provide cell service to that same phone. There are a lot of assumptions here, I pay ~$30/month for 12GB of data, for a lot of people that's too little, for some more than enough, but its the orders of magnitude that are important, is it just the case that providing cell service is 100x to 300x harder than providing electricity? I'm curious to hear the answer from people in the field, because for my friend who works in power generation, electricity generation doesn't seem 100x easier than providing data service, no coal had to be mined or water reservoirs had to be created in order to send cat videos, his words lol.

dillonmckay 6y ago
It is not like it is a P2P mesh network. Land leases are expensive for tower placement, and they need electricity and a backup generator, to power the comm. equipment and the air conditioning. And then we can talk about HVAC maintenance.
- palijer 6y ago
  Don't the utility companies have the same issues with infrastructure placement and land though? Or is there some eminent domain thing for power utilities that doesn't apply to telecom?
  - brendawalsh 6y ago
    Well, in the US, electric and telephone have more rights and regulations, compared to cable television. So, as a telecom, it is better to go in under the guise of a CATV company and use a franchise agreement, then as a phone company that also offers TV, and internet. Also, if the poles are already there (usually phone or power), the new entrant is able to lease a portion of the pole to string infrastructure. Sometimes the municipality owns the power company. Cellular providers lease tower space from private companies that negotiate the tower placement with private land owners.
  - closeparen 6y ago
    Power was built out at a time when infrastructure projects were still feasible and NIMBYs had less influence.
valleyer 6y ago
I love this question. I don't know the answer, but one part of it might be that electricity is a "commodity" that you can effectively buy from anywhere in the country, or perhaps anywhere in the world, via the power grid. Whereas for cell service you're effectively buying from one of three companies, I think. So way less competition.
- dongvsascript 6y ago
  I'm sorry, but you think you can buy electricity from anywhere in the world? in any american city, you have one choice where to buy it from. 3 companies can put up their antennas on a tower. 3 companies cannot dig trenches through chicago to every house to run wires. there are some small exceptions where it was traded on the power grid with deregulation. it caused the enron scandal. do you remember enron? the issue is we have limited frequencies to use for cell phones. any time you have another player, you are wasting that bandwidth by splitting it up more. we should have 1 cell phone provider for each area of the country, and it should be regulated like a utility. that is what will make cost lower, not more competition. there are things that are physically limited, so running it capitalist style is not appropriate because of high barrier to entry. capitalism only works well with low startup costs. i like how most of europe has internet for dirt cheap. it's public land, it's public cables. all an isp does is lease cables and provide service with their equipment connected.
c3534l 6y ago
Providing cell service takes at least the cost of electricity to run them. They're literally both electricity going down a wire. So yes, coal has to be mined and water reservoirs have to be created. You also have to build the equipment, and I imagine paying off that equipment's cost is more than the cost of electricity. That has to be mined, smelted, processed, worked, and assembled.
ponker 6y ago
This is kind of a nonsensical comparison. Most people spend more on electricity (especially indirectly) than they do on cell phone service, in total.
kortilla 6y ago
Electricity has economies of scale at play there. It wouldn’t be economical at the normal prices per kw if people were only charging phones. Even ignoring that bit, electricity has different scaling considerations. Everyone’s computers don’t need access to special Youtube electricity and Twitter electricity. It all just comes from a localized grid and can come from any standard generation source. Internet access would certainly be way cheaper if it didn’t provide global connectivity.
grahamburger 6y ago
> that providing cell service is 100x to 300x harder than providing electricity? Yes, unfortunately. It's at least that much harder. For a similar comparison think of traditional radio - you buy the radio, and that's it. You might wonder how that's possible when it costs so much to beam data to your phone wirelessly? It's a complex question with a lot of nuance, but there are two important reasons that float to the top: First, Internet requires reliable two way communication. Neither radio or electricity require that. These means economies of scales work in favor of electricity generation and radio transmission - they can put up a huge plant or radio tower, crank the power up, and serve a lot of customers far away. The customer's device doesn't have to talk back. Imagine if each home had to have a mini generator to send electricity back to the power plant - that would cost a lot! Second, Internet service requires much, much more precise electronics than power or radio transmission. The Ethernet port on your laptop can understand signalling at (at least) 1gbps (1 billion bits per second, more or less). And that's not even that much - large networks today are doing 100 of times that on single physical connections, with electronics on both sides both modulating and demodulating those signals simultaneously. All that expensive (both to design and to manufacture) electronics adds up, and is accounted for in the cost of getting those bits to you.
- grecy 6y ago
  I worked for a North American Telco in IT, and I like everything about your answer. I will also add that Telcos are wickedly inefficient. Multi-million dollar projects just to update a public website, tens of millions in advertising, more PMs and Business Analysts and Middle Managers than people doing actual work, etc. etc. Of course they want to make a tidy profit too.
- zbrozek 6y ago
  This doesn't really make sense to me. The big difference I see is the cost to buy spectrum and the inherent geographic monopoly of owning it. Transformers and switchcraft are heavy-iron things which cost a lot because they're safety-rated and built with a large amount of actual matter. Transceivers and antennas are comparatively cheap to manufacture (but with higher margins) and generally don't incinerate things if they fail. In my area the cost to deploy service seems to be primarily driven by the cost of labor to bury things. That impacts electricity more than cell data, as you actually have to physically reach every one of your customers. Also your meter is two-way. It's just sending your usage data back, not power.
ewzimm 6y ago
Another interesting point of comparison is that data limits on a VPS like DigitalOcean are $5/month/terabyte, and this includes all other aspects of renting the VPS as well. There are also MVNOs that cost less than $15/month with 1GB data caps. So keeping high bandwidth traffic to a VPS with a low bandwidth cell connection like a terminal emulator could potentially allow someone to access large amounts of data much more efficiently.
gizmo686 6y ago
Watt-Hours and Gigabytes are fundamentally different units, so comparing the marginal cost of electricity and data is non-sensical. In terms of the fixed costs. For electricity, the price you pay powering your phone is subsidized by the price you pay powering your HVAC. The portion of the electricity infrastructure that powers phones is negligable. In contrasts, the cellular networks exist almost entirely to run phones; so the cost phone users pay needs to be enough to maintain the entire network. To be a fair comparison, you would need to imagine a world where phones were the primary consumers of the electric grid. In such a world, I would expect to see electricity prices rise significantly
- read_if_gay_ 6y ago
  > imagine a world where phones were the primary consumers of the electric grid. This is actually an interesting thought experiment. Maybe the best solution would be shipping powerbanks around?
mlboss 6y ago
Mobile data in US is very expensive. In India you can get 1GB data for $0.10.

