5 ms·

Tech is too cheap to meter, It's time to manage for Abundance

13 points by Readmore 17y ago

stcredzero 17y ago
Shouldn't SMS messages already be in the "too cheap to meter" category?
- kragen 17y ago
  It's my understanding that they started out that way in Europe, which is how they got popular. But then somehow the carriers started charging for them. I don't understand how this happened, and I suspect it warrants an antitrust investigation — surely any carrier that offered free SMS with a slightly higher per-minute voice rate would attract a lot of customers who made voice calls once every month or two, and clean up. So I suspect price-fixing.
  - edfgtrfgh 17y ago
    It would take a lot of voice calls to make up for charging 10p/10c for a text which costs nothing to send!
    - kragen 17y ago
      I'm not saying it would be more profitable; I'm saying it wouldn't lose money, and a lot of people would prefer that service to the service they have. So in a competitive market, someone would be offering it.
rw 17y ago
> This is the power of waste. When scarce resources become abundant, smart people treat them differently, exploiting them rather than conserving them. It feels wrong, but done right it can change the world. Try calling it experimentation or play. This dramatic word usage reminds me of how programmers are supposedly "lazy", when we are actually just being efficient by amortizing our development costs.
- edfgtrfgh 17y ago
  When free evening/weekend calls were first introduced there were stories of people using their cell phones as baby monitors - the phone co had to introduce a one hour maximum call length.
asciilifeform 17y ago
Notice how everything which is technically "too cheap to meter" gets metered anyway. Text messages, ring tones, etc. are all examples of products with a cost of production approaching zero, which consumers are charged for simply because it is possible to do so.
- zach 17y ago
  Indeed, we have gotten tremendously more efficient at metering things, even things that aren't being charged for. The idea that something would be more expensive to meter than to provide is clearly not of the digital age.
  - kragen 17y ago
    I think that off-peak SMS is definitely more expensive to meter than to provide. The marginal cost is storing 160 bytes for a few seconds, and transmitting those bytes over idle network bandwidth, which has zero marginal cost, and then over the air, which does have a nonzero cost: 1 watt * 160 bytes / 12 kilobytes per second ≈ 20 millijoules, about US$3 × 10⁻¹⁰ at 6¢/kWh — ⅓ nanodollar. The cost of storage is a little more complicated to quantify. Page 72 of the new Warehouse-Scale Computers book has a couple of case studies: one machine with four disks with a $10 757 three-year TCO and one machine with an unspecified number of disks (let's assume four here also) and a $8 702 three-year TCO. That's maybe two terabytes × 36 months for, generously, US$11k. That's US$1.5 × 10⁻¹⁰ per byte-month, or US$9.3 × 10⁻¹⁵ per byte-second. (The cost might be a little higher due to the need to store some of your bytes on old servers, or equivalently to depreciate your server faster at first.) The cost of metering, by comparison, is to send several messages over the network to update redundant billing records in stable storage, where they must remain at least for the rest of the month. In many cases, to- and from- information is retained for the rest of the month and then printed on the bill. Origin, destination, and timestamp are, say, 32 bytes, and have to be stored for half a month on average, for US$2.4 × 10⁻⁹ (per replica), which is more than ten times the cost of transmitting the original message over the air. But then if they're printed on the bill, they might take up 1/300 or so of a sheet of 8½×11 paper, which costs on the order of 3¢ to print, so printing them costs on the order of 1/100¢, or US$1 × 10⁻⁴. But if you're just incrementing a counter in stable storage, rather than recording per-SMS information, you don't pay any extra marginal storage cost per message; you just have to pay a database update. Most database servers are actually bottlenecked on random I/O rather than sequential I/O, but in order to come up with a minimal rather than a maximal cost of a write, let's assume the billing database server is bottlenecked on sequential output at 400 megabytes per second on its four disks, and we need 8 bytes per update. That's half a million SMSes logged per second, presumably on two redundant servers; if we charge the server TCO entirely to the update rate instead of the storage cost, the US$305/month TCO per server comes out to 4.6 × 10⁻¹⁰, which is still more than the cost of sending the original SMS. However, by far the biggest cost here, other than the cost of printing, is the fixed cost of maintaining the user's account. Just maintaining their name, address, and phone number on a disk in a data center somewhere costs at least 50 bytes, which is about US$7.5 × 10⁻⁹ per month, the cost of 25 SMSs; they probably don't send more than 30 000 SMSs per month, which even in the worst case cost US$9 × 10⁻⁶ of energy to transmit and US$7.2 × 10⁻⁵ to log for the rest of the month. But several times a minute, the phone talks to the tower to let it know it's still in range, doesn't it? And the cost of accepting a credit card payment from the client (once a month, normally) is in the range of 30¢, isn't it? So, for 30 000 off-peak SMSs in a month: Keeping a record of the customer's account: ≪1 microdollar Providing the service: 9 microdollars Keeping a detailed record of the service provided in order to bill for it: 72 microdollars Keeping the phone associated with one cell or another: 36 microdollars Printing out a paper bill: 300 000 microdollars Mailing the bill (guessing): 1 000 000 microdollars Accepting credit-card payment: 300 000 microdollars Handling a five-minute customer-service phone call (guessing): 1 000 000 microdollars I suspect that on-peak SMS isn't substantially more expensive to provide, but I'm not doing that calculation right now.

