So the problem again with all the demand that we've just seen is that networks have a finite and limited capacity. So they can't handle everything that we're putting on them all the time, especially if we keep increasing the amount that we're consuming. And so what we call the jobs inequality of capacity, the reason we do that is because it really started with the introduction of the iPhone, which caused that 50 fold increase in demand around 2007 on mobile data devices. the Jobs' Inequality Of Capacity basically says that the growth in demand began to outpace the growth in supply. And it was projected to climb higher and higher every year. Really, around the turn of the century. So, the iPhone was introduced something around here, and that caused the growth in demand to really spike way up. And notice, this isn't supply, itself, this is supply per dollar. And so what do we mean by supply per dollar? Well, it's really the amounts of incremental supply that we can add to the network for the same amount of money. Right, so, as technology gets better and better, naturally it's going to get cheaper, to roll out and to increase the capacity costs that we have in the networks, as the supply per dollar will go up, so we can have more supply for the same amount of money that we're spending. Right. But the problem is that the demand started to get so large and it was really growing at such a fast pace that the supply per dollar couldn't really keep up with that anymore. And you can see this trend right here. So the important thing is that these aren't absolute demand and supply. This is the growth in demand, which is beginning to outpace the growth in supply. And so, again, the reason for this emphasis again is because smartphones make data consumption really easy. And attractive for us to use. And you know, we saw again that data demand is really doubling each year. And if you look at that chart, it's, it's almost doubling, not quite doubling. You look at that Cisco chart that we showed in the last slide you'll see that every year it's about, it's going up like. Basically a factor of two. And no technology can keep that up forever. You can't keep doubling the amount of supply per dollar forever. It's just not feasible and not possible. I mean you're trying to squeeze the same amount of improvement out of what you have. And that's really just becomes in feasible after a while. So a change is really needed. And so, that's really what caused the migration to usage based pricing, so ISP's began switching to what we call usage based, which we introduced at the beginning. That's for charging per unit or per quantity of consumption. Right? So, it's per unit rather than just paying a flat rate at the end of the month, and consume as much as you want. You know the more you consume, the more you're going to have to pay and the less you consume, they less you're going to have to pay. And this has a different pricing signal. And we saw a signal, the idea of quote unquote a signal. Not an electrical signal, but the idea of a feedback signal. We we looked at that in chapter one and a little bit as well in lecture two. And when we looked at cellular we, we saw a feedback signal for being able to correct for interference and that's kind of a similar idea here it's just with pricing instead and correcting for the amount of data that you're going to pull out. And we'll, we'll look exactly what we mean by that a little later. But this is this is the idea here really, under a flat rate pricing, which is on the left hand side, you know at at the beginning of the month you pay some amount, right, $20, $40, whatever it is to the network. And then for the rest of the month this is the way, this is the way the diagram goes, you could just pull as much data as you want Gigabytes without having to pay any extra money. So this is, this is all basically just free, right. It's just a buffet, you go into the buffet and you consume as much as you want for the rest of the month. Now under usage based pricing instead, what we do is we close this loop, right, so we create a feedback loop. And you can look at it like this, because really it, that's what it is. Is that every time you pull some data from the network, you're going to see that cost at the end of the month, right? So rather than just paying a fixed amount than using it all for the month which, of course, you don't want to use as much as possible, every time you pull more data, you're going to have to pay. So, it goes along again with our electric utilities. You only use water, you only use electricity when you actually need it. Because you don't want to have to pay for it, if you're not, needing it. And so it's the same thing here. It's trying to put those, incentives, aligned. And try to align, your incentives accordingly. And so it's a, it's a more efficient we say, it really is a more efficient pricing signal. Usage-based pricing. Flat-rate isn't really because the signal is really free, right? After you pay this amount, this is all free. Let me forget the fact that you have to cons, you have to pay this initial amount, cause every time you consume a gigabyte, you're not paying anything extra, so in front of the cost is already done. So, usage-based pricing was adapted in the US by carriers like AT&T and Verizon and it began around 2010. It started with AT&T and they announced it for their 3G users. And then in 2011, Verizon wireless followed suits. And then in 2012, you know, they, they just announced it and said okay, well now we have users-based pricing. Then in 2012, or 2011, 2012, they started to say, no actually we're not only allowing usage based pricing, but if you're on a flat rate we're going to start to cap your usage, right. So we're going to say if you consume above a certain amount, we're not going to really call it unlimited anymore, we're just going to make your connections speed really low. Then in 2012 AT&T and Verizon did something interesting, which we can call the switching voice and data. So what do you mean by switch? Well. They were really saying. We really want you to be on a usage based data plan, because that's what's really killing us right now. And we really need people to start paying for the data they're consuming. So they started to offer voice to be unlimited. And they. And they said if you accept data plans unlimited if you're an existing customer, we will give you unlimited voice, so accept limited data or usage-based data plan and you can get your flat rate unlimited voice in plan each month. So, this is really switching in a sense the the idea behind a cellphone, right. So now it's, it's more data centric, because initially we saw data as being a secondary application of voice, which is why voice was usage based and data was flat rate. But now that data is becoming usage based and voice is now allowing to be a flat rate plan, you really see that switch happening. And so you could argue, it's not necessarily the case, but you could argue that the the fundamental purpose behind having a cell phone is switching from voice to data.
