Traffic and Access

This page looks at internet traffic growth rates, costs and destinations.

It covers -

• volumes and growth rates
• economics
• composition 
• traffic flows

More detailed statistical information about the direction and dimension of traffic flows is provided in the Metrics & Statistics guide.

     volumes and growth rates

In mid 2001 US router entrepreneur Lawrence Roberts dismissed a McKinsey & JP Morgan report predicting that IP traffic would decline from recent 200 to 300% growth to a 60% annual increase by 2005, with overall IP traffic revenue climbing from US$13 billion in 2000 to over US$56 billion in 2005.

Others had criticised that report for overestimating past growth rates. Vint Cerf for example commented that

I doubt traffic ever grew at 300 to 400 percent per year. I think it has been more like 80-100 percent which is likely to continue, especially as broadband is more readily available and more widely deployed.

Roberts claimed traffic expanded by a factor of 2.7 until January 2000, when it jumped to 3.6 for the year. In the first six months of 2001, expansion hit a factor of 4, which Roberts expected would remain steady through 2008.

Those claims were questioned by Andrew Odlyzko, one of the more persuasive analysts of electronic publishing and online content pricing, in a December 2001 comment. Odlyzko and K G Coffman had earlier released papers on Growth of the Internet (PDF) and Internet growth: Is there a "Moore's Law"' for data traffic? (PDF). One perspective is provided by Ilkka Tuomi's 2002 paper The Lives and Death of Moore's Law.

Odlyzko's scepticism has been substantiated since the collapse of the dot-com and telco bubble, with

     economics

The information economy is built around low cost instantaneous global communications: the ability to easily send and receive data (statistics, prose, video, multimedia). Overall, the cost of pumping bits around Australia - and around the globe - has fallen dramatically over the past three decades, in conjunction with increased traffic flows.

Local and international data transmission costs declined by up to three orders of magnitude over the past two decades.

Price declines for most consumers have not been that dramatic. Contrary to George Gilder's prophecies in the millenarian Telecosm: How Infinite Bandwidth Will Revolutionise Our World (New York: Free Press 2000) the cost of being online - and who pays - thus remains a significant issue. 

For a basic introduction to network economics we recommend Internet Economics (Cambridge: MIT Press 2000), edited by Lee McKnight & Joseph Bailey. McKnight's Internet Telephony (Cambridge: MIT Press 2001) is of particular interest.

     Composition 

Estimates of the composition of internet traffic are problematical. As of 1998 it is likely that access to web pages accounted for around 70% of the traffic, with electronic mail and file transfer (ftp) at around 10%.

Streaming video/audio has not shown the growth forecast by some analysts, for reasons that include traffic costs, low demand for much of the content (watching television or wet paint is more entertaining than much streamed content) and disagreement about standards resulting in limited uptake of proprietary technologies.



The International Telecommunications Union's 2001 workshop on internet telephony heard that one in 33 international voice calls during 2000 used the net rather than traditional telecommunication systems.

Some estimates suggest that by 2004 up to 40% of all international telephone traffic may be net-based. A detailed report presented by the ITU Secretary-General at the 2001 event suggests the market is now taking off, rising from almost zero voice calls in 1997 to just over 3% of international voice traffic (4 billion minutes) last year.

     traffic flows

The metrics guide on this site points to studies - and some stunning maps - about internet traffic flows: who is online, where they reside, the volume of traffic, the growth of sites (and pages).

Australia is a net importer of internet content (consistent with its status as a importer of content offline, ie books, magazines, film, sound recordings). As a result the existing international traffic charging regimes - biased towards exporters - are of concern.

Closer to home debate continues about local varieties of the digital divide, which we've explored in a multi-page profile. Sociodemographic Barriers to Telecommunications Use, a major report for Telstra, for example argues that the Australian 'digital divide' is one of income and social situation, not geography - questioning the government's concern with supply to rural areas. 





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