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Is the Internet shrinking? Nonsense!

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Domain name registrations dropped for the first time in the history of the Internet during the fourth quarter of last year. Combined with high-profile dot-com failures, telephone company troubles and widespread layoffs, the domain name data prompted some analysts and media outlets to proclaim: "The Internet is shrinking!"

It's a great headline, but the "incredible, shrinking Internet" is a myth. By every measure of a network's health - users, connected systems, traffic and applications - the Internet continues to expand at an unprecedented rate. And corporate usage is prompting most of that growth.

"Corporate Internet traffic is not only growing, but growing exponentially," says Elliot Noss, CEO of Tucows, a Canadian domain name registrar. "As we continue to move toward multimedia . . . we're talking about continued exponential growth."

Despite the worst economic downturn in a decade, Internet growth during 2001 was strong in all areas:

  • The number of host computers connected to the Internet topped 137 million, up 40% over the 97 million recorded in December 2000.
  • Traffic on the U.S. portion of the Internet's backbone surpassed 55 petabytes per month, more than double the 23 petabytes recorded in January 2001. (One petabyte equals 20 million four-drawer filing cabinets full of text.)
  • The number of documents accessible over the Web doubled during the past 18 months, surpassing 3 billion.
  • The number of U.S. adults connected to the Internet rose 5%, with 62% now connecting to the Internet at least three times in the past three months.

Internet experts see no end in sight to the network-of-networks' sprawl, especially in light of the new mobile devices hitting the market and the increasing popularity of broadband services.

"All I see is continuous, smooth growth," says Aristotle Balogh, vice president of engineering at VeriSign Global Registry Services, which handles all the look-ups for the .com, .net and .org domains. VeriSign saw its average daily traffic hit 4.6 billion queries in the third quarter of 2001, more than twice the 2.1 billion queries seen a year earlier.

"As more [handhelds] that can access the Internet are available, it's conceivable that the rates will continue to grow like this for the next three to four years," Balogh says. "By 2005, we expect 100 billion look-ups a day."

As the Internet gets larger, the percentage of growth in some areas is naturally slowing. And consolidation of Web sites and carriers is expected. But overall trends remain strongly upward.

"The Internet is still growing at 40% [annually for hosts]. . . . I'd take that as a healthy growth rate," says Dave Sincoskie, vice president of Internet architecture research at Telcordia, which tracks the number of host computers connected to the Internet."

The Internet's unstoppable spread comes as no surprise to network executives, who are struggling to meet their users' insatiable demand for Internet bandwidth and applications.

"We can never give our users enough [bandwidth]," says Jon Dolan, network engineering manager for Oregon State University, which supports 24,000 students and employees.

Oregon State leases two DS-3 lines, which offer a maximum bandwidth of 90M bit/sec. Oregon State uses a traffic-shaping device to restrict inbound Internet traffic to 22M bit/sec, up from 18M bit/sec a year ago. Oregon State sets no limits on outbound Internet traffic, which has exceeded 45M bit/sec on peak days.

"We took it to 22 megabits, which was all we could afford," Dolan says. If money wasn't a limiting factor, "we could easily drive 100 megabits."

Arlington Industries, a Libertyville, Ill., distributor of imaging supplies, saw its Internet traffic surge 25% in 2001. The company leases a T-1 line, half of which is dedicated to Internet traffic, while the other half carries frame-relay traffic. Internet traffic is growing even though the company restricts Internet access for its 150 employees to about 100 work-related Web sites.

What's spurring the rise in Internet traffic is the availability of new Internet-based applications, says net administrator Chris Kozlov. The company now offers VPN access from home and on the road, as well as Internet-based virus checking and credit reporting services. It also expanded its intranet with Web pages that point to hundreds of files.

With so much anecdotal and statistical evidence pointing to the Internet's continued growth, how did the shrinking Internet myth get started?

The first indication was a November report from SnapNames that showed the number of domain names registered in .com, .net and .org was declining. SnapNames reported domain name registrations peaked at 30.6 million in September 2001, dropping to 30.5 million in October and 30.2 million in November.

Market researcher Netcraft followed a few weeks ago with a report showing that the number of Web sites was declining along with domain name registrations. Netcraft said the number of Web sites fell by 182,142 from November to December, leaving a total of 36.2 million sites.

What appears to have happened last fall is many speculators who bought domain names in late 1999 did not renew their two-year registrations. Most of these names had one Web page attached to them - called a parking page - that announced the availability of the name for resale. So these names not being renewed doesn't necessarily mean fewer active Web sites.

"A lot of people were speculating on domain names and never using them. The number of unused domain names is what's shrinking," says Paul Mockapetris, chairman of Nominum, which creates software that runs on most of the Internet's domain name servers. "The number of names actually being used and the amount of traffic are continuing to go up."

Despite the recent decline in registrations, domain name registrars remain optimistic about the outlook for renewals and sales, particularly in new domains such as .info, .biz and .name.

Tucows' Noss predicts that domain name registrations will grow more than 10% in 2002.

"We expect pretty aggressive growth through 2005," Noss says. "People's use of the Internet is getting deeper and deeper. People sharing photos tracks to domain names. People sharing music tracks to domain names. People sharing e-mail tracks to domain names."

Indeed, VeriSign continues to report record-breaking domain name system queries. Most of the DNS traffic is corporate, with peak traffic as high as 13 billion look-ups per day coming during U.S. business hours, Balogh says.

Internet growth chart

Corporations also drive overall U.S. Internet backbone traffic, which has grown nearly tenfold in the past two years from 6 petabytes per month in January 2000 to 55 petabytes per month today. Among the applications driving corporate traffic are VPNs, telecommuting, videoconferencing and voice over IP.

"Enterprises that used to try to put their own T-1s to branch offices are now moving ever more to using virtual networks on top of the Internet or using the Internet directly," says John Quarterman, CTO of Matrix Net Systems, which sells Internet performance-monitoring tools. "That phenomenon hasn't slacked off."

AT&T has seen traffic on its IP network triple every year for the past three years.

"More enterprises are moving applications to the 'Net, and we'll continue to see that over the next couple of years," says Rose Klimovich, AT&T director of global IP network services. "We're seeing bigger sites with more traffic."

Most information on the Web comes from corporations, too. Marissa Mayer, product manager for search engine, estimates that half of the Web's 3 billion documents are on corporate Web pages. She says this number is growing quickly. "I don't expect it to taper off in 2002," she adds.

On the horizon is broadband access, which is a major multiplier for Internet traffic. Individual users typically increase their bandwidth 20 times when they migrate from a dial-up line to DSL or cable modem service.

Meanwhile, the number of broadband users is growing. Today, 11 million North American homes have broadband access - DSL or cable modem service - up 114% in the past year, according to Kinetic Strategies.

"When you see DSL sales have gone up by 3 or 4 million, that's like adding 80 million dial-up customers," Telcordia's Sincoskie says. And broadband access drives usage of bandwidthintensive applications, particularly video.


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