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Article : Why account for every byte?

I recently found myself at 37,000 feet on a flight from San Francisco to Toronto, Skyping with my son who is at university. After a brief “can you hear me now” exchange, the call signal adjusted itself and the quality of the video call became crystal clear. Say goodbye to one of the last bastions of refuge from the interconnected world.

A typical day in the typical life of a typical cell phone customer!

Internet access on flights isn’t new; several carriers have featured the service for a number of years and I’ve been using the Internet “up in the air” for some time. What became evident to me on that recent flight, however, is the continuing improvement in the quality and speed of the connection. And that’s a trend for bandwidth overall, whether by satellite (as is the case on planes), cable/phone lines or wireless devices.

According to research firm IDC, Internet traffic will grow 32% per year from 2010 to 2015. We currently send about 46 terabits per second, and that should grow to more than 200 terabits per second by 2015. Cisco suggests total annual Internet traffic will grow to 966 exabytes by 2015.

Of course, such numbers can become meaningless without interpretation, so let’s just say we will be able to send the equivalent of a million four-drawer filing cabinets filled with 20 million pages — every second. Each year, we’ll send information equivalent to twice the number of words spoken by all humankind since the beginning of time. Whoa.

As our demands on the system grow, technologies behind the scenes will emerge to support huge transmissions of capacity. A recent IBM press release, for example, noted the company has developed “the first parallel optical transceiver to transfer one trillion bits — one terabit — of information per second, the equivalent of downloading 500 high-definition movies.”

Someday, we’ll have this type of bandwidth in our homes and on our mobile devices. Which brings me to accountants and wireless companies. Given the reality of these trends, why do wireless companies use a business model that deploys thousands of accountants at a cost of millions of dollars to track individual bits of information and charge customers every time they go over a usage cap? I seem to be in a perpetual state of war with my wireless/Internet service provider. Our family has four iPhones — and we spend a substantial sum of money to support our data-driven lifestyle as well as a high-speed Internet connection. Every time we make some small change that involves an incremental adjustment in bandwidth, the fee goes up.

The approach of these companies seems to be that in a world of continuous bandwidth growth, they should track each and every byte. Couldn’t they save a ton of money if they just offered a simple flat-fee service that recognizes the reality of our times? They’d eliminate a bunch of sophisticated IT systems, the staff who supports them, the marketing staff who dreams up complex campaigns that revolve around bit-tracking, and the support staff who has to clean up the mess after the inevitable showdown with the customer when things (usually) go wrong.

Here’s the conundrum in a nutshell: Internet usage and capacity will continue to grow at an exponential pace. But the industry that handles the flow of data sees tracking individual bits as a critical part of the business plan. I’d say this is one of those industries where you really question the value of the accounting mind-set, don’t you think?

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