• Mobile data traffic was even higher in 2010 than Cisco had projected in last year’s report. Actual growth was 159% (2.6x) versus projected growth of 149% (2.5x).
• By 2015, we should see one mobile device per capita . . . worldwide. That means around 7.1 billion mobile devices compared to 7.2 billion people.
• Mobile tablets (e.g., iPads) are likely to generate as much data traffic in 2015 as all mobile devices worldwide did in 2010.
• Mobile traffic should grow at an annual compound rate of 92% through 2015. That would mean 26-fold growth between 2010 and 2015.

Calling them “Masters of Light,” the Royal Swedish Academy awarded the 2009 Nobel Prize in Physics to Charles Kao, for discoveries central to the development of optical fiber, and to Willard Boyle and George Smith of Bell Labs, for the invention of the charge-coupled device (CCD) digital imager.

Perhaps more than any two discoveries, these technologies are responsible for our current era of dramatically expanding cultural content and commercial opportunities across the Internet. I call this torrent of largely visual data gushing around the Web the “exaflood.” Exa means 10¹⁸, and today monthly Internet traffic in the U.S. tops two exabytes. For all of 2009, global Internet traffic should reach 100 exabytes, equal to the contents of around 5,000,000 Libraries of Congress. By 2015, the U.S. might transmit 1,000 exabytes, the equivalent of two Libraries of Congress every second for the entire year.

Almost all this content is transmitted via fiber optics, where laser light pulsing billions of times a second carries information thousands of miles through astoundingly pure glass (silica). And much of this content is created using CCD imagers, the silicon microchips that turn photons into electrons in your digital cameras, camcorders, mobile phones, and medical devices. The basic science of the breakthroughs involves mastering the delicate but powerful reflective, refractive, and quantum photoelectric properties of both light and one of the world’s simplest and most abundant materials — sand. Also known in different forms as silica and silicon.

The innovations derived from Kao, Boyle, and Smith’s discoveries will continue cascading through global society for decades to come.

As the Journal wrote in its own editorial on Saturday:

Our own view is that the rules requiring traditional phone companies to connect these calls should be scrapped for everyone rather than extended to Google. In today’s telecom marketplace, where the overwhelming majority of phone customers have multiple carriers to choose from, these regulations are obsolete. But Google has set itself up for this political blowback.

Last week FCC Chairman Julius Genachowski proposed new rules for regulating Internet operators and gave assurances that “this is not about government regulation of the Internet.” But this dispute highlights the regulatory creep that net neutrality mandates make inevitable. Content providers like Google want to dabble in the phone business, while the phone companies want to sell services and applications.

The coming convergence will make it increasingly difficult to distinguish among providers of broadband pipes, network services and applications. Once net neutrality is unleashed, it’s hard to see how anything connected with the Internet will be safe from regulation.

Several years ago, all sides agreed to broad principles that prohibit blocking Web sites or applications. But I have argued that more detailed and formal regulations governing such a dynamic arena of technology and changing business models would stifle innovation.

Broadband to the home, office, and to a growing array of diverse mobile devices has been a rare bright spot in this dismal economy. Since net neutrality regulation was first proposed in early 2004, consumer bandwidth per capita in the U.S. grew to 3 megabits per second from just 262 kilobits per second, and monthly U.S. Internet traffic increased to two billion gigabytes from 170 million gigabytes — both 10-fold leaps. New wired and wireless innovations and services are booming.

All without net neutrality regulation.

The proposed FCC regulations could go well beyond the existing (and uncontroversial) non-blocking principles. A new “Fifth Principle,” if codified, could prohibit “discrimination” not just among applications and services but even at the level of data packets traversing the Net. But traffic management of packets is used across the Web to ensure robust service and security.

As network traffic, content, and outlets proliferate and diversify, Washington wants to apply rigid, top-down rules. But the network requirements of email and high-definition video are very different. Real time video conferencing requires more network rigor than stored content like YouTube videos. Wireless traffic patterns are more unpredictable than residential networks because cellphone users are, well, mobile. And the next generation of video cloud computing — what I call the exacloud — will impose the most severe constraints yet on network capacity and packet delay.

Or if you think entertainment unimportant, consider the implications for cybersecurity. The very network technologies that ensure a rich video experience are used to kill dangerous “botnets” and combat cybercrime.

And what about low-income consumers? If network service providers can’t partner with content companies, offer value-added services, or charge high-end users more money for consuming more bandwidth, low-end consumers will be forced to pay higher prices. Net neutrality would thus frustrate the Administration’s goal of 100% broadband.

