The Internet Was Never Growing So Fast - Part II
from the sounds-familiar dept
The Wall Street Journal (republished, free of charge, at MSNBC) has an article talking about the myth that internet traffic was doubling every three months which was popular during the boom times - and which caused telecom companies to put down as much fiber as they did. The article sounds familiar to me, mainly because, it's almost the exact same article we posted a few months back. This article points out that back in 1995 and 1996 traffic probably was doubling at that rate, but it was clearly an unsustainable growth rate. Companies that believed it would go on forever were just being thick headed. Kevin Werbach comes up with a good quote at the end of the article: "Its like there are a lot of Olympic sprinters who died and people are trying to blame the guy who fired the starting pistol. Nobody forced these companies to build so many redundant networks."
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once all the fixed investment to lay the cables is written off, who picks up the asset has a easier ride than those who built it
I reckon that all the optical equipment to light dark fiber is still as much investment as laying the cable itself in the groung or under the sea but: is there any Moore law about optics, light amplification and colors that actually double capacity per single fiber every 10 months.
So, there s room for lower prices, much much room. And if they don t start passing those lower prices onto consumers, traffic won t grow and we go into negative feedback.
and that s what makes depressions, after Keynes multiplier we ve got the Telco demultiplier
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"The power of WorldCom’s puff"
(From The Economist print edition) Jul 20th 2002
http://www.economist.com/displayStory.cfm?Story_ID=S%27%29H%24%2FQQ%27%20%210%22%20%0A
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