Internet Traffic Continues to Grow, Despite the Glut

Much has been made of the so-called “bandwidth glut” and the supposed lack of traffic making its way around the Internet. But one of the Net’s founding fathers has stepped up with what he calls proof the Internet is growing faster than ever before.

Dr. Lawrence Roberts, who led the team that designed and developed ARPANET [definition], which evolved into the modern Internet, found the Internet is not shrinking, nor does it appear to be slowing yet in its growth. In fact, measurements by Roberts and his research team suggest traffic on the Internet has been increasing as much as an unprecedented four times annually through the first quarter of 2001.

Roberts’ data shows traffic (which in this case means data traveling the Internet, not just traffic to Web sites) has been doubling every six months on average cross core IP service providers’ networks, or in other words, growing by four times annually. This is an even faster rate of traffic growth than the average of 2.8 times per year carriers had been experiencing across the core since the Internet began growing aggressively in 1997, spurred by mainstream interest in the Web.

“There’s been a lot of supposition and educated guessing, but remarkably little actual data on what’s been happening at the core of the world’s networks,” said Roberts, who is now the founder, chair and CTO of Caspian Networks. “The National Science Foundation used to track U.S. Internet traffic, but stopped in 1996. Our work is the first scientific study quantifying Internet traffic across the leading carriers since then.”

Roberts’ findings run counter to many networking vendors, analysts and media, which have maintained the growth rate of Internet traffic has slowed recently. But Roberts insists that none of these reports are based on scientific evidence. Part of the confusion, he said, appears to stem from statements and speculation on the capacity of carrier networks, not the traffic across them. Other reports have confused growth in carrier revenue with growth in traffic, or assumed a direct relationship between the two.

The research is based on special access Roberts received to top scientists at the leading data carriers. Beginning last year, he and his team obtained nondisclosure agreements with the top 19 data carriers and began the process of polling them for their network topologies, trunk utilization and traffic. Network traffic was sampled in April, 2000, October, 2000 and April, 2001.

The “bandwidth glut” is the term used for the vast capacity of networks, much of which, some reports say, isn’t being used. Simple laws of supply and demand dictate that carriers drop the price of the bandwidth to encourage buyers, which at the same time makes it difficult for carriers to recoup the cost of building the networks. Naturally, that spells trouble for the carriers.

Earlier this year, research group TeleGeography predicted in its report “International Bandwidth 2001” that in 2002 the supply of trans-Atlantic bandwidth will total 3,494 Gbps. Even if Internet backbones quadruple in size, and other networks experience double-digit growth, TeleGeography found that bandwidth deployed by carriers and ISPs will amount to only 532 Gbps. In other words, used bandwidth will account for less than 20 percent of estimated supply.

But Roberts and his team aren’t the only ones who think there is plenty of opportunity left for companies that carry data traffic over the Internet. According to a report by Analysys, revenues from carrying data traffic over the Internet Protocol (IP) backbone network are set to increase 20-fold over the next five years.

Analysys forecasts that the global market for IP carrier services may be worth as much as $225 billion by 2006. And despite the current economic downturn, Analysys foresees IP carrier revenues growing steadily during 2001 and into 2002, with a marked upturn from 2002 to 2006 as demand for broadband services increases.

“The IP backbone market offers a great opportunity for carriers despite the high profile market casualties (iaxis, Project Oxygen and AduroNet) and disappointing results from a number of players,” said Tamsin Pert, Analysys analyst. “Carriers that can survive the next year or two, and resist engaging in price wars, will be in a strong position to reap the rewards of their investment.”

And what price wars they are. The price of bandwidth fell by as much as 70 percent on some routes during 2000, but the sheer volume of traffic will drive revenues upwards for operators, Analysys found. Transatlantic traffic alone is expected to grow eight-fold by 2002 and between 2000 and 2006 will exceed 50 Tbit/s.

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