Health care, energy, jobs, debt, and economic growth are rightly earning most of the policy attention these days. But regulation of the Net would undermine the key global platform that underlay better performance on each of these crucial economic matters. Washington may be bailing out every industry that doesn’t work, but that’s no reason to add new constraints to one that manifestly does.

— Bret Swanson

As Adam Thierer writes,

Whatever you think about this messy dispute between AT&T and Google about how to classify web-based telephony apps for regulatory purposes — in this case, Google Voice — the key issue not to lose site of here is that we are inching ever closer to FCC regulation of web-based apps!  Again, this is the point we have stressed here again and again and again and again when opposing Net neutrality mandates: If you open the door to regulation on one layer of the Net, you open up the door to the eventual regulation of all layers of the Net.

George Gilder and I made this point in Senate testimony five and a half years ago. Advocates of big new regulations on the Internet should be careful for what they wish.

Arguments for freezing the Internet into a simplistic regulatory straightjacket often have a distinctly emotional character that frequently borders on manipulation.

The Internet is a wonderful system. It represents a new standard of global cooperation and enables forms of interaction never before possible. Thanks to the Internet, societies around the world reap the benefits of access to information, opportunities for collaboration, and modes of communication that weren’t conceivable to the public a few years ago. It’s such a wonderful system that we have to strive very hard not to make it into a fetish object, imbued with magical powers and beyond the realm of dispassionate analysis, criticism, and improvement.

At the end of the day, the Internet is simply a machine. It was built the way it was largely by a series of accidents, and it could easily have evolved along completely different lines with no loss of value to the public. Instead of separating TCP from IP in the way that they did, the academics in Palo Alto who adapted the CYCLADES architecture to the ARPANET infrastructure could have taken a different tack: They could have left them combined as a single architectural unit providing different retransmission policies (a reliable TCP-like policy and an unreliable UDP-like policy) or they could have chosen a different protocol such as Watson’s Delta-t or Pouzin’s CYCLADES TS. Had the academics gone in either of these directions, we could still have a World Wide Web and all the social networks it enables, perhaps with greater resiliency.

The glue that holds the Internet together is not any particular protocol or software implementation: first and foremost, it’s the agreements between operators of Autonomous Systems to meet and share packets at Internet Exchange Centers and their willingness to work together. These agreements are slowly evolving from a blanket pact to cross boundaries with no particular regard for QoS into a richer system that may someday preserve delivery requirements on a large scale. Such agreements are entirely consistent with the structure of the IP packet, the needs of new applications, user empowerment, and “tussle.”

The Internet’s fundamental vibrancy is the sandbox created by the designers of the first datagram networks that permitted network service enhancements to be built and tested without destabilizing the network or exposing it to unnecessary hazards. We don’t fully utilize the potential of the network to rise to new challenges if we confine innovations to the sandbox instead of moving them to the parts of the network infrastructure where they can do the most good once they’re proven. The real meaning of end-to-end lies in the dynamism it bestows on the Internet by supporting innovation not just in applications but in fundamental network services. The Internet was designed for continual improvement: There is no reason not to continue down that path.

Send the bits with lasers and chips
See the bytes with LED lights

Wireless, optical, bandwidth boom
A flood of info, a global zoom

Now comes Lessig
Now comes Wu
To tell us what we cannot do

The Net, they say,
Is under attack
Stop!
Before we can’t turn back

They know best
These coder kings
So they prohibit a billion things

What is on their list of don’ts?
Most everything we need the most

To make the Web work
We parse and label
We tag the bits to keep the Net stable

The cloud is not magic
It’s routers and switches
It takes a machine to move exadigits

Now Lessig tells us to route is illegal
To manage Net traffic, Wu’s ultimate evil

The FCC in Oh Eight bought into the theory
And Comcast, the Chairman determined to bury

Then on Nine Twenty One
Genachowski declareth
Thou shalt not give primacy
Networks, you must shareth

The Net’s great virtue was decentralization
But Julius from on high decreed concentration
of power and decisions over all peers
Substitute bureaucrats for Net engineers

You may not
Shall not
Cannot cap
It’s discrimination!
Don’t you know that?

