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HDTV Almanac - The End of Unlimited?
by Alfred Poor on May 27, 2011 Categories: Cable HDTV, Entertainment, LED (LCD) HDTVs, Service & Repair

[I have not run out of material about SID Display Week 2011, but it’s time to get back to some of the other news in the HDTV Almanac world of large screens and home entertainment.]

One of my favorite hobbyhorses is the concept that content as a service will eventually become separated from the data pipes that deliver it. I expect that “data” will become a utility, just like water or electricity. And I believe that “telephone” and “television” services will become the separate content services that they really are. One logical outcome of this shift will be that the data access will be metered, and those who use more data will pay more than others who use less. That’s how water and electricity utilities work, and eventually data utilities will work in much the same way.

As evidence of this inevitable shift, I offer the news from Verizon from last week. According to a report by Reuters, the company plans to eliminate flat-rate data plans for new smartphone customers starting this summer. Instead, consumers will be able to choose among different tiered plans based on a monthly limit for data transfers. AT&T dropped its flat-rate data plans last year.

I expect that most users will actually end up paying less under these plans, and that the heavy-users will end up paying more of their share. This does have implications for data-intensive activities, such as streaming Netflix content to a smartphone or tablet, but I expect that the market will work itself out and competition will help keep the costs down for both wired and wireless data service.

Posted by Alfred Poor, May 27, 2011 6:00 AM

Reader Commentary

Reply
darby427 • May 27, 12:42pm
Alfred - I hope you are right, but I feel as if we the consumer will get screwed as usual. Case in point, look at the data speeds on the other side of the pond.. 20-30-50 mbs is the norm.. here its not even possible without paying about as much as gas.....
Reply
alfredpoor • May 27, 12:53pm
I don't entirely understand why broadband costs are so much lower in some other countries; maybe there are greater government subsidies at work there. On the other hand, be sure to compare the price of gasoline while you're pricing broadband. Due to much higher taxes, Europeans can pay four or five times as much as we do.

There's no such thing as a free lunch. If we're going to get something valuable, whether it is technology or entertainment or energy, somebody is going to pay for it. And if it isn't the consumer, then the entity picking up the tab will come to the consumer (or taxpayer) sooner or later to collect.

Alfred...
Reply
rml • May 28, 9:58am
From an abstract economic view, the production function for these communications services is extremely simple: 2 inputs (data at source + transmission) = 1 output (data at point of consumption, whatever its content: telephone, websites, music, tv, movies, etc., ...). In fact, from a purely economic viewpoint it is no different than natural gas or electric utility service (gas or electricity at source + transmission = energy at point of consumption). With the advent of packet switching and terabit fiber transmission rates coming into production, the idea of expensive, limited bandwidth (read transmission capacity) as a justification for high transmission costs is ridiculous. The reason we have expensive service and low bandwidth relative to Europe and Asia is because the transmission industry across all segments lobbied and succeeded in obtaining virtually total rate deregulation. What this means from a pricing standpoint is that as consumers, we get priced using a "value of service" mo...
Reply
Roger Halstead • May 30, 12:43pm
First, I completely disagree with rlm as he/she ignores two very important differences between Europe and the US. Also I'd view the system more like a trucking or rail system where there is the provider, the transportation, and delivery system, or three independent systems. Plus is the high speed in Europe *that* much cheaper.

1. Europe has a very high average population density compared to the US which makes for much shorter distances between customers.
2. The European countries have socialist economies with over half the individual's income going into taxes. However when it comes to gas most of them pay well over double what we do as the system is based on the US dollar. Certain elements are trying to change that and if they do *THEN* we will see gas prices that are really high. The devaluation of the dollar is only giving us a taste of what would be.

Taking #1, the US companies have to put in far more hardware to deliver the same data to far fewer customers compared to Eu...

About Alfred Poor

Alfred Poor is a well-known display industry expert, who writes the daily HDTV Almanac. He wrote for PC Magazine for more than 20 years, and now is focusing on the home entertainment and home networking markets.