Your Bandwidth to Energy Ratio

When you have a moment, take the time and add up your monthly bandwidth bill. Be sure and capture the total bandwidth space – cable, mobile phone, Internet, and telephone services. The figures may vary wildly across the various demographic groups in the United States. Several different sources have estimated that by the end of 2010, Americans will spend an average of $83 a month on cable, phone, and Internet services, up from $64 in 2004. Roughly $332 per month for a family of four.

With a proliferation of add-ons to the basic three-in-one bundle, the national average of $332 per month may seem low nor is it an accurate predictor of the future. Service providers, such as Comcast, offer 450 channels plus 5,000 HD movies on demand for $708 per month (in addition, they have multiple ethnic options in which one can add the Polish Super Pack for a mere $19.99 a month). We also have the true outliers – the kid that checked his e-mails via his iPhone while on a cruise. Mom and dad got a bill for $4,800.

Next, add up your energy bill - - house, apartment, transportation - - be sure and capture your total energy space like you did with the bandwidth space. Then compare the two categories and calculate your “Bandwidth to Energy Ratio.” This may be interesting to people – in some cases bandwidth costs may exceed energy costs. Keep an eye on this cost ratio – we not only love our cars and air conditioners, but we also love our smart phones and Internet television.

Both bandwidth and energy resources are very similar – not only from the demand side where the global population seems poised to demand greater and greater access and consumption from these two resources. But also from the supply side – where both industries are run as oligopolies. We have all seen the impact of tight supplies and limited distribution capacities in the case of gasoline. A bandwidth shortage occurs at any point when the demand to move information exceeds the capacity of the distribution channel. What happens when all those iPhone and iPad users in New York City want to watch college basketball online? Anytime you have traffic jams or bottlenecks in a supply chain – when demand exceeds supply – look for higher prices. As demand for bandwidth goes up, suppliers will logically be able to charge more, as happens in energy markets.

The future may be about watching your Bandwidth to Energy Ratio.