TAILIEUCHUNG - Internet tra±c growth: Sources and implications

The high tech bubble was in°ated by myths of astronomical Internet tra±c growth rates. Yet although these myths were false, Internet tra±c was increasing very rapidly, close to doubling each year since 1997. Moreover, it continues growing close to this rate. This rapid growth re°ects a poorly understood combination of many feedback loops operating on di®erent time scales. Evidence about past and current growth rates and their sources is presented, together with speculations about the future. The expected rapid but not astronomical growth of Internet tra±c is likely to have important implications for networking technologies that are deployed and for industry structure. Backbone transport is likely. | Internet traffic growth Sources and implications Andrew M. Odlyzko University of Minnesota Minneapolis MN USA ABSTRACT The high tech bubble was inflated by myths of astronomical Internet traffic growth rates. Yet although these myths were false Internet traffic was increasing very rapidly close to doubling each year since 1997. Moreover it continues growing close to this rate. This rapid growth reflects a poorly understood combination of many feedback loops operating on different time scales. Evidence about past and current growth rates and their sources is presented together with speculations about the future. The expected rapid but not astronomical growth of Internet traffic is likely to have important implications for networking technologies that are deployed and for industry structure. Backbone transport is likely to remain a commodity and be provided as a single high quality service. It is probable that backbone revenues will stay low as the complexity cost and revenue and profit opportunities continue to migrate towards the edges of the network. Keywords Internet traffic growth network economics telecom industry structure QoS 1. INTRODUCTION The telecom crash and current depression were the result of the irrational exuberance of the late 1990s. Technology did meet the demands posed on it by business plans. The problem was that those business plans had been formed in willful ignorance of actual demand. The Internet simply did not grow as fast as had been predicted. Because of a misunderstanding of what customers wanted the whole industry crashed in spite of its technical excellence and plentiful capital expenditure. This paper takes a high level view of the Internet considering its economics and the needs it serves. Customers have no interest in the separation of TCP from IP whether the Reno or the Tahoe variant of TCP is used whether ECN is employed and so on. Those are all very important technical questions but users almost universally do not wish to be .

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