Can Bottlenecks Be Averted? Wrong Question!

ArsTechnica has a detailed piece out asking this question about the future of bandwidth, but really it’s the wrong question. Of course bottlenecks *can* be averted, the real question is: who will make oodles of money on it this time. The how is much easier than the who at the moment.

Yes, this time — because every few years we learn how the deluge of traffic from one source or another may soon bring the internet to its knees. And each time, somebody makes a killing when it gets solved. The problem is that it’s been a long time since it was the guys and gals doing the solving. When was the last time a service provider or equipment vendor went from challenger to dominant provider organically on the back of the traffic growth it found a way to satisfy?

Who has benefitted of late? Lately, it’s obviously been Apple. Other times over the past two decades it has been the likes of  Google, Akamai, MicroSoft, Yahoo, Cisco, and America Online. Those last two were the vendor and service provider that last managed the feat more than a decade ago. It hasn’t been AT&T or Verizon or their brethren overseas, much to their chagrin, who despite their size have been fighting a holding action for longer than they care to remember and grown mainly via consolidation.

*Can* bottlenecks be averted? Obviously it can. The infrastructure to supply the bandwidth of the next traffic deluge is easy. We need more fiber in more places, except where there is still lots of the dark stuff that’s viable in between the main cities. And we need equipment and business process that scale our ability to turn that fiber into bandwidth where it’s needed when it’s needed. Most of this we either know how to do already, and the rest is accessible via entirely reasonable technological development.

The question yet to be resolved is how the economics will work out this time.  Large service providers really, really want to be the ones that benefit from solving the next decade’s voracious appetite.  They want it so badly that they are basically suggesting they won’t do it this time if they don’t reap the benefits in a big way whether by charging over-the-top providers or whatever.

And while they do have a point, these larger telecommunications providers also get little sympathy because they’re already huge and few care if they don’t get even bigger. So they feel like they are on the hook for investments that the public already doesn’t actually want them to make too much money off of but for which they will be blamed if they don’t act on.  It’s something Google and Apple haven’t ever had to face.  Inheriting the last mile is in some ways both a blessing and a curse.

But on the other hand, smaller competitive providers are not unhappy at all about the prospect of a further bandwidth. The Zayos and Sideras and Level3s and tw telecoms of the world actually are out there solving the problem of bandwidth demand without complaining. They’re actually hoping that some of that exponential traffic growth is in the wings and that the incumbents will keep on feeling the way they do about investing too much in infrastructure so they can take over more of it.

Meanwhile the equipment vendors are always jockeying for position for the next generation of bandwidth demand of course.  The giants there must always be on their toes since incumbency only goes so far, as Alcatel-Lucent and Cisco have learned over the past several years from the likes of Huawei and others.  There will be new names amongst the leaders later this decade, I guarantee it.

Or will it be another gadget maker like Apple or content provider like Google that reaps the rewards this time?  That’s probably the safe bet given  the past decade, but I think maybe the pendulum is in the process of swinging somewhere else this time.  To the clouds perhaps?  A

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Categories: Internet Traffic