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Broadband Internet Crunch is Beginning to Occur

Internet demand remains at a rate which could outpace capacity within the next two to four years, according to “Internet Interrupted: Why Architectural Limitations Will Fracture the ‘Net,” a new report today from Nemertes Research. The research is a follow-up to last year’s study “The Internet Singularity, Delayed: Why Limits in Internet Capacity Will Stifle Innovation on the Web.” Similar to findings in 2007, evidence compiled by Nemertes over the past year continues to point to increasing strain on the Internet’s infrastructure and that by 2012, this infrastructure may not be able to accommodate the exaflood, resulting in internet brownouts.

The Internet exaflood, or exponential explosion of online content, resulting largely from new applications, video and increasingly heavy Web use, is causing slower responses and time outs—and ultimately may trigger an “innovation slowdown,” according to the study. If left unaddressed, the development of next generation applications, from software to interactive video, will likely be stifled as users find Internet infrastructure incapable of efficiently delivering quality content.

“We still project demand to exceed capacity at the access layer of the Internet by 2012, and the situation is slightly worse than we originally projected in North America,” said Dr. Mike Jude, senior analyst, Nemertes Research.

The financial investment required to bridge the gap between demand and capacity remains in line with Nemertes Research’s estimation in 2007, ranging from $42 billion to $55 billion in the U.S., to be spent primarily on broadband access capabilities. This figure is roughly 60-70 percent above and beyond the $72 billion service providers already plan to invest. Global investment required is estimated at $137 billion.

The study discusses how a recession could affect bandwidth supply and demand, as well as capital investment in network infrastructure saying “it’s clear that a credit crunch puts pressure on telecom companies.”

“The exponential explosion of content will persist during challenging economic times, but a prolonged global recession could starve networks of the necessary capital investment,” said Bruce Mehlman, co-chair of Internet Innovation Alliance. “It’s more important than ever to develop a National Broadband Strategy that will encourage investment and innovations that accelerate America’s global competitiveness and address major national challenges, such as energy efficiency, health care cost and quality educational opportunity.”

Additional Sources

To read the complete study from Nemertes Research, “Internet Interrupted: Why Architectural Limitations Will Fracture the ‘Net,” click here. Also see the official press release discussing some the findings related to challenges faced in the logical layer of the Internet as well as the physical layer.

By CircleID Reporter

CircleID’s internal staff reporting on news tips and developing stories. Do you have information the professional Internet community should be aware of? Contact us.

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Let me guess wolfkeeper  –  Nov 25, 2008 5:32 PM

The telecoms manufacturers paid for this study?

How would not having enough bandwidth be a bad thing for the ISPs anyway? They’d be forced to charge more and make more profit. Oh dear.

And I’d like to know how this fibre shortage could even work, when the demand apparently crosses the access lines capacity in 2011.

And these curves are highly speculative. Beyond a certain amount of bandwidth the curve should flatten. A few feeds of high definition TV is probably about the most most people want, and what takes more bandwidth than that? The curves are assumed to be exponential, but in practice that never goes on forever. I think we’re close to a point where demand levels off quite a bit.

Guess Again Ted Ritter  –  Nov 25, 2008 8:05 PM

You raise an excellent point on fiber.  We actually state that there is plenty of unlit fiber in the ground to support projected demand on the backbone and metro areas.  The shortfall is in the access layer where, for example, in the US less than 2.5% of all access lines are fiber.  Also, we assert that demand grows at an increasing rate.  As an example, even four years ago it was hard to imagine exceeding 250 gigabytes per month and we are already seeing that today.  Finally, we want to make it clear that all Nemertes research is independent and not funded by outside sources.  If you have any questions, please feel free to contact me directly.
Ted Ritter
Nemertes Research
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