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Democracy & Technology Blog Exaflood debate

The Fiber-to-the-Home Council has a new video clip nicely summarizing the impact rich video will have on Internet traffic and the resulting need for massive new network investment. In this, it follows the themes of an article I wrote in The Wall Street Journal on Jan. 20 called “The Coming Exaflood.”
Prolific blogger Tim Lee doesn’t like the “exaflood” idea and compares it to “peak oil” theories, which is funny because in my previous Journal column I debunked “peak oil.” Tim says peak oil assumes insatiable demand for oil, but in fact what peak oil asserts is that even though there is more oil in the ground, oil production will soon peak and begin a long, slow downward slide.
Although I strongly disagree with this theory and believe petroleum is fabulously abundant, bandwidth is even more so. At least potentially. We continue to find new ways to reuse the already expansive electromagnetic spectrum. It just takes dollars to build the networks.
Lee seems to misunderstand the exaflood as a “crisis” where a rush of data will overwhelm and crash the Internet. That is not my thesis. Lee claims to disagree with the exaflood premise, but then he uses the very YouTube example from my “Coming Exaflood” article. Broadcast.com — the YouTube of its day — didn’t work…because there wasn’t enough bandwidth.
I believe the video clip that Lee questions explicitly says that the exaflood is not a bad thing. So long as we build enough network capacity in the right places to accommodate the new applications coming online.
The ecosystem of networks (core and edge), bandwidth, software, consumer devices, and Net applications is a complex technical and business environment. These things build on each other. They interact. Companies build more network capacity because they think new applications will consume more bandwidth. People create more bandwidth-hungry apps because they think there will be more broadband. But as we saw in the telecom crash, if the ambition of the applications — in that case, the thousands of dot-coms that failed — outstrips the capabilities of the network, both the app companies and the Net companies might fail business-wise, but the network itself may not crash.
Here Lee and I agree. If new fiber-optic broadband links to homes and businesses are not built, there won’t be an “exaflood,” at least not as I envision it. Lee is correct that “demand for data is not an independent variable.” Demand is, of course, essentially infinite, but effective demand — what we can get for what we’re willing to pay — is dependent on the quality and capacity of the network.
Now it’s possible that if millions more people suddenly get radically better broadband connections, and they, again, suddenly all begin doing hi-res video conferencing, and if the network companies get caught short and haven’t built out their core networks, then there could be a bandwidth crisis in the middle of the Net. But this is not what I, at least, have been predicting. I don’t equate the exaflood with a crisis. I think it is a great sign of advance. It will be good for hardware, software, network, and applications companies. It will be good for consumers. It will happen if we let it.
It is inevitable in the long-term, but we can stop it in the short term if we enact bad investment-killing policy. If we retard the build-out of high-speed fiber networks to homes and businesses, there will be no exaflood, and we could, once again, crash the Internet ecosystem.

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.