Internet Capacity Woes: Reaching the limits of cyberspace

INTERNET CAPACITY WOES: REACHING LIMITS IN CYBERSPACE
[SOURCE: CIO Update 12/29, AUTHOR: Allen Bernard]
Over the past year or so, the partners, researchers and senior managers in Deloitte & Touche's Technology, Media & Telecommunications (TMT) practice have been brainstorming about 2007 and beyond. Here's one prediction -- The unrelenting growth in Internet traffic in 2007 may overwhelm the Internet's backbone; the terabit-cable pipes connecting continents will reach capacity and ISPs will not be prepared to pay for extra bandwidth because consumers will be unwilling to pay increased costs. The threat to available capacity will be driven by the number of Internet users continuing to grow, and the exponential increase in the transmission of video files. This threat could raise questions about the long-term commercial viability of broadband provision, unless a satisfactory solution can be found to the issues of monetizing the growing usage to fund future growth, without disenfranchising customers. While this is probably not going to come to a head in 2007, these issues loom on the horizon because the investment in core infrastructure is not keeping pace with the usage and demand, said Eric Openshaw, principal and leader of Deloitte's America's TMT practice. The growth in demand for video delivered over the Internet in particular, one of Deloitte's other predictions, as well as IPTV, will be a major contributor to excess capacity being absorbed. "At the rate of growth of consumption at some point in time in the not too distant future, maybe it's not this year, but it's not in the too distant future, the excess capacity is gone," said Openshaw. "So somebody's got to step up and decide who is going to make the investments and who is going to pay for them."
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