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
Data is just the code that is used to make what you do on a computer, phone, tablet, etc.. If you look at a word file it may be 52kb of data, and a song might be 5mb of data (about 1000 times as much). This “data” are the lines of code, and the song is a larger amount of data because a song is more complex than a word document. Data is what makes up all the websites, apps, social media. The internet is just getting data from a server and transporting it to your device.
With the cellphone companies, they build towers that connect to our devices that can transmit those lines of code wirelessly to the hard line to the internet. Each of these towers can only handle a certain number of connections to devices at a time. They use systems so that towers can cover massive numbers of devices, but there is still a limit. Further, that choke point of the tower connecting to the internet also has a limited number of connections.
What you are paying for each month is for them to maintain these towers and connections, build more as more devices are being used, and profit.
Data is not a limited resource the internet companies own, but they own the pipelines from our houses to the internet. The prices they set for data usage isn’t a price that changes like oil, but it does adjust as they have to use more complex technology, and like most businesses their prices ended up nearly the same out of competition.
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