In May of this year, Nemertes Research president Johna Till Johnson wrote in Network World that “The Internet Sky Really Is Falling.”

The next day, we came out with a story about that column, in our much more irreverent style, entitled “That’s great, it starts with an earthquake: Is the Internet dying?”

In that article, we questioned the conclusions that they drew from evidence. To sum up, those conclusions were:

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  Nemertes believed that YouTube restricting high definition video to developing countries was a sign of the Internet outstripping backbone demand. We pointed out that such restrictions were due to local traffic problems and the lack of profitable business models in many developing markets.

  
  
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  Nemertes also pointed out that many cable carriers were instituting bandwidth caps and pay-per-byte pricing. We pointed out that we did an entire series on why usage caps don’t help with traffic congestion, and that ISPs that roll them out typically do so in generally non-competitive markets where they have other business interests (like cable TV and phone service) that compete with Internet access, and that there were plenty of counter-examples of companies (like Verizon and Cablevision) offering more bandwidth without caps.

  
  
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  And Nemertes pointed out the IPv4 shortage, for which there was already a solution, IPv6. (Though adoption rates have been slow, it does not mean the Internet will halt – simply that IPv6 changeovers will be more expensive the longer the delay.)

But the one thing we didn’t question was claim by Nemertes claims that Internet traffic will grow “exponentially” while Internet backbone will grow “linearly,” leading Nemertes to the conclusion that there will come a day when there will be Internet “brownouts.”

Recently, Johna Till Johnson published another column – this time in ComputerWorld, outright claiming that net neutrality legislation would mean the end of the Internet. That’s not hyperbole on my part – the headline is literally: “Hello net neutrality, goodbye Internet.”

And Ars Technica, a Conde Nast publication, decided to take another look at Nemertes’ evidence.

Essentially, Nemertes now claims (in the October article) that Internet growth creates a strain on last-mile access lines (Cable/DSL/FiOS) that makes it “excruciatingly expensive to upgrade,” that network neutrality would mean that you can’t charge different rates for different traffic, so backbone providers and carriers would start charging by the bit – or at least capping and charging for overages. Since bandwidth providers would now charge each other for the traffic on their networks, they would either raise subscriber rates dramatically or disconnect from the Internet entirely, literally killing the Internet as the entire thing breaks down into walled tiers like early 1990s Compuserve, AOL, & Prodigy.

Ars Technica, on the other hand, points out that the “excruciatingly expensive to upgrade” last-mile bandwidth isn’t exactly excruciatingly expensive compared to the profits that Internet service providers already generate with net neutrality and in most cases, without caps. Verizon, for example, is paying $18 billion for FiOS upgrades, but that’s the most expensive upgrade in the market, and Verizon finds it financially feasible to do so in a net-neutral market. For most ISPs, DOCSIS 3.0 (for Cable) and FTTN (for DSL) are very cheap solutions to increasing last-mile bandwidth.

As for the idea of the Internet fracturing, Ars Technica pointed out that ISP networks all exchange roughly the same amount of bandwidth; and an even trade is an even trade no matter how much it costs. There are many ways to recoup costs – but raising the rates on a competitor who can then turn around and raise rates on you doesn’t make any sense at all.

Or as Sevcik and Wetzel put it in Network World:

“Backbone ISPs and access ISPs must play nicely with each other to satisfy their customers' needs. Why for heaven's sake would they hurt their customers and themselves by balkanizing?”

What’s most worrying however, is that Ars Technica wrote that Nemertes idea of Internet growth outstripping capacity may be flawed.

According to the University of Minnesota MINTS project, the year-over-year growth of Internet traffic is not “50-100%” as Nemertes claimed in the ComputerWorld article, but “50-60%.” (Technically, “50-60%” is within the range of “50-100%” but it’s like estimating that a man that could be 5to 6 feet tall is “between 5 to 10 ft. tall.”) In Canada, where ISPs have to reveal traffic numbers due to network neutrality research by the Canadian government, they find that growth is slowing, year over year. 53% growth in 2006, but 32% growth in 2008.

We’ve found that when it comes to enterprise networks and IT in general, Nemertes Research is a valuable research organization. But in 2007, Nemertes made a prediction – a reasonable one, given the evidence at the time - about the Internet that did not come to pass. Instead of re-examining that prediction, they continue to insist – on openly contested arguments – that they were indeed right all along, even as, less than 3 months away from the ominous “2010” date, the Internet has managed to keep up with the demand of high-bandwidth YouTube HD files, NetFlix streaming, Skype Video-calling, video game downloads, and other high-throughput applications.

I think that what is actually happening, rather than demand for bandwidth outstripping supply, is that the supply of bandwidth creates its own demand, and that the new demand comes primarily from new applications. That is, HD video on the net is only in demand now that the networks have been shown to be able to handle that kind of capacity. YouTube didn’t start until there was enough capacity on the Internet to make SD video distribution feasible. Only later, when capacity grew, did YouTube roll out high quality video, and still later (after Vimeo proved it was feasible) did YouTube roll out 720p video content. When the network capacity can handle streaming 1080p video, then that will be the new standard. But no one is going to roll out 1080p video until the network can handle it.

This is not to be confused with the issues faced by enterprises when trying to allocate resources to business critical traffic over recreational traffic – where supply of recreational network traffic can be artificially restricted through QoS policies and traffic shaping in order to, presumably, lower the strain that recreational traffic puts on the network. Even so, most smart companies engage in capacity planning, making sure they have the bandwidth available to use new applications before those applications are rolled out. Teleconferencing, for example, is a business application that requires a great deal of bandwidth – but it’s of no use to an organization – and therefore not demanded – if the company network can’t support it. Or in other words, if the money saved from teleconferencing isn’t equal to or greater than the increase in network costs, smart companies are not likely to invest in teleconferencing.

In short, the sky is not falling. But keep an eye on your patch of it, anyway.