Press Releases

WASHINGTON, D.C. – November 19, 2008 – Internet demand remains at a rate which could outpace capacity within the next two to four years, according to “Internet Interrupted:  Why Architectural Limitations Will Fracture the ‘Net,” a new report today from Nemertes Research.  The research is a follow-up to last year’s study “The Internet Singularity, Delayed:  Why Limits in Internet Capacity Will Stifle Innovation on the Web.”  Similar to findings in 2007, evidence compiled by Nemertes over the past year continues to point to increasing strain on the Internet’s infrastructure and that by 2012, this infrastructure may not be able to accommodate the exaflood, resulting in internet brownouts.

The Internet exaflood, or exponential explosion of online content, resulting largely from new applications, video and increasingly heavy Web use, is causing slower responses and time outs – and ultimately may trigger an “innovation slowdown,” according to the study.  If left unaddressed, the development of next generation applications, from software to interactive video, will likely be stifled as users find Internet infrastructure incapable of efficiently delivering quality content.

“We still project demand to exceed capacity at the access layer of the Internet by 2012, and the situation is slightly worse than we originally projected in North America,” said Dr. Mike Jude, senior analyst, Nemertes Research.

The financial investment required to bridge the gap between demand and capacity remains in line with Nemertes Research’s estimation in 2007, ranging from $42 billion to $55 billion in the U.S., to be spent primarily on broadband access capabilities. This figure is roughly 60-70 percent above and beyond the $72 billion service providers already plan to invest. Global investment required is estimated at $137 billion.

The study discusses how a recession could affect bandwidth supply and demand, as well as capital investment in network infrastructure saying “it’s clear that a credit crunch puts pressure on telecom companies.”

“The exponential explosion of content will persist during challenging economic times, but a prolonged global recession could starve networks of the necessary capital investment,” said Bruce Mehlman, co-chair of Internet Innovation Alliance.  “It’s more important than ever to develop a National Broadband Strategy that will encourage investment and innovations that accelerate America’s global competitiveness and address major national challenges, such as energy efficiency, health care cost and quality educational opportunity.”

The research will be discussed today at the IIA National Broadband Strategy Symposium at the Press Club in Washington, DC. The event begins at 8:30 a.m. ET.  To watch a live webcast of the Symposium, link to www.visualwebcaster.com/BroadbandSymposium.  A webcast replay will be available after the event.