Eli5 – How does data work and how do mobile and internet companies create it ? Can they create as much as they want ? Do they control the quota to control prices ?
In: Technology
The first thing to understand is that “data” in this sense is not really a thing that can be created. “Data” in this sense would refer to internet access, which is your ability to talk to other computers or devices that you’re not directly connected to.
What internet providers actually provide is access to these other networks. Companies that provide internet have connections to their end users on one side, and connections to other similar companies on the other side. Your ISP is the bridge between you and the other companies (and their end users).
The reason why companies charge you for usage, or impose speed restrictions, is that they generally have a limited capacity to carry data transmissions. Each individual user wouldn’t be a drain on the network, because the larger connections to other companies are able to carry huge amounts of data, but when you multiply that by thousands of users, it adds up and the company can run into the limit of what their connections carry. Bandwidth caps and speed restrictions are designed to lessen the amount of usage each individual user is using, to make sure there’s enough room for everyone on the connection.
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