NNSquad - Network Neutrality Squad
[ NNSquad ] Re: Electrical Analogy for Peak-Demand Pricing
Rollie, I do a lot of work on power systems (and smart grids). A few points worth mentioning (in no particular order): 1) The marginal cost of electricity is quite non-trivial, unlike bits. 2) Electricity cannot easily be stored in scale. Bits can be delayed and/or retransmitted, within reason (based on the app) 3) The fungibility of electrons (electricity) is infinitely higher than bits - I only want to receive MY bits, which implies it is both a first mile and a last mile issue. 4) With electricity, reducing anyone's consumption, anywhere, helps the overall system. It is not as often the "last mile" (e.g., distribution transformer) is the bottleneck. 5) The actual uptake of off-peak or variable tariffs is quite low, usually limited to larger consumers or specialized programs by selected utilities. There are actually 2 types of pricings we might think of. First, what you write about, "interruptible" or "degradable" service (usage caps). The second is actually varying the tariff to incentive appropriate behavior, either through Time of Use or, (proposed) real-time pricing. We then come to more nuances, in terms of periodicity of tariff updates, and separation of Economic pricing and "critical" control pricing - the expectation is the former should suffice 99.x% of the time. 6) With electricity, the main bottleneck to doing more is lack of information, and hence the push towards smart meters as a step towards a Smart Grid. With the net, measurements are actually a little easier, BUT, I claim, we are not measuring based on true *marginal* scarcity (or at least that is hard to tell for outsiders. Marginal means both location and time. So, to summarize how I see this - very small degradations or tweaks at a very local level (wherever any bottleneck may be) for a short duration should fix the majority of problems. Of course, if the ISP builds for 1-2 Mbps usage, and people expect to download HD video regularly, then it might choke. The harder Qs with this are (1) what is the overhead and transaction costs; (2) To what extent should (or should not) application awareness and integration play a role? I am writing this sitting in India, where "peak" electricity is not met through (expensive) peaking units - it is met via load-shedding. Rahul On Sat, May 8, 2010 at 9:56 PM, Rollie Cole <rolliecole@gmail.com> wrote: > In addition to all the proposed new schemes for "time-of-day" pricing and > the like, we do have actual experience with "peak-shaving" pricing in the > electricity world. Large industrial firms that explicitly promise to allow > themselves to be "browned out" (service cut back) in peak demand periods get > a lower rate. I get a lower rate because I allowed my electrical provider to > install and operate a device that will cut back my air conditioning during > peak demand periods. > > So one could imagine a rough analogy to static and dynamic IP addresses. > Perhaps, as with IP addresses, the default is a the "brown-out" rate > (throttled when and if the network is congested). The difference I would > urge is that the details be as spelled out in advance as feasible, so > end-users could begin to adopt use patterns that would help reduce instances > of congestion -- ie, do heavy downloading or uploading at unusual times, > etc. > > Those who wanted the standard "consumer electrical" deal (i.e., "best effort > at all times, regardless of peak") could get it, just as those who need a > static IP can do so. > -- > Rollie Cole > 5315 Washington Blvd > Indianapolis, IN 46220-3062 > 317-727-8940 >