EXAmine This: A Growing Gap in Capacity Demand and Bandwidth Supply?

So, Bret Swanson of the Discovery Institute gives this debate a name (i.e., "exaflood") in his Jan 2007 Wall Street Journal editorial, entitled The Coming ExaFlood. As you read this article (and the others on this post), you pretty quickly realize there is a political agenda here, as there usually is when we talk about coming shortages and the need for a change in public policy (and/or government spending???).

The key point driven home in this fascinating keynote panel discussion was that not one, but several signs indicate a growing issue, if not a coming crisis. I guess that depends on your viewpoint, whether it's an issue, a crisis, or a market opportunity. Guess which one I prefer?

The sign posts are certainly there that something big is coming down the tubes (pardon the puns, henceforth). The signs include:

1) the dramatic growth in Internet traffic to date;
2) the growing popularity of high-bandwidth applications like YouTube and P2P music file trading, not to mention High Definition Video; and
3) the (relatively) slow growth in building out both the Internet core backbone transport network and most especially, the outer edges of the network, the individual Local Area Networks (LANs) and Metropolitan Area Networks (MANs) - alternately referred to as the Last Mile - (telecom speak) (or, the First Mile - consumer speak).

I believe those three main constraints are not in dispute. What's in dispute is how those constraints should best be addressed, and whether this phenomenon constitutes a crisis or not. Advocates of Net Neutrality tend to argue in favor of flat pricing for access and separation of infrastructure ownership and/or management service from content delivery service (structural unbundling). Opponents of Net Neutrality argue for continuation of status quo vertical integration, variable pricing options to ensure quality of service and network management flexibility and little-to-no regulation to ensure adequate / abundant revenue to finance network construction. There is significant distrust on both sides of the argument, and lots of history.

But back to the approaching shortage of bandwidth - if you buy this scenario - it reminds me a little of debates about the coming oil shortage as we approach Hubbert's Peak, which of course is a widely discussed theory about approaching finite limits of oil production on the planet. Or projections of world population growth and coming shortages and famine - see also the Limits to Growth by the Club of Rome and Thomas Malthus. But the difference is that while the Club of Rome's projections of disaster and calamity have been proven wrong (so far), and Hubbert's Peak remains an unknown (so far), the ExaFlood dilemma seems more immediate and real, and it can be seen as manageable, at least it is, IMHO.

My Bottom Line

The ever growing demand for bandwidth is quite real, but I also believe that it can be incremental and need not be a crisis, but we will need much greater attention and more creativity. This scenario makes a strong argument on all sides to build out real broadband infrastructure (100 Mbs - 1Gbs) ASAP. That means fiber in all its forms - nothing else will get us those speeds and be truly future-proof, or in this case, Exa-Ready. And it means letting go of limiting the number of players in the infrastructure business. We need more energy and creativity to accomplish this Herculean task.

And that is the thrust of conferences like this one, I believe, to raise the hue and cry and get people motivated and busy. This is a project no less exciting than building the railroad network was in the 19th Century. I would add that we should be building out broadband networks, both wired and wireless, as robustly as possible. Given these trends of exploding data needs, most especially the growing popularity of video applications in all their forms, we are at little risk of overbuilding (certainly out on the edge we are not), and we will see an unending need for bandwidth in the foreseeable future. We have a long way to go, but we are up to the challenge if we open our minds to new approaches.

Drowning in the ExaFlood gives an interesting counterpoint to this suggestion of a coming "flood" of data transmission shortage. Tim Lee makes the argument that we are talking less of a "flood" of bandwidth shortage and more of a simple extension of the continuing need for telecom firms to build out their infrastructure and the rationale for government to get out of the way (of course, author Tim Lee is a fellow at the Libertarian Cato Institute, so he would think along those lines.) Still, I recommend you bookmark Tim's website The Technology Liberation Front. I especially enjoyed the artwork with Communist overtones, very 1980s Gorbachev and all that...

Finally, see also Bring On The Exaflood by Bruce Mehlman, former assistant secretary of commerce under President Bush, and our own Larry Irving, former assistant secretary of commerce under President Bill Clinton. These guys should know what they're talking about. Oh, and they are both currently co-chairmen of the Internet Innovation Alliance.

I'll give them the last word here:

All sides agree that we need ongoing investment in content, massive upgrades of infrastructure and relentless innovation to handle the phenomenal growth in data traffic. We need advancements in how we build and operate networks, including new file compression technologies, upgraded traffic management software, better spam and virus filters, and new delivery platforms. And we need substantial investments in short-haul bandwidth through fiber to homes, broadband over power lines, satellites and fourth-generation wireless networks.

The formula for encouraging such extraordinary investments is clear: minimize tax and regulatory constraints and maximize competition. Policymakers across the nation have ample opportunity to implement this blueprint right away. They should pass common-sense legislation such as permanently extending the Internet tax moratorium, building broadband-ready public housing, and cutting depreciation schedules for network equipment and infrastructure.