Unleashing The 'exaflood' - 02.22.08 - By Bret Swanson & George Gilder

Unleashing the ‘Exaflood’ By BRET SWANSON and GEORGE GILDER February 22, 2008; Page A15

Two decades ago, Sun Microsystems prophesied: “The network is the computer.” Today, BitTorrent video and 3D graphics flood the Internet, Apple iPhones tap the Net’s computing power, and PC-king Microsoft pursues Net-centric Yahoo. Sun’s mantra has become reality. But as the Internet booms and moves to the center of the global economic sphere, it draws proportional attention from politicians and regulators. In Congress and at the FCC, legislators and lawyers think they can manage overflowing Net traffic and commerce better than the network companies themselves. Next week, the FCC is meeting en banc at Harvard Law School to consider two petitions that seek to ban network “traffic management.” The meeting’s host, Rep. Ed Markey, has renewed his pursuit of a farreaching Internet regulatory regime known as “net neutrality.” These regulatory efforts overlook a fundamental shift: An upsurge of technological change and a rising tide of new forms of data are deeply transforming the Internet's capabilities and uses. The first phase of the Net was the original Arpanet research project that connected a few, and then a few thousand, scientists. The second phase brought the Internet to the masses, with the advent of the World Wide Web, the graphical browser and email in the mid-1990s. Internet traffic boomed 100-fold between 1994 and 1996. In the third phase of Net evolution, network architecture and commercial business plans reflect the dominance of rich video and interactive media traffic. The third wave is now swelling into an exaflood, or torrent, of Internet and Internet Protocol (IP) traffic. There’s YouTube, IPTV, high-definition images and “cloud computing”—in which individuals and businesses use the centralized computing resources of Google and IBM data centers, instead of the local computing resources of their own PCs or office systems. Not to mention the ubiquitous mobile camera. To give you an idea of the scope, an exabyte (a one-quintillion byte unit of information or computer

storage) is 50,000 times larger than a digitized Library of Congress. By the end of 2006, annual U.S. Internet traffic was around 10 exabytes. As new fiber-optic wireline and 3G wireless networks from AT&T, Verizon, Comcast, Cox and Cogent bring us real broadband for the first time, the nature and volume of Net traffic is changing dramatically. By mid-2007, Microsoft Video Calling was generating as many bytes as the entire Internet in 1997. Cisco’s newest video-conferencing system requires 15 megabits per second in each direction. A one-hour conference call could thus produce 13.5 gigabytes, which is more than a high-definition movie. Just 75 of these Cisco conference calls would equal the entire Internet traffic of the year 1990. Netflix, which is gradually moving from the post office to the Net, last year shipped 1.8 million DVDs every day. If converted to high definition, Netflix would have mailed 5.8 exabytes of motion pictures, or almost half the size of the entire U.S. Internet of 2007. Building on rapid advances in Nvidia and ATI graphics processors, one 3D multiplayer game (such as Second Life or World of Warcraft) with one million users could generate more than an exabyte per year of network traffic, or almost a tenth of last year’s U.S. Internet volume. __________________________________________________

The U.S. Internet will grow 50-fold by 2015. _________________________ In a new Discovery Institute report, we estimate that, by 2015, U.S. IP traffic will reach an annual total of 1,000 exabytes, or one million million billion bytes. The U.S. Internet will thus be 50 times larger by 2015, equal to 50 million Libraries of Congress. This will require some $100 billion in new Internet infrastructure in the U.S. over the next five years. We need a dramatic expansion in raw capacity, or bandwidth, and also fine-grained traffic management

capabilities to ensure robust service for increasingly demanding consumers. But none of this can happen if we regulate complex network traffic engineering and experimental business plans. All networks use some form of traffic management, whether crude or complex. As our colleague Ken Ferree notes, every industry, from grocery store “express lines” to “singles” ski-lift lines, attempts to shape and manage demand. Today’s communications networks buffer, label, parse, schedule, prioritize, route, switch, modify, replicate, police and meter the bits flowing through their links and nodes. New pricing schemes that charge per byte consumed might also help to manage supply and demand on the Internet. The petitions under consideration at the FCC and the Markey net neutrality bill would set an entirely new course for U.S. broadband policy, marking every network bit and byte for inspection, regulation and possible litigation. Every price, partnership, advertisement and experimental business plan on the Net would have to look to Washington for permission. Many would be banned. Wall Street will not deploy the needed $100 billion in risk capital if Mr. Markey, digital traffic cop, insists on policing every intersection of the Internet. Capacious, big-bandwidth networks will transcend many of today’s specific complaints. As raw capacity expands, more and more applications and users can peacefully coexist. But inevitably, sophisticated network users with innovative applications will find creative ways to push the boundaries of capacity on certain network links, and some bits will be shuffled and queued. The network is now a global computer made up of hardware, software and human minds. But this new, fast-changing and highly organic computer is no more easily regulated than were the circuits, storage, memory and protocols of a mainframe or PC. Leaving it to Washington agencies and committees to engineer the exaflood would be an act of unimaginable folly. Mr. Swanson is a senior fellow and director of the Center for Global Innovation at The Progress & Freedom Foundation. Mr. Gilder is a senior fellow at the Discovery Institute.