You may not give
the bits a weighting
No matter importance, voice or data

You may not
Shall not
Cannot charge
Even though
the bytes are large

In what other sector
is pricing illegal?
All for nothing as business model
is laughably feeble

Silicon, wires, software glue
It takes tens of billions to make bits move

You cannot charge
You cannot price
You cannot cap
It won’t suffice

No, no, they say, to bit analysis
Though it may lead to Net paralysis

We will not tolerate Q. O. S.
Not Weighted Round Robin
Nor flow-based service

Not Q-in-Q
Not PBT
Nor SLAs
at Layer Three

Storewidth and caching to speed the bits through
Akamai, Limelight cut latency to you
Though the result is customer speed
Don’t you get it? You may not give priority

Content, conduit, Googleplex
This neutrality thing may lead to bit wrecks

We thought all was well
3G, 4G, then WiMax!
But the once free Net
suffered bureaucratic attacks

When zetta visual bits
and mobile nets collide
Will the Chairman answer his phone?
. . . Or run and hide?

Out: speed, gadgets, quantum innovation
In: lobbyists, lawyers, mass litigation

Come to Washington
Ask us permission
Don’t they know it’s abundance they’re missin’?

But abundance is over
Scarcity is cool
We thought the Web was different
Now who’s the fool?

Moore’s law transcends
the cramped, dire fears
of misnamed Free Press
They’re no high tech seers

Mr. Chairman, please
might you cut us a break?
Should D.C. micromanage
the guts of cyberspace?

If you ban the codes that make the Net work
DiffServ, IPsec, and Dual Leaky Bucket
Net investors may revolt
and with fury say ————!

Who knows what the Web will bring
Which business models or networks will reign
With Net traffic growing at 60 percent
Shouldn’t techies experiment?

With fiber and cable
to bandwidth enable
Googleplex servers
a giant content stable

We do useful things like
BRED and Draft Martini
But once Neutrality is loosed,
might we never bottle this genie?

What about MPLS
and Inter Frame Gap?
Utopians now rule
Get used to that fact

Traffic, apps, digital value exploding
So tell me, FCC
What the heck is the problem?

The Net keeps on giving
Like water to wine
No artificial limits
Abundance sublime

But D.C. takes this great bounty for granted
Reap others’ rewards, assume innovation planted

Tera, peta, exa, zetta
So long free Net, see ya later

Miracle though the Net may be
The global telecosm is not free

— Bret Swanson

Today, FCC chairman Julius Genachowski proposed new regulations on communications networks. We were among the very first opponents of these so-called “net neutrality” rules when they were first proposed in concept back in 2004. Here are a number of our relevant articles over the past few years:

• “Let There Be Bandwidth” – The Wall Street Journal, March 7, 2006
• “The Coming Exaflood” – The Wall Street Journal, January 20, 2007
• “Unleashing the ‘Exaflood’” – The Wall Street Journal, February 22, 2008
• “Bandwidth Boom: Measuring U.S. Communications Capacity from 2000 to 2008″ –  Entropy Economics, June 24, 2009

Maybe I like it so much because it so closely tracks the concepts offered in my long paper of last August called “Entrepreneurship and Innovation in China – 1978-2008 – Thirty Years of Decentralized Economic Growth”, a follow-on article in The Wall Street Journal, and a previous essay “Breaking Metcalfe’s Law” on the economic importance of the exchange of ideas.

Romer uses China’s “free zones” envisioned by Deng Xiaoping and initially implemented by one Jiang Zemin as the chief example of how his charter cities would work in practice. He explains how they might cut the political-economic Gordian knot of societies too stuck in the past to make obviously needed rule changes that open the floodgates of ideas and entrepreneurship. These were the key themes of my paper.

Also check out this working paper by Romer that surveys the economic growth literature (hat tip: Growthology).

In fact, most of this is backward. We did not under-react to China. We overreacted. The U.S. weak-dollar policy — a combination of historically low Fed interest rates and a Treasury calling for a cheaper currency — was a direct and violent reaction to the trade gap. A series of Treasury secretaries and top U.S. economists, from John Snow and Hank Paulson to John Taylor and Martin Feldstein, explicitly backed this policy as a way to “correct” these “imbalances.” This weak-dollar policy was designed to reduce the trade gap but in fact boosted it by pushing oil and other commodity prices through the roof. It also created and pushed excess dollars into other hard assets like real estate, resulting in the housing boom and then bust.

America’s overreaction to China’s rise in particular and our misunderstanding of global trade and finance in general was thus, I believe, the chief source of our current predicament. The Fed and Treasury failed to grasp the truly global nature of the economy and the centrality of the dollar around the world. I tell the story of Chinese-U.S. interaction in this long paper, “Entrepreneurship and Innovation in China: 1978-2008.”

Here was my attempt, over at the Technology Liberation Front, to put this topic in perspective:

_______________________ 

Bandwidth, Storewidth, and Net Neutrality

Very happy to see the discussion over The Wall Street Journal’s Google/net neutrality story. Always good to see holes poked and the truth set free.

