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
Mobile/internet companies don’t create data – they transfer it. Data exists on a server somewhere – the movie you want to watch on Netflix is sitting on an AWS hard drive in some data center. The ISPs just provide the cables and network to get it from that data center to your house.
They tend to charge based on how much they transfer. This is because each cable can only transfer so much data at any given time, so there is a maximum amount of data that can be transferred to all of the end users.
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