Analysis: Doubts linger over Internet traffic growth

Recent pronouncements of an increase in the amount of traffic being passed over the Internet are unfounded, leading to over-investment and a glut of unused fiber that will not need to be activated any time soon.

On Monday, equipment maker Caspian Networks publicized its findings that traffic is growing faster than ever, at a rate of four times annually through the first quarter of 2001. Claims to the contrary are fueled by speculation of the capacity of carrier networks, not the actual traffic they transport, said Lawrence Roberts, Caspian's CTO and founder.

But the fact that Caspian sells high-end networking gear and could thus benefit from a belief among customers that traffic is growing, points to another, more likely source of confusion: the lack of a standard mechanism for consistently reporting traffic, according to Alan Tumolillo, Probe's COO.

"I don't know what Roberts is trying to prove, other than to sell more gear," he said. "Absent [an industrywide reporting methodology], it's anybody's word as to [how much] traffic there is. "You don't know how much is double-counted, how much is missed, or how much is router update traffic versus end-user traffic. There's lots of ways of doing announcements [about traffic growth] that benefit carriers, but that may not indicate what's actually going on in their networks."

Tumolillo stopped short of accusing carriers of intentionally defrauding the public, but he also noted that the networking companies stand to benefit from the lack of credible information.

"Vendors and carriers are in a dance of death," he said. "[Vendors say,] 'You hype your traffic, I'll hype the traffic, and you'll buy my stuff because I'm going to say that traffic will grow tenfold every eight months.' The whole game is to attract notice in the stock market."

But that confusion could actually have the opposite effect on investors, because it hurts their credibility over the long term, Tumolillo said.

"No one believes [vendors] now," he said. "[Networkers] can say things to generate an IPO, or interest in their investment, or whatever it is that they're trying to accomplish. But it doesn't help the average investor, who doesn't have access to [traffic] information."

Tumolillo also questioned the logic behind reports of growing traffic, such as Caspian's.

"If traffic is growing so fast, why is everybody doing so poorly?" he asked. "Clearly, there's a lot more bandwidth than needed."

Indeed, Sprint Wednesday discontinued its ION (Integrated On-Demand) network, the converged multimedia service that was launched in early 1999. The cancellation will let Sprint slash 6,000 jobs.

A more responsible attempt to measure network traffic could mimic the one used by the telephone industry, which is collected by the National Exchange Carriers Association in Whippany, N.J., Tumollilo said.

"There is no excuse for carriers not to report traffic. If no one knows what their true business state is, then [they can say that] everything's fine," he noted.

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