[CAnet - news] Internet to (almost) die in 2007

For more information on this item please visit my blog at 
http://billstarnaud.blogspot.com/
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 [Here is a couple of interesting articles in Forbes and the Wall St Journal
based on a Deloitte & Touche prediction that global traffic will exceed the
Internet's capacity as soon as this year.  I think there is general
consensus that we are going to see an explosion of video traffic over the
Internet because of exciting new applications such as Joost, Inuk, YouTube,
BitTorrent, Zudeo, etc and this will create a traffic jam over our existing
"dirt road" last mile networks of DSL and Cable (although in theory cable
will have a delayed reaction to this oncoming exaflood of traffic because of
its greater bandwidth capacity).  The need for higher speed optical networks
is ever more compelling in the last mile.  But the big question is how to
pay for it.  There are those on the right argue that network neutrality
requirements will inhibit carriers from making the necessary investments to
build fiber to the home and therefore broadband should be completely
deregulated in order for the carriers to prioritize certain types of premium
traffic. Those on the left argue that municipalities should be building
fiber to the home as broadband should be a basic infrastructure like roads
and sewers.

I think they are both wrong. If our experience in Ottawa is any guide,
cities do not move on Internet time when it comes to broadband deployment.
One of our condominium fiber contractors has been waiting over 9 months (and
still waiting) for a right of way permit to build low cost fiber to homes
and businesses in the Ottawa area. In any event the cost of building fiber
networks to all citizens would be prohibitive to most municipalities who are
already struggling under incredible debt and tax loads. However cities can
play a critical role by renting access to conduit as for example in Montreal
and Barcelona.

On the other hand I don't believe there will be any demand or business case
for prioritized traffic (with or without network neutrality), that will
justify the business case of fiber to the home for the carriers, despite
Verizon's FiOS rosy predictions.  With new services like Inuk, Joost,
AppleTV it is increasingly unlikely that the telco or cableco will be to
capture any portion of the video distribution value chain. That is why
several Wall St analysts have called for the carriers to recognize this
reality and to specialize in only providing the transport infrastructure.
But turning themselves into razor thin commodity transport providers will
provide little incentive or business case to deploy fiber to the home.

As such it is my belief, whether you are from the right or left,  we must
find entirely new business models that will enable the financing of the next
generation last mile networks in an open affordable way. An unfettered
private sector is the best way to develop such new business models and
services. Some exciting possibilities are starting to emerge such as
customer owned and controlled fiber (which has been extremely successful
with schools, hospitals and business), Green Broadband,  and in far off New
Zealand initiatives like CityLink and Inspired Networks in Palmerston. I am
sure there are other possibilities - but we need both research programs such
as GENI and FIRE to develop new architectures and clever business people not
tied to the myopic backward looking carrier world to explore these new
business models. Some excerpts-- BSA]




http://www.forbes.com/2007/01/30/info-traffic-jams-oped-cx_pk_0131network.ht
ml?partner=yahootix

Commentary
Information Super Traffic Jam
Phil Kerpen 01.31.07, 6:00 AM ETWASHINGTON, D.C. - 

A new assessment from Deloitte & Touche predicts that global traffic will
exceed the Internet's capacity as soon as this year. Why? The rapid growth
in the number of global Internet users, combined with the rise of online
video services and the lack of investment in new infrastructure. If
Deloitte's predictions are accurate, the traffic on many Internet backbones
could slow to a crawl this year absent substantial new infrastructure
investments and deployment.

Uncertainty over potential network neutrality requirements is one of the
major factors delaying necessary network upgrades. 

Without enormous new investments to upgrade the Internet's infrastructure,
download speeds could crawl to a standstill. It would be unfortunate if
network neutrality proponents successfully saved the rapidly aging,
straining Internet by freezing out the technological innovations and
infrastructure investments that would enable next generation technologies to
be developed and deployed.

One solution suggested by network operators is to prioritize traffic based
on service tiers and use revenue from content providers in the premium tiers
to subsidize the high costs of infrastructure deployment. The MoveOn.org
crowd denounces this solution for creating Internet fast lanes and
relegating everything else to the slow lane. But as the Deloitte report
shows, the likely alternative is that there will be only slow lanes,
potentially very slow lanes as soon as later this year. Call it the
information super traffic jam.

Advanced networks cost billions of dollars to deploy and need to generate
predictable revenue to make business sense. The infrastructure companies are
unanimous in their belief that offering premium services with guaranteed
bandwidth will be necessary for them to justify their investments.
Quality-of-service issues alone are likely to require tiering, because in a
world of finite bandwidth, people won't want high-value services like video
and voice if they can be degraded by the peer-to-peer applications of
teenage neighbors.

Craig Moffett of Bernstein Research told the Senate Commerce Committee last
year that any telecom company that made a major infrastructure investment
under a network neutrality regime would see its stock nosedive. Moffett
estimated that the bandwidth for an average TV viewer would cost carriers
$112 per month. A high-definition TV viewer would cost $560. Unless the
YouTubes and Joosts of the world are willing (and legally permitted) to pay
some of those costs, the investments are unlikely to happen.

If network neutrality proponents have their way the Internet may be frozen
in time, an information superhighway with Los Angeles-like traffic delays.
The Internet doesn't need to be saved--it needs to keep getting better.

Phil Kerpen is policy director for Americans for Prosperity.


The Coming Exaflood, by Bret Swanson, Wall Street Journal commentary
(1/20/07): 

Today there is much praise for YouTube, MySpace, blogs and all the other
democratic digital technologies that are allowing you and me to transform
media and commerce. But these infant Internet applications are at risk,
thanks to the regulatory implications of "network neutrality." Proponents of
this concept -- including Democratic Reps. John Dingell and John Conyers,
and Sen. Daniel Inouye, who have ascended to key committee chairs -- are
obsessed with divvying up the existing network, but oblivious to the need to
build more capacity.

To understand, let's take a step back. In 1999, Yahoo acquired Broadcast.com
for $5 billion. Broadcast.com had little revenue, and although its intent
was to stream sports and entertainment video to consumers over the Internet,
two-thirds of its sales at the time came from hosting corporate video
conferences. Yahoo absorbed the start-up -- and little more was heard of
Broadcast.com or Yahoo's video ambitions. Continued at:

http://online.wsj.com/article/SB116925820512582318.html?mod=opinion_main_com
mentaries




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