Cornered!
Cornered! is a blog devoted, most of the time anyway, to telecommunications: local and global issues, technology, people and trends from the perspective of someone who's been reporting, analysing and commenting on the industry since the dark ages (BC - before competition). Sometimes serious, sometimes flippant, sometimes frivolous. Controversial, analytical, informative, amusing, but never boring; a vehicle for examinations of important issues and observations on my encounters and experiences in an industry where polarised views and hyperbole are the norm.

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Technology news and Jobs arrow Cornered! arrow Talking up the looming Internet gridlock
Talking up the looming Internet gridlock E-mail
by Stuart Corner   
Tuesday, 22 April 2008
An AT&T executive has made headlines by claiming that a global investment of $US130 billion will be needed in the next three years to stop the Internet becoming grid-locked, but he has no indication of how this investment will be funded, or even if a radical change in business models for Internet services will be needed. Perhaps he is simply scaremongering.

Jim Cicconi, vice president of legislative affairs for AT&T has been reported saying that at least $US55 billion worth of investment will be needed in new infrastructure in the next three years in the US alone and up to $US130 billion worldwide to increase the capacity of the Internet to meet anticipated traffic demands.

He's been quoted saying that "In three years' time, 20 typical households will generate more traffic than the entire Internet today." He also claimed that AT&T was investing $19 billion to maintain its network and upgrade its backbone network. The timeframe was not given so you get no idea how much of an increase on current investment levels this represents.

According to Cicconi it is video that is driving the need for this investment. "Eight hours of video is loaded onto YouTube every minute. Everything will become HD very soon, and HD is 7 to 10 times more bandwidth-hungry than typical video today. Video will be 80 percent of all traffic by 2010, up from 30 percent today." No surprises there, as I reported earlier this month.

Cicconi was speaking in London at a Westminster eForum on Web 2.0. And there were two things missing from his speech, or at least the report of it. There was no indication of what the financial impact on carriers will be in the absence of any change in the way Internet services are provided and charged for. He seems to be suggesting that they will all go broke rapidly. If that's the case what are carriers likely to do to fund this investment? There are really only two answers: start charging for broadband by the gigabyte like we do in Australia or put an end to net neutrality and start charging according to the type of content. CONTINUED



 
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