Bandwidth: Cogent Pricing @ $6, Juniper Confirms Normal Bandwidth Demand Growth

"There is still no sign of an exaflood that would swamp the network. If anything, the tendency seems to be towards a slowdown,Juniper's CEO made a mistake cutting the cartoons, while taking a pay cut to support R&D not an acceleration," says Professor Andrew Odlyzko, the world's leading expert. The world's #2 router maker has confirmed that's wat their accounts are seeing. "Juniper customers report 50% to 60% annual growth in network demand, consistent with outside estimations the Internet is doubling every two years." (CD) There's similar data from Cisco, including projections the rate of growth won't change much through 2012. Other sources have lower figures. Cogent, now a primary backbone connection, saw growth of 30% in traffic from 2007 to 2008, including adding new customers.

$6 is Cogent's average new contract price, CEO Dave Schaeffer reported on the quarterly call. The scatter plot on the left below show's Olydzko's MINTS data from 2002-2008; the one on the right is 2008 alone. Note that most data points are above 1 and below two, with about as many below as above. On average, he's around 50% total growth, some from added users. In the 2008, note that several of the points on the far right are close to unity. These are the largest exchange points and networks. Mints Traffic Growth Data from 2002-2008

Mints Traffic Growth Data 00850-60% sounds like an enormous increase, but in fact has been the norm for 6 years and simply not a problem. I prefer to use the 25-45% bandwidth growth per user, which is the cost a carrier needs to cover. Moore's Law brings bandwidth costs - at least to large carriers -down about as fast. The total cost per customer has been essentially flat for years. Large carriers have fiber to every exchange they serve, and connect to the Internet via inexpensive peering. Delivering more bits requires upgrading routers, WDM boxes, etc. All tend to drop with cheaper electronics.

Small carriers, especially rural ones, typically pay much more and are being squeezed, as are remaining ISPs. Cable has a problem with a shared local upstream, but both Cox and Comcast say that has been minimized even without an upgrade to DOCSIS 3.0 upstream. Wireless is a more complicated issue, with limits on spectrum and often prohibitive costs to get from the tower back, but the lobbyists are exaggerating the severity.

FYI "Patrick Neighly was in San Francisco as a guest of Juniper" was the unusual but appropriate byline on the Comms Daily article. For the record, I, like Patrick and many other reporters for smaller publications, occasionally accept travel money to cover an event. That is against the ethics code of some major publications, and I wish it were practical for me not to make such compromises. Readers have to judge whether my reporting is accurate despite my conflicts.Written by Dave Burstein



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