New Study Shows Required Network Expansion Could Cost $100 Billion Over Next Five Years

Washington, D.C. –— New technologies are dramatically transforming the Internet and could boost IP traffic in the United States more than 50-fold within the next decade, according to “Estimating the Exaflood: The Impact of Video and Rich Media on the Internet,” a report released today by the Discovery Institute.

“Innovations like YouTube, IPTV, high-definition video and mobile phone cameras are driving this new wave of data—or exaflood—of Internet and IP traffic,” said Bret Swanson, an adjunct fellow at the Discovery Institute and co-author of the report. “Many of the new online opportunities we can’t even imagine today. But these exciting applications and services will only be possible if we make large new investments in broadband fiber-optic and wireless networks.”

The 24-page report, co-authored by Swanson and George Gilder, a senior fellow at the Discovery Institute, describes the technologies and trends that will drive Internet growth. It projects IP traffic levels overall and by application. By 2015, video calling and virtual windows, for example, could total 400 exabytes a year, or about 40 percent of U.S. traffic.

An exabyte is equal to one billion gigabytes, or approximately 50,000 times the contents of the U.S. Library of Congress. By the end of 2006, U.S. Internet traffic was approaching one exabyte per month.

The report estimates annual totals for various categories of U.S. IP traffic in the year 2015. It projects

  • Movie downloads and P2P file sharing of 100 exabytes
  • Internet video, gaming and virtual worlds of 200 exabytes
  • Non-internet IPTV of 100 exabytes, and possibly much more
  • Business IP Traffic of 100 exabytes

As real broadband is deployed, these data tributaries will swell into an exaflood,” said Gilder.

“We’ve entered the third phase of Net evolution,” Swanson said. “The first phase was the original Arpanet research project and early enthusiasts. The second phase was the e-mail and Web browser explosion of 1995 that brought the Net to the masses. Today’s video and rich media surge begins the third phase. It will be bigger than the first two.”

The report estimates that by 2015 annual U.S. Internet and IP traffic will reach 1,000 exabytes, or one zettabyte, which is one million million billion bytes of data. A zettabyte is roughly equivalent to 50 million Libraries of Congress.

According to the report, capacity in broadband access networks to homes and businesses must expand by a factor of between 10 and 100 over the next few years. New network investments expanding bandwidth, storage, and traffic management capabilities in the U.S. could total more than $100 billion in the next half-decade alone. Technology remains the key engine of U.S. economic growth and its competitive edge, the authors contend. Policies that encourage investment and innovation in our digital and communications sectors should be among America’s highest national priorities, they believe.

To read “Estimating the Exaflood,” visit:

About the Technology & Democracy Project at the Discovery Institute:

Discovery Institute’’s Technology and Democracy Project ( provides expert analysis and commentary on technology and public policy issues. Led by program founder and renowned author George Gilder, the TDP is recognized as a national and international voice for free enterprise in the technology sector.

About the authors:

Bret Swanson is an adjunct fellow at the Discovery Institute and is senior fellow and director of the Center for Global Innovation at The Progress & Freedom Foundation ( Previously he was a technology analyst and executive editor of the Gilder Technology Report. This report expands on Swanson’s article “The Coming Exaflood,” which was published by The Wall Street Journal on January 20, 2007.

George Gilder is senior fellow at the Discovery Institute and the founder of Discovery’s Technology & Democracy Project. He is also chairman of George Gilder Fund Management, LLC; moderator of the Gilder Telecosm Forum and has authored a dozen books on economics and technology, including Telecosm, Microcosm, The Silicon Eye, and Life After Television.

Bret Swanson

Bret Swanson is a Senior Fellow at Seattle's Discovery Institute, where he researches technology and economics and contributes to the Disco-Tech blog. He is currently writing a book on the abundance of the world economy, focusing on the Chinese boom and developing a new concept linking economics and information theory. Swanson writes frequently for the editorial page of The Wall Street Journal on topics ranging from broadband communications to monetary policy.

George Gilder

Senior Fellow and Co-Founder of Discovery Institute
George Gilder is Chairman of Gilder Publishing LLC, located in Great Barrington, Massachusetts. A co-founder of Discovery Institute, Mr. Gilder is a Senior Fellow of the Center on Wealth & Poverty, and also directs Discovery's Technology and Democracy Project. His latest book, Life After Google: The Fall of Big Data and the Rise of the Blockchain Economy (2018), Gilder waves goodbye to today's Internet.  In a rocketing journey into the very near-future, he argues that Silicon Valley, long dominated by a few giants, faces a “great unbundling,” which will disperse computer power and commerce and transform the economy and the Internet.