Internet service providers love to talk about how much traffic is rapidly increasing by the year and how they'll either need to charge more or create a different business model for it. Even Time Warner is running a test in Beaumont, TX to meter internet use and charge by usage.
But the claims by cable companies and other service providers may be overblown. Researchers at the University of Minnesota have released data showing that traffic growth is actually slowing.
In spite of the widespread claims of continuing and even accelerating growth rates, Internet traffic growth appears to be decelerating. In the United States, there was a brief period of "Internet traffic doubling every 100 days" back in 1995-96, but already by 1997 growth subsided towards an approximate doubling every year CO1998, and more recently even that growth rate has declined towards 50-60% per year.
They called out Cisco (and I hate to do this since a friend works there), whose CEO said they were experiencing 100% growth, while their white papers said they were experiencing 50% growth.
The natural conclusion by ISPs has been that increased traffic means increased costs. But researchers say not so fast:
Traffic volumes are a very crude measure of the state of the Internet. Investment is driven by profits, and those have only a slight relation to traffic.
Still, the cable companies clearly want to go after internet companies like Google, who stepped on their turf by offering TV ads. They've even been collaborating on "Project Canoe," designed to create a national advertising platform as an alternative to Google.
But when it comes to the internet, innovation is almost always the route to beating the competition. The cable companies are trying to keep consumers in the past, but they won't win that game.
What do you think of this data? Are ISPs trying to pull a fast one on us? Sound off in the comments.
via Ars Technica
Introducing... ClickZ Live!
SES Conference & Expo has merged with ClickZ to bring you ClickZ Live! The new global conference series takes on the identity of the industry's premier digital marketing publication, ClickZ.com, and kicks off March 31-April 3 in New York City. Join the industry's leading tech-advertisers in the advertising capital of the world! Find out more ››
*Super Saver Rates expire Jan 24.