by cco 6y ago

dillonmckay 6y ago

It is not like it is a P2P mesh network. Land leases are expensive for tower placement, and they need electricity and a backup generator, to power the comm. equipment and the air conditioning. And then we can talk about HVAC maintenance.

palijer 6y ago
Don't the utility companies have the same issues with infrastructure placement and land though? Or is there some eminent domain thing for power utilities that doesn't apply to telecom?
- brendawalsh 6y ago
  Well, in the US, electric and telephone have more rights and regulations, compared to cable television. So, as a telecom, it is better to go in under the guise of a CATV company and use a franchise agreement, then as a phone company that also offers TV, and internet. Also, if the poles are already there (usually phone or power), the new entrant is able to lease a portion of the pole to string infrastructure. Sometimes the municipality owns the power company. Cellular providers lease tower space from private companies that negotiate the tower placement with private land owners.
- closeparen 6y ago
  Power was built out at a time when infrastructure projects were still feasible and NIMBYs had less influence.

valleyer 6y ago

I love this question. I don't know the answer, but one part of it might be that electricity is a "commodity" that you can effectively buy from anywhere in the country, or perhaps anywhere in the world, via the power grid. Whereas for cell service you're effectively buying from one of three companies, I think. So way less competition.

dongvsascript 6y ago
I'm sorry, but you think you can buy electricity from anywhere in the world? in any american city, you have one choice where to buy it from. 3 companies can put up their antennas on a tower. 3 companies cannot dig trenches through chicago to every house to run wires. there are some small exceptions where it was traded on the power grid with deregulation. it caused the enron scandal. do you remember enron? the issue is we have limited frequencies to use for cell phones. any time you have another player, you are wasting that bandwidth by splitting it up more. we should have 1 cell phone provider for each area of the country, and it should be regulated like a utility. that is what will make cost lower, not more competition. there are things that are physically limited, so running it capitalist style is not appropriate because of high barrier to entry. capitalism only works well with low startup costs. i like how most of europe has internet for dirt cheap. it's public land, it's public cables. all an isp does is lease cables and provide service with their equipment connected.

