Myths about Internet growth

An anonymous reader writes "An article in The Economist outlines WorldCom's role in starting the myth that Internet traffic doubles every 100 days. This helped inflate the telecoms bubble."

Growth follows the market

[gentlewizard]

The problem with this article, as well as the original Worldcom estimate, is that they assume linear growth. In reality, the demand for Internet bandwidth grows and shrinks with the economy in general. We're in a slump right now, so growth has slowed down. In the next boom, more people will want to download rich content such as video, which will in turn increase the demand for bandwidth.

Like the stock market, the bandwidth market has its up times and its down times. When you invest in the stock market, you invest for the long-term trend which historically has been up. In the same way, the need for bandwidth will continue to grow over the long term as we continue to find new and cool things to do with it.

Re:Hmm..

[saider]

How much capacity does spam take up? The article mentions 70-150% growth. I know my spam increase is growing about 70-150% a year.

How much of that is due to companies adopting spam as an advertising medium?

Exponential growth

[delfstrom]

"The greatest shortcoming of the human race is our inability to understand the exponential function."
-- Bartlett, as quoted in my 1st year physics textbook

This raises the other question . . .

[Badgerman]

How many other "marketing-oriented" "facts" are being touted today as justification for business, hiring, tactical, or hiring strategies? Or to be cruder, how many other business lies are out there mucking things up?

There's a re-evaluation of business tactics and laws going on. Maybe its time to re-evaluate supposed technological "truths" as well.

And maybe we techies can use this as yet another example of the hype over reality in technology, since WorldCom is in the use. Next time someone non-technical tosses out something obviously ridiculous, bring THIS up and ask them where they got their idea.

Re:Not to troll, but..

[Noofus]

Its simply because people trust statistics from any sort of authority figure.

If the PRESIDENT says something, people assume he MUST be right.

If says "our industry is growing FAST FAST FAST", people will believe it. This appears to be how bubbles form (Enron, Worlcom, etc). People will believe statistics if they seem somewhat reasonable and come from what appears to be a reputable source.

Besides, this doubling every 100 days figure seemed like a great concept to latch onto (gee, humanity is becoming more connected...thats great!)

So I guess the answer IMO, is that people ARE just getting caught up in excitement.

Re:Not to troll, but..

[medcalf]

This kind of thing happens all the time. Sometimes it's an honest mis-statement or a result of unstated assumptions. Sometimes it's a blatant lie. The perception of the false comment's status generally depends on your political views. (For example, a Republican would be suspicious of Clintonian whoppers, while a Democrat would be forgiving; and the opposite dynamic would hold with Republican political statements.)

That said, the reason that most people swallow them whole is because people believe what they hear from figures deemed "in authority", such as politicians, CEOs, doctors, and the mainstream media. All, interestingly enough, of these sources have egos the size of Texas and consciences the size of Guam. Why do people trust authority figures, given that there is every rational and historical reason to distrust them instead? Probably has an evolutionary basis (in that cohesive groups had better odds of survival, and adherence to authority in a crisis increased the cohesiveness of the group). In fact, the military deliberately teaches officers and non-coms the tone and style of speach needed to get instant obedience.

Moral: The media are stupid and lazy

[guacamolefoo]

This issue (a dubious statistic repeated infinitely in press) results from the fact that facts are not checked thoroughly before publication. This sort of stuff happened with the stats the women's movement used, environmentalists, conservative groups, etc. The number of women dying from eating disorders was a classic error that was endlessly cycled and never questioned until the misconception was permanently rooted in the public consciousness.

Every interest group pushing an agenda (yes, even profit-seeking corporations seeking to sell more bandwith) seems to come up with some dubious statistic like this. The media gobble up press releases, disguised oftentimes as "studies" which are bought and paid for by the interest group, and they spit them out on in the newspapers and other media outlets, sometimes virtually unchanged.

I am not surprised by the Economist's story -- I am surprised that it took so long for it to make it into print. I wonder how many times the Economist itself published that same "fact" before discovering that the emporer had no clothes.

Re:Not to troll, but..

[Anonymous Coward]

It's not just a case of people being stupid because they believe the President or a CEO, it's a case of people (Americans, anyway) pretty much believing anything that's delivered with authority. All you have to do is form a committee or an agency, and then have them publish/say whatever they want because the average person is dumb, gullible and trusting. You achieve the same result if you have an important sounding title ("V.P. of blah, blah, blah.." or "Director..."), or just make lots of outright suggestions that don't necessarily state a point, but certainly lead the listener/viewer to a specific conclusion, just like the ads for Windows XP. Those ads make a non-technical person think their life will be completely different because of XP; they'll be happy, smiling, etc., and everything will be great. This whole country is about marketing and sales, every single thing we do. Why's it any different when it comes from the President?

Doesn't surprise me

[EMDischarge]

WorldCom isn't the first telecom to go bankrupt. This trend in this industry is just accelerating. Blame it on the classic business cycle: overbuilding, in this case excess capacity, traditionally overflowing inventories, usually are the downfall of boom times. This is especially true in the telecom industry. Sure, there's capacity, but instead of lowering prices to encourage consumption, the telecoms have to meet the bottom line. Unfortunately for some this is causing an industry shake-out.

Same reason...