But let’s not allow the eruptions, backlashes, recriminations, and “debunkings” – This topic has been debunked. End of story. Over. Sit down! – obscure the still-fundamental issues. This is a terrific starting point for debate, not an end.

Content delivery networks (CDNs) and caching have always been a part of my analysis of the net neutrality debate. Here was testimony that George Gilder and I prepared for a Senate Commerce Committee hearing almost five years ago, in April 2004, where we predicted that a somewhat obscure new MCI “network layers” proposal, as it was then called, would be the next big communications policy issue. (At about the same time, my now-colleague Adam Thierer was also identifying this as an emerging issue/threat.)

Gilder and I tried to make the point that this “layers” — or network neutrality — proposal would, even if attractive in theory, be very difficult to define or implement. Networks are a dynamic realm of ever-shifting bottlenecks, where bandwidth, storage, caching, and peering, in the core, edge, and access, in the data center, on end-user devices, from the heavens and under the seas, constantly require new architectures, upgrades, and investments, thus triggering further cascades of hardware, software, and protocol changes elsewhere in this growing global web. It seemed to us at the time, ill-defined as it was, that this new policy proposal was probably a weapon for one group of Internet companies, with one type of business model, to bludgeon another set of Internet companies with a different business model. 

We wrote extensively about storage, caching, and content delivery networks in the pages of the Gilder Technology Report, first laying out the big conceptual issues in a 1999 article, “The Antediluvian Paradigm.” [Correction: "The Post-Diluvian Paradigm"] Gilder coined a word for this nexus of storage and bandwidth: Storewidth. Gilder and I even hosted a conference, also dubbed “Storewidth,” dedicated to these storage, memory, and content delivery network technologies. See, for instance, this press release for the 2001 conference with all the big players in the field, including Akamai, EMC, Network Appliance, Mirror Image, and one Eric Schmidt, chief executive officer of . . . Novell. In 2002, Google’s Larry Page spoke, as did Jay Adelson, founder of the big data-center-network-peering company Equinix, Yahoo!, and many of the big network and content companies.

This interplay between bandwidth, storage, and latency, caching, content, and conduit, was the very point of the conference. What are the technical and economic trade-offs? Where will the Net be modular? And where will it be integrated? Where will content be stored, and who will pay? In many ways, the conference was ahead of its time. And my humble view is that Schmidt and Page may have even adopted some of the key insights of these conferences and turned them into some of Google’s most successful applications and architectures. A talk by Yale computer scientist David Gelernter in particular, I remember, seemed to have a profound impact on the way attendees visualized this coming “cloud” that would enable the death of the desktop. Remember, at the time, Google was still just a search engine company that hosted its then-thousands of servers in the data centers of Equinix and a few other hosting companies. Today, Google, with its global cloud platform and desktop killing apps, has become the supreme storewidth company.

I offer this background because some of us have been thinking about these topics for a (relatively) long time. When we first began analyzing this new “network layers” and then “network neutrality” policy concept five or more years ago, we did so with these profound architectural questions in mind. The Net, and the bits and applications traversing it, moves so fast, that we need all these technical solutions — routing, switching, QoS, CDNs, etc. — to make it work, let alone make it fast and robust.  

So yesterday’s Wall Street Journal story was not noteworthy for exposing some brand new network technology or architectural scheme. No, it seemed noteworthy (again, pending the accuracy of the reporting and the follow-on assertions) because (1) it highlighted the reality of this already existing architecture — something a few of us have been trying for years to expose and highlight as a shortcoming of the neutrality concept — and (2) suggested Google and others were softening their stance on the net neutrality policy issue. 

Now it’s perfectly possible the article is mistaken, that no one is softening on the push for net neutrality regulation. Let’s have the truth, indeed. But it is a good thing that we are getting deeper into the technology and architecture of the Net because a clearer understanding will expose net neutrality’s big flaws. As Gilder and I surmised five years ago, net neutrality, as ill-defined as it still is after all this time, seems one group’s attempt to get the upper hand on competitors using the heavy hand of government. My networks, good; your networks, bad. My content delivery bandwidth-saving latency-reducing fix, good; your content-delivery bandwidth-saving latency-reducing method, “evil.”

More to come. . . .

Correction: The issue of the Gilder Technology Report I referred to was of course titled “The Post-Diluvian Paradigm.” The meaning of this title was that after the flood of bandwidth — or capacity — was deployed, we would still need latency- and hop-reducing and other performance-enhancing technologies and architectures to make the cloud function robustly.