| The U.S. Department of Labor reports that for the | | | | ABI Research estimates that the number of video |
| fifth consecutive year the most common disruption | | | | downloads to increase from 215 million in this year |
| to business was the loss of broadband internet | | | | (2008) to 2.4 billion in 2012. This number becomes |
| connection, with 39 per cent of businesses reporting | | | | more impressive when one takes into account that a |
| some kind of failure. In addition, the report concludes | | | | much higher per cent of those downloads in 2012 will |
| that long-term failure could be catastrophic. | | | | be high-definition files, which are much larger (A non |
| Communication requirements for business includes | | | | High Def DVD movie is approximately 3 GB/Hour, |
| credit card transactions, training, and other | | | | HDTV file size is dependent on encoding: an MPEG-2 |
| mission-critical functions. Business is increasingly reliant | | | | (MPEG-2 is the standard used by the DISH Network, |
| on internet communications. Ten years ago, much of | | | | MPEG-1 is used by Direct TV) encoded high def |
| this work was done on dedicated satellite | | | | movie file size is approximately 9 GB/Hour, an |
| communications links. However, increasingly, this | | | | unencoded 1280 X 720 movie file size is over 150 GB |
| transaction is occurring over telephone lines over the | | | | Hour, and an unencoded 1920 X 1080 movie file size |
| internet. | | | | is over 350 GB/Hour). |
| Mission-critical function disruptions cause extreme | | | | - By 2010, forecasts call for 80-90% of internet |
| harm to the business. Such an outage could have | | | | traffic to be video transfer. |
| serious legal and financial ramifications. Examples could | | | | The growth in video downloads could create an |
| threaten the health and safety of individuals (i. e. | | | | internet traffic jam that threatens the net's |
| hospital systems). | | | | development, according to Google. Websites like |
| In years past, mission-critical functions were managed | | | | YouTube (owned by Google) are heightening the |
| with dedicated networks, often via satellite. But | | | | problem and new developments will only make the |
| today in the U.S., hundreds of satellite | | | | problem worse. |
| communications stations every month are being | | | | Bandwidth-intensive applications like video download |
| decommissioned. | | | | by even a small portion of Internet users may |
| Growth of the Internet | | | | degrade service, and may even crash the Internet, |
| Internet traffic continues to grow between 60% and | | | | or parts of it ("Broadband Connectivity Competition |
| 80% a year (Telecommunications Industry | | | | Policy" FTC Staff Report, 2007). |
| Association (TIA) president Matthew J. Flanigan). "The | | | | Investment in the Internet Is Down |
| web infrastructure, and even Google's, doesn't scale," | | | | The Satellite Business has not been very profitable in |
| said Vincent Dureau, Google's Chief Video | | | | recent years. Satellite Business Systems (a Joint |
| Technologist. | | | | Venture of Comsat, IBM, and Aetna) spent more |
| The current perception is there is a significant excess | | | | than a billion dollars for a high speed satellite network |
| capacity in carrier networks. This has led to a | | | | supply satellite communication to businesses. It was a |
| reduction in investment in optical fiber installation. But | | | | total business failure. |
| according to TIA, this is incorrect. Utilizing data on | | | | Currently, the trend is to rely on the fiber internet |
| historical bandwidth drivers, past fiber and equipment | | | | for business operations. Hundreds of remote stations |
| usage trends, and an understanding of networks, the | | | | (the satellite industry refers to the stations as P.E.S. |
| system is near its capacity limit. Carriers in the United | | | | or personal earth stations), are decommissioned |
| States are rapidly running out of bandwidth and may | | | | every month in the United States. Relying on the |
| face capacity shortages as soon as this year. | | | | local internet (fiber) is cheaper. The main reason that |
| The telecommunications sector has been in a | | | | optical fiber is cheaper is that this market was |
| recession since 2000. The boom and bust in | | | | funded (some say over funded) during the dot-com |
| telecommunications was coincidental with the boom | | | | bubble. With the excess supply, prices are dirt cheap. |
| and bust in the "dot-com bubble" of Internet stocks. | | | | Carriers may not expand their capital-expenditure |
| The dot-coms received most of the publicity, but the | | | | budgets, because while a bandwidth shortage is a |
| telecommunications industry accounted for a larger | | | | matter of debate, a capital shortage is not. Telecom |
| share of market capitalization gained and lost than | | | | companies revenue growth has been poor. Borrowing |
| the dot-coms. The result has been a technology | | | | money to add capacity is difficult in this environment. |
| priced under replacement cost. Competitive | | | | "Bandwidth brownouts" might do what current |
| technologies have suffered. | | | | industry data seemingly cannot-convince Wall Street |
| The Role of the HDTV Revolution | | | | that investment is necessary. |
| The rapid adoption of HDTV is a significant force in | | | | "National and state policies toward broadband |
| the system. When Joe Q. Public buys new video | | | | innovation and deployment directly affect the ability |
| equipment, the DVD player's role in the system is | | | | of network operating companies to raise investment |
| reanalyzed. Many now choose to download movies | | | | funding in the capital markets. To the extent that |
| over the internet instead of using DVD's. This trend is | | | | these policies inject uncertainty into the marketplace, |
| likely to continue. | | | | threaten the potential return on infrastructure |
| "Most of the internet traffic is peer-to-peer, and | | | | investments, or interfere with the ability to operate |
| most of that is video. Every year we have to invest | | | | the networks in a way that maximizes capacity and |
| substantially just to maintain the user experience. In | | | | efficiency, such policies would directly and negatively |
| fact it (investment) has actually decreased," Richard | | | | limit the ability of network operating companies to |
| Alden, CEO of ONO, a large Spanish Cable Company , | | | | support expanding data traffic on the Internet" |
| told the Cable Europe Congress in Amsterdam. | | | | (David McClure, US Internet Industry Association). |
| Despite the relatively small number of users, research | | | | The outcome of these trends is not clear. The |
| indicates that systems such as BitTorrent and | | | | conclusion, that the internet is likely to be overtaxed, |
| YouTube account for more than half of all internet | | | | has been reached by many, though it seems largely |
| traffic. In 1995 the total amount of data transacted | | | | to be a secret outside of academia. |
| over the Internet backbone was about 1.5 million GB. | | | | If the bean-counters react in time and significantly |
| By 2006, this had grown to over 700 million GB. | | | | increase funding of fiber projects, none of the worst |
| Jonathan Arber, a technology analyst with Ovum, | | | | case scenarios is necessary. However prudence |
| said "the problem is that media companies are | | | | would dictate that business planners for |
| starting to use these peer-to-peer methods to | | | | mission-critical applications account for the potential of |
| distribute videos but the internet providers are the | | | | systematic internet unreliability. |
| ones paying for it." | | | | |