Update on Bandwidth Costs

I argued in a couple of posts last week that we should question Carr's assumption that bandwidth costs would stay low in the future. It looks like I was probably wrong. Here is an article that cites a lot of data supporting Carr's position. Basically, internet traffic growth is slowing while bandwidth growth is increasing. Note that these are second order measurements - traffic itself is still increasing year-to-year. This means that we are not relying on a finite amount of overcapacity (dark fiber) to absorb increased bandwidth requirements. To illustrate:

Data source: Telegeography. Image source:Ars Technica.

There is apparently still a bottleneck at the "last mile," which explains ISPs' concerns with P2P, but there apears to be no general shortage.

Processing power still might increase more rapidly (or decline in cost more rapidly) than bandwidth, but the central idea that bandwidth will get cheaper for the foreseeable future is probably right.

Hat tip to Slashdot.