Two stories in the news point to the growing stress the communication age is putting on our infrastructure. According to ABI Research, cable providers could be approaching a crisis in capacity in their last-mile systems. As video on demand, online gaming and high definition television eat up more and more capacity, customers may find themselves on the slow end of a battle with their neighbors for packet priority. An analogy might be the line that would form at the only well in a neighborhood where everyone is putting in pools.
Others question whether the tubes of the internet's backbone are large enough to serve the dramatically increasing call on them. Total capacity usage is roughly doubling every two years. Cisco Systems (NASDAQ: CSCO) estimates it will reach almost 8 million terabytes per month by 2011.
The Wall Street Journal (subscription) quotes an analyst at Deloitte Touche Tohmatsu as speculating the internet could be approaching its capacity, although this is not a widely accepted view. Some are concerned the providers of that architecture may not have sufficient monetary incentive to make the investments necessary to keep the electrons flowing unimpeded. Of course, they suggest that everyone enjoying the use of the system should kick back a little monetary love for the access.
We also are witnessing wrestling matches over the increasingly-crowded prime frequencies of the electromagnetic spectrum. As companies such as Google (NASDAQ: GOOG) vie for the soon-to-be-abandoned television frequencies so they can jump into wireless internet access, cellular providers like Verizon (NYSE: VZ) lust after them to reduce the cost of network maintenance and expand their package of products.
We'll keep you up to date on these issues; while arcane, they could have huge implications on the business models of today's top technology stocks.
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Reader Comments (Page 1 of 1)
9-28-2007 @ 11:28AM
John From Cincinnatii said...
This story is the biggest load of hooey I have ever seen. It is the liberal media picking-up and running with the ball the two big players Verizon and AT&T have given them. These companies want to destroy Internet neutrality. There is no "Internet backbone" that exists, as if it is provided by one company. The backbone of the Internet is made up of at least 15 companies individual networks. If one of them fails to carry the traffic the others get your traffic to the destination. I can tell you that all these companies want to save money, but they fear their biggest customers complaining about service and leaving even worse. So they invest in infrastructure. Except maybe the cable TV companies. Traffic management and capacity planning are a huge deal in the Internet industry. THE backbone is not going to run out of capacity. What a load of hooey.