At the Westminster eForum on Web 2.0 last week in London, Jim Cicconi, chief lobbyist at AT&T warned that the Internet will be fully clogged by 2010.
When I worked at AT&T Bell Labs around 20 years ago, the phrase “imminent death of the net predicted” was already a running joke, so something else must be going on.
In the past 20 years network bandwidth has grown by something like a factor of 1 million, and there is no end in sight.
The real reason for his statement is probably to warm the public to volume based pricing. Telecom companies hate the current flat-rate Internet pricing model because it limits their growth. Once you have served all households in your geographical area your revenue is capped, and you can only compete on price. With a volume-based pricing model you can hope to seduce your customers into buying more, and more expensive services. However, the ghost of flat-rate pricing is out of the bottle, and customers will not like going back.
If anything, the telcos should realise they are in two adjacent businesses. They supply high-volume information technology services, such as phones and desktops that work. They are also in the content distribution business. They should buy a company like Akamai, so that they can optimise both the network traffic and the user experience.