newsguy 30 The News Guy

Matthew Finnie is Chief Technology Officer at Interoute, the company which owns and operates the most densely connected voice and data network in Europe with more than 54,000 kilometres of lit fibre. So when he voices his concern that the Internet is facing some kind of meltdown, caused by the sheer scale of data being carried across it, and mentions a countdown to this brownout explosion that hits ground zero in 2010, you have to pay attention. When he adds that much of the problem is being driven by a reluctance on the part of many operators to actually invest in a business where they perhaps feel they have lost the value end of the service, well, your ears really prick up.

“There has a phenomenal rise in bandwidth in the past 3 years with the ever increasing growth of TV, music, social networking and commerce that pressure is only set to increase” Finnie told DaniWeb, continuing “We are seeing a doubling of data capacity from this year to next, going from 2.5 Terabits to more than 5 Terabits. It comes as shock to many access providers that the traditional rules of telecoms have been overturned by the Internet and many are frustrated at their inability to participate in the value to same extent as Facebook, Google and Myspace.”

Of course, bandwidth providers are enjoying what can only be described as a boom time on the back of all of this activity. The real issue can be found in the consumer delivery side or Internet on-ramps if you prefer. Operators need to adjust their business models to cope with the demands of being a bandwidth player or get out. The pressure on price per meg is only going to get harder.

“Today the access and bandwidth market has become like the hard disk market, we always pay the same amount, but continually expect more.” Finnie says “Those who are struggling to live in a world where the value is in “over the top” content have changed the technology but not the business model. Modern telecoms is about building multi-service platforms that you can scale over geographic areas to maximise economies of scale. We have deep fibre reserves (the raw material of the internet) so are able to keep pace with demand for bandwidth, but the value comes in building new services that can exploit the availability of low cost capacity.”

But surely if the on-ramps are struggling how can the backbone of the Internet cope as more and more bandwidth demands are placed on it. In light of the infamous bandwidth glut between 1999 and 2002 one has to ask what went wrong?

“During the telecoms market downturn, operators dramatically scaled back capacity expansion plans” Finnie reckons “went bust or simply walked away as there was not the business to justify lighting these networks. Seven years on and broadband penetration has created an explosion in demand. There is now a drastic need for investment in new systems and future growth is wholly dependent on new infrastructure. In reality many of the access providers are angry at having to deliver content to millions of users over their networks with little recompense for it.”

The truth, then, would seem to be that network operators have got to start thinking about how they want to truly participate in this bandwidth boom in order to aid the growth of the Internet. And not, as they are doing now, sit around moaning about it.