Deloitte’s Puzzling Prediction on Internet Congestion in 2007
Posted by David Mayer on May 22, 2007
Internet backbone is likely to run out of capacity in year 2007 is among the 2007 Telecommunications Predictions  brought by Deloitte Touche Tohmatsu, an analyst company, writes Greg Goth in this month’s IEEE Internet Computing magazine article “More Online Video Rekindles Network Capacity Debate” . Greg Goth presents the findings of Deloitte Touche Tohmatsu concerning the growth of Internet traffic and the chances of running out of capacity. This is put in contrast to the opinions of 4 Internet insiders. They all happen to contradict Deloitte’s prediction. In this article we will try to find out who is closer to the truth.
Let’s quote here Deloitte’s key statements in :
The Internet is often regarded as an infinite resource. Unfortunately, this is not the case; and in some parts of the world, its use may approach the total available capacity in 2007.
And in large print:
The unrelenting growth in Internet traffic during 2007 may overwhelm some of the Internet’s backbones: the terabit-capable pipes connecting continents.
Should this prediction be taken seriously?
I don’t think so, for 2 reasons. First, the Internet insiders questioned in Greg’s article all happen to oppose Deloitte in their predictions. Secondly, I find it hard to accept the validity of the main arguments the Deloitte group use to deduce their conclusion.
First let’s see who the 4 Internet insiders are and what they have to say about major backbones running out of capacity :
|Brian Washburn||Principal analyst at Current Analysis||Capacity scarcity is an issue of the core network, where it is easy to add capacity thanks to modern fibre optics. Internet would have to grow by several more orders of magnitude for optics to become outpaced.|
|Robert Rosenberg||President of telecommunications analysis firm Insight Research||There is huge capacity glut on the long haul.|
|Andrew Odlyzko||Former AT&T researcher, Director of Digital Technology Center, University of Minnesota||“Long-haul routes are in no danger of becoming swamped” and “There’s a huge deficiency in the final mile.”|
|Glen Russo||Vice president of wholesale markets for tier-1 carrier Level 3||No glut, but no shortage either.|
All seem to contradict Deloitte’s findings.
But let us see how Deloitte arrived at its conclusion. In their report  we find they present 2 major arguments: the first is that the number of users will grow over 1 billion. But we do not get to read whether this is an exceptional surge or the usual rate of growth.
“The second, more important factor is video. Over a third of all Internet traffic in 2007 is expected to be in the form of mostly illegal, peer-to-peer video.”
But how does this relate to congestion? Presumably, illegal peer-to-peer video is not a real-time transmission, hence it will run at the same rate as the exchange of music files or text files. Of course, with the number of p2p users growing, the total bandwidth consumed grows, but that has little to do with p2p video.
The only concrete and numerical presented argument seems to be that
“The volume of traffic flowing over the world’s largest Internet hub, the Amsterdam Internet Exchange (AMS-IX), which carries approximately 20 percent of all Europe’s Internet traffic, grew at a compound monthly average of 7.4 percent in 2006.”
This indicates around 120 percent yearly growth of traffic amount in this case. If this information is correct then it conflicts with Odlyzko’s estimate  of 50 to 60 percent a year growth. Perhaps the growth of the Amsterdam hub is not representative (given it is the world’s busiest interchange) or it includes the effect of new providers joining the exchange as time passes.
Indeed, in a presentation by AMS-IX’s CTO Henk Steenman we find a slide showing an increase in number of members of about 50 per year. If so, then a traffic growth of 120 percent in the exchange does not translate into a 120 percent growth in link utilization, since it is going to be distributed over more links.
Besides, the growth of total traffic amount does not equal to the total growth of link load! Traffic amount is the number of bits carried in some long time interval (e.g., a day), whereas link load is the instant rate of packets. Deloitte worry about congestion on links using traffic amount growth as the main argument without saying how it translates to link load.
But let’s assume for a moment that the traffic amount growth corresponds also to the peak bit rate growth. This is unlikely, but it will give us the upper bound on how bit rate can grow. The following table then shows how the bit rate changes from year to year, given the claimed 7.4 percent monthly growth, 50 new members a year and the extreme assumption of peak bit rate growing at the rate of traffic amount growth.
|Year||Number of members||Peak bit rate [Gbps]||Average rate per member [Gbps]|
|2007||300||307 (120% growth from 140)||307/300=1.02|
Hence we have (1.02-0.56)/0.56=82 percent increase in bit rate on average over all members. Note that this is an overestimation, because the growth of total amount of traffic does not have to mean an equivalent growth of peak bit rate. (It can mean that bandwidth is used more often at the same rate as before.)
In conclusion, I would say the only thing Deloitte got correct about traffic growth is that there will be some. But I cannot see how their arguments lead to the conclusion that it is likely that Internet backbone in year 2007 will become more congested than in other years.
Personally, I think the problem of congestion is much more tangible in smaller networks closer to the end–customer. Lack of accountability, frequent outages and underprovisioning give a real headache to the broadband user, who still cannot, in year 2007, choose between if only 2 classes of end-to-end service.
 Deloitte Touche Tohmatsu “Telecommunications Predictions, Technology, Media and Telecommunications Trends 2007”, 2007. Available on-line at http://www.deloitte.com/dtt/article/0,1002,cid%253D141454,00.html
 Goth, G. “More Online Video Rekindles Network Capacity Debate”, Internet Computing, IEEE, May-June 2007.