$137 billion investment required by 2010 to close gap between growing demand and broadband access capacity

Consumer and corporate Internet usage could outstrip network capacity worldwide by 2010 according to a recent Nemertes Research Study.

The required investment globally to bridge the gap between demand and broadband access capacity is estimated at $137 billion.

This is roughly 60-70 percent above and beyond what service providers are already planning to invest.

The study indicates that by 2010, the Internet’s capacity will not likely accommodate user demand.

As a result, users could increasingly encounter Internet brownouts or interruptions to the applications they’ve become accustomed to using on the Internet.

For example, it may take more than one attempt to confirm an online purchase or it may take longer to download the latest video from YouTube.

"This is the first study to independently model both Internet capacity and demand," said Johna Till Johnson - president and senior founding partner of Nemertes Research.

"The Internet is inherently self-protecting -- you can’t push more traffic onto the ‘Net, than it can handle."

"This means that studies which focus just on growth rates of existing traffic on the Internet miss the issue of how much more traffic could be appearing on the ‘Net -- based on the measured demand by business and consumer users -- if Internet capacity were sufficient to accommodate it."

This being the case, the Internet should be showing stress even now (since in any network environment, long before demand reaches a utilization threshold on a sustained basis, there are isolated episodes during which it spikes above that threshold).

Cisco disagrees with the study by Nemertes Research:

"Because their business is the ‘Net, it’s in the service providers own interest to get ahead of this trend," said Doug Webster - Cisco Director of Strategic Communications for Worldwide Service Provider Marketing.

"We’re seeing a number of service providers doing that. AT&T is doing a large core build out. Savvis is doing the same thing. XO Communications is doing that."

"We’ve seen a trend among service providers, not just the largest, but emerging providers and those in emerging markets, they are getting ahead of it."

One obstacle to investment has been the ‘Net neutrality debate according to many service providers, who claim to be unsure about whether they will be allowed to recoup investments made to have robust bandwidth at the Internet’s on-ramp.

"All those public policy issues have gummed up the pure business decision about how to invest in the access area," said Dr. Mike Jude

"I think the public policy debate is potentially retarding investment in that area."

$137 billion, is it possible the ever optimistic John Chambers has in reality been sandbagging us?

http://www.BradReese.Com

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