c3534l 6y ago

Providing cell service takes at least the cost of electricity to run them. They're literally both electricity going down a wire. So yes, coal has to be mined and water reservoirs have to be created. You also have to build the equipment, and I imagine paying off that equipment's cost is more than the cost of electricity. That has to be mined, smelted, processed, worked, and assembled.

ponker 6y ago

This is kind of a nonsensical comparison. Most people spend more on electricity (especially indirectly) than they do on cell phone service, in total.

kortilla 6y ago

Electricity has economies of scale at play there. It wouldn’t be economical at the normal prices per kw if people were only charging phones. Even ignoring that bit, electricity has different scaling considerations. Everyone’s computers don’t need access to special Youtube electricity and Twitter electricity. It all just comes from a localized grid and can come from any standard generation source. Internet access would certainly be way cheaper if it didn’t provide global connectivity.

grahamburger 6y ago

> that providing cell service is 100x to 300x harder than providing electricity? Yes, unfortunately. It's at least that much harder. For a similar comparison think of traditional radio - you buy the radio, and that's it. You might wonder how that's possible when it costs so much to beam data to your phone wirelessly? It's a complex question with a lot of nuance, but there are two important reasons that float to the top: First, Internet requires reliable two way communication. Neither radio or electricity require that. These means economies of scales work in favor of electricity generation and radio transmission - they can put up a huge plant or radio tower, crank the power up, and serve a lot of customers far away. The customer's device doesn't have to talk back. Imagine if each home had to have a mini generator to send electricity back to the power plant - that would cost a lot! Second, Internet service requires much, much more precise electronics than power or radio transmission. The Ethernet port on your laptop can understand signalling at (at least) 1gbps (1 billion bits per second, more or less). And that's not even that much - large networks today are doing 100 of times that on single physical connections, with electronics on both sides both modulating and demodulating those signals simultaneously. All that expensive (both to design and to manufacture) electronics adds up, and is accounted for in the cost of getting those bits to you.

grecy 6y ago
I worked for a North American Telco in IT, and I like everything about your answer. I will also add that Telcos are wickedly inefficient. Multi-million dollar projects just to update a public website, tens of millions in advertising, more PMs and Business Analysts and Middle Managers than people doing actual work, etc. etc. Of course they want to make a tidy profit too.
zbrozek 6y ago
This doesn't really make sense to me. The big difference I see is the cost to buy spectrum and the inherent geographic monopoly of owning it. Transformers and switchcraft are heavy-iron things which cost a lot because they're safety-rated and built with a large amount of actual matter. Transceivers and antennas are comparatively cheap to manufacture (but with higher margins) and generally don't incinerate things if they fail. In my area the cost to deploy service seems to be primarily driven by the cost of labor to bury things. That impacts electricity more than cell data, as you actually have to physically reach every one of your customers. Also your meter is two-way. It's just sending your usage data back, not power.

ewzimm 6y ago

Another interesting point of comparison is that data limits on a VPS like DigitalOcean are $5/month/terabyte, and this includes all other aspects of renting the VPS as well. There are also MVNOs that cost less than $15/month with 1GB data caps. So keeping high bandwidth traffic to a VPS with a low bandwidth cell connection like a terminal emulator could potentially allow someone to access large amounts of data much more efficiently.

gizmo686 6y ago

Watt-Hours and Gigabytes are fundamentally different units, so comparing the marginal cost of electricity and data is non-sensical. In terms of the fixed costs. For electricity, the price you pay powering your phone is subsidized by the price you pay powering your HVAC. The portion of the electricity infrastructure that powers phones is negligable. In contrasts, the cellular networks exist almost entirely to run phones; so the cost phone users pay needs to be enough to maintain the entire network. To be a fair comparison, you would need to imagine a world where phones were the primary consumers of the electric grid. In such a world, I would expect to see electricity prices rise significantly

read_if_gay_ 6y ago
> imagine a world where phones were the primary consumers of the electric grid. This is actually an interesting thought experiment. Maybe the best solution would be shipping powerbanks around?

mlboss 6y ago

Mobile data in US is very expensive. In India you can get 1GB data for $0.10.