13 points by Readmore 17y ago

stcredzero 17y ago

Shouldn't SMS messages already be in the "too cheap to meter" category?

kragen 17y ago
It's my understanding that they started out that way in Europe, which is how they got popular. But then somehow the carriers started charging for them. I don't understand how this happened, and I suspect it warrants an antitrust investigation — surely any carrier that offered free SMS with a slightly higher per-minute voice rate would attract a lot of customers who made voice calls once every month or two, and clean up. So I suspect price-fixing.
- edfgtrfgh 17y ago
  It would take a lot of voice calls to make up for charging 10p/10c for a text which costs nothing to send!
  - kragen 17y ago
    I'm not saying it would be more profitable; I'm saying it wouldn't lose money, and a lot of people would prefer that service to the service they have. So in a competitive market, someone would be offering it.

rw 17y ago

> This is the power of waste. When scarce resources become abundant, smart people treat them differently, exploiting them rather than conserving them. It feels wrong, but done right it can change the world. Try calling it experimentation or play. This dramatic word usage reminds me of how programmers are supposedly "lazy", when we are actually just being efficient by amortizing our development costs.

edfgtrfgh 17y ago
When free evening/weekend calls were first introduced there were stories of people using their cell phones as baby monitors - the phone co had to introduce a one hour maximum call length.

asciilifeform 17y ago

Notice how everything which is technically "too cheap to meter" gets metered anyway. Text messages, ring tones, etc. are all examples of products with a cost of production approaching zero, which consumers are charged for simply because it is possible to do so.

zach 17y ago
Indeed, we have gotten tremendously more efficient at metering things, even things that aren't being charged for. The idea that something would be more expensive to meter than to provide is clearly not of the digital age.
- kragen 17y ago
  I think that off-peak SMS is definitely more expensive to meter than to provide. The marginal cost is storing 160 bytes for a few seconds, and transmitting those bytes over idle network bandwidth, which has zero marginal cost, and then over the air, which does have a nonzero cost: 1 watt * 160 bytes / 12 kilobytes per second ≈ 20 millijoules, about US$3 × 10⁻¹⁰ at 6¢/kWh — ⅓ nanodollar. The cost of storage is a little more complicated to quantify. Page 72 of the new Warehouse-Scale Computers book has a couple of case studies: one machine with four disks with a $10 757 three-year TCO and one machine with an unspecified number of disks (let's assume four here also) and a $8 702 three-year TCO. That's maybe two terabytes × 36 months for, generously, US$11k. That's US$1.5 × 10⁻¹⁰ per byte-month, or US$9.3 × 10⁻¹⁵ per byte-second. (The cost might be a little higher due to the need to store some of your bytes on old servers, or equivalently to depreciate your server faster at first.) The cost of metering, by comparison, is to send several messages over the network to update redundant billing records in stable storage, where they must remain at least for the rest of the month. In many cases, to- and from- information is retained for the rest of the month and then printed on the bill. Origin, destination, and timestamp are, say, 32 bytes, and have to be stored for half a month on average, for US$2.4 × 10⁻⁹ (per replica), which is more than ten times the cost of transmitting the original message over the air. But then if they're printed on the bill, they might take up 1/300 or so of a sheet of 8½×11 paper, which costs on the order of 3¢ to print, so printing them costs on the order of 1/100¢, or US$1 × 10⁻⁴. But if you're just incrementing a counter in stable storage, rather than recording per-SMS information, you don't pay any extra marginal storage cost per message; you just have to pay a database update. Most database servers are actually bottlenecked on random I/O rather than sequential I/O, but in order to come up with a minimal rather than a maximal cost of a write, let's assume the billing database server is bottlenecked on sequential output at 400 megabytes per second on its four disks, and we need 8 bytes per update. That's half a million SMSes logged per second, presumably on two redundant servers; if we charge the server TCO entirely to the update rate instead of the storage cost, the US$305/month TCO per server comes out to 4.6 × 10⁻¹⁰, which is still more than the cost of sending the original SMS. However, by far the biggest cost here, other than the cost of printing, is the fixed cost of maintaining the user's account. Just maintaining their name, address, and phone number on a disk in a data center somewhere costs at least 50 bytes, which is about US$7.5 × 10⁻⁹ per month, the cost of 25 SMSs; they probably don't send more than 30 000 SMSs per month, which even in the worst case cost US$9 × 10⁻⁶ of energy to transmit and US$7.2 × 10⁻⁵ to log for the rest of the month. But several times a minute, the phone talks to the tower to let it know it's still in range, doesn't it? And the cost of accepting a credit card payment from the client (once a month, normally) is in the range of 30¢, isn't it? So, for 30 000 off-peak SMSs in a month: Keeping a record of the customer's account: ≪1 microdollar Providing the service: 9 microdollars Keeping a detailed record of the service provided in order to bill for it: 72 microdollars Keeping the phone associated with one cell or another: 36 microdollars Printing out a paper bill: 300 000 microdollars Mailing the bill (guessing): 1 000 000 microdollars Accepting credit-card payment: 300 000 microdollars Handling a five-minute customer-service phone call (guessing): 1 000 000 microdollars I suspect that on-peak SMS isn't substantially more expensive to provide, but I'm not doing that calculation right now.