June 02, 2010, 7:28 PM — Once again, something related to the iPhone has the world a-twitter, only this time it's from AT&T, namely the end of unlimited data plans for the iPhone/iPad. While the reaction to this change is, surprisingly, fairly sober, with only a wee bit of screaming and raging about "bait and switch" and the usual litany of silliness that accompanies any similar change. Still, this brings up an issue I've discussed with some friends of mine who run or ran data centers, namely, that bandwidth costs real money to create, provide and support, and that we're seeing the days of unlimited bandwidth slowly come to an end.
One of the problems with discussing bandwidth costs is of course, you can't see it. You can't hold it in your hands, it's not "real". You plug into it, via Ethernet or wireless and voila, connection. Once you've done the initial buildout of infrastructure, then it's pretty much free from there, right?
Well, no. First, the idea that you stop adding bandwidth is ridiculous. As Carlin's Law of Stuff clearly shows, the more room, (bandwidth) you create for your stuff, (data), the more stuff, (data) you get. It's inevitable, and it's been a big help to creating this hydra that includes everything from "shouldbobshavehisbeard.com" to things like Salesforce.com. The steady increase in available bandwidth, nation- and worldwide, has allowed more and more creative uses for that bandwidth. Speaking as someone in his early 40s, I can clearly remember times when, while we may have thought about what is now called cloud, the idea of doing that when an insanely high-speed connection was a T-1? Pretty much impossible. Nowadays, cell phones have higher-bandwidth connections than a T-1 can provide, and at a tenth the cost, if not cheaper.
Bandwidth, and the steady hunger for more bandwidth to support more interesting uses for that bandwidth have been a rather positive feedback loop for the entire planet.
However, that means that bandwidth providers, especially the high-end/Tier 1 providers like AT&T and Verizon are never "done". They are always planning for and building the next expansion to their network, or the next major upgrade to a still faster version of what they have "now". Those costs are nigh-constant, and have to be paid for. Thirty or so bucks a month for unlimited bandwidth won't do that.
In addition, there are infrastructure costs that never, ever, ever go away, or even really get smaller. The first one is power. I don't care how miraculous your network connection is, from UTP to Fiber to Wireless, I can tell you, with absolute assurance, that at multiple points in that chain, the bandwidth provider(s) will be requiring electrical power, and rather large amounts of it. Power companies incur constant costs of their own in providing power. Construction, maintenance, repair, what have you, they all cost money. The people that perform those tasks and the people who support those people all cost money.
In addition, the sloppy power that keeps your oven or desk lamp perfectly happy won't cut it for this kind of work. You need conditioning equipment, backup generators, and people to build and maintain all that. Then there's the bandwidth equipment itself. Again, the same constant costs.
Note, I'm not including HVAC. That's just as required, and is another set of constant costs that never really go down, and over time, go up as you need more of it. Nor am I including end-user support costs. Etc. Yadda.
All of these costs to provide bandwidth have to be paid for, and ideally, they should be paid for in proportion to their use. Unlimited data plans don't allow for that. It's one-size-fits-all, and that never works. So to not only ensure that the relatively small number of people using massive amounts of bandwidth actually pay for said bandwidth, but giving people who don't use as much bandwidth some form of choice in the matter, AT&T, like a lot of providers is getting rid of unlimited bandwidth plans. This is not some evil act, but a way of more realistically charging for their services.
I'd say "get used to it". AT&T is breaking no new ground here, nor are they lagging behind people. The unlimited bandwidth for a small monthly fee model was never going to work forever. It was simply unrealistic when compared to the costs of providing that bandwidth.
If there's any surprise in this move by AT&T, it is that they waited as long as they have to make it.