[Steve Franklin]

Same reason people believed eating carbohydrates would help them lose weight. They wanted to believe. They wanted to believe eating chocolate eclairs was good for them, and they wanted to believe that "nice man" wouldn't lie to them. And they wanted to believe the future was "so bright" they had "to wear shades." That's the one thing Clinton was able to impart to the country that Shrub doesn't seem to be able to. Optimism.

Re:Unbelievable (really?)

[Smallpond]

Yeah. What was that Moore guy thinking in 1965
when he forecasted chip density doubling every
18 months. That obviously couldn't last more
than a couple of years, could it?

Some predictions seem to work better than others.

Worldcom Blame...

[Kakarat]

I am sure that Worldcom's bloated statistics did mislead some, however it's quite convenient where the other companies are laying the blame.

Rival telecoms companies believed the myth and cited UUNET's figures, even if their own traffic figures disagreed.

I find it disturbing that these rival telecom companies aren't making their own decisions. "Tech: Sir, we are only using 3% of our bandwidth and 45% of the nations traffic traverse our networks. CEO: Damnit, can't you hear? We need more bandwidth!! MOORRRREEE!!!!"

yeah but

[lingqi]

there really isn't a way around that you know -- i hate the phrase "viscious cycle" but it's very necessary to use it here.

there are some basic facts we have to deal with when doing this

1) laying 1 fibre vs. laying 32 fibres costs about the same
2) you need to lay tons of fibres regardless (because the US is sparced out compared to, say, Tokyo / Seoul)
3) you need capacity *today*. not 32-fibre worth of capacity, maybe 1 or 2 fibre worth.
4) you probabbly need the 32-fibre worth of capacity in the future -- okay -- not the *near* future, but you know for a fact it will be utilized later

so basically, you need to invest in this infrastructure regardless -- because let's face it, you need them damn fibre runs even for today's economy. the choice boils down to
1) you spend 85 billion for 2 fibres today, and another 80 3 years later when you need to double the capacity
2) you spend 100 billion for 32 fibres today, and be home free for 12 years or so.

okay -- simplified math, bs statistics. but pretty much the same point.

if you were the CEO / CTO, what's gonna be your plan? i know i will bank on the 100 billion.

so they took a bet and ran out of $$ before it turned profitable. but it's was a lost gamble -- not a bad decision.

i like to point out that the interstate highway system is pretty much the same except the US got enough cash to cover it while it slowly became... profitable (on a entire economy scale)

Re:Not to troll, but..

[ch-chuck]

most people swallow them whole is because people believe what they hear from figures deemed "in authority", such as politicians, CEOs, doctors, and the mainstream media.

NAPOLEON: What shall we do with this soldier, Guiseppe? Everything he says is wrong.
GUISEPPE: Make him a general, Excellency, and then everything he says will be right.
-- G. B. Shaw, "The Man of Destiny"

This is what happens...

[macdaddy]

...when suits make decisions and don't believe what their own highly trained, highly experienced, and usually certified staff tell them. Believe me, I'm experiencing this first hand.

Re:This raises the other question . . .

[bons]

You mean "facts" like:

• "Open Source is more secure because everyone can look for security holes"? (Even if no one actually does, which is likely on some of these projects.)
• P2P increases/decreases music sales (pick your favorite, they're both just guesses)
• COBOL is dead

We live in a world of blatent lies and guesses. What bothers me is that the article tries to pin the blame on the source of the "facts" instead of the horde of people who just accepted the "facts" as facts. Heck, Slashdot readers will rip into any moderator dumb enough to make THAT mistake. Why are we willing to accept such a low standard from anywhere else?

It's depressing to watch a reporter claim someone else is being irresponsible for starting a bad rumor and forgive everyone else for their complete failure to verify the truth of what turned out to be an urban legend.

Re:Moral: The media are stupid and lazy

[pmz]

Moral: The media are stupid and lazy

I wholeheartedly agree--up to a point. There are a small number of top-notch journalists, who really do objective well-rounded reporting. Unfortunately, it really is a small number of journalists. Also, unfortunately, they tend to report on lesser-viewed channels, such as some radio, public TV, and some magazines.

The rest of the journalism industry is an overpopulated mass of careless wannabees who jump on anything even remotely reportable. Just look at local TV news, local newspapers, most of the national TV networks, most national newspapers, and, recently, most Internet news sites. All they do is propogate rumors, who-cares stories about kidnapped rich kids, slanderous stories about accused criminals, and tonight's prime-time lineup. Truly pathetic, given that they are the most watched and have the greatest influence on public opinion.

Re:Growth follows the market

[Elwood P Dowd]

Keep in mind that without irrational exuberance, there's no reason why we have to have booms and busts. If investors had never gone stupid, we might have never seen a dotcom bubble, just solid growth. Perhaps we'll learn from this mistake and we'll do it right once this whole thing levels out.

Maybe I'm being overly optimistic, but...

Re:Price of Bandwidth

[WolfWithoutAClause]

We've all heard talk of over-built data networks and "dark fiber". What interests me is how this apparent over-capacity does not seem to match up the price of bandwidth and the apparent bandwidth management of consumer-level heavy users.

I think what happened a few years ago was that the price was pushed below the sustainable level by VCs indirectly financing your bandwidth. For a couple of years I had a deal that actually cost me nothing whatsoever for my internet connection; actually it saved me 10% of my telephone line rental as well.

What's happened now is the VCs have gone away and the price has bounced back to where it really should have been in the first place and the companies supplying bandwidth are turning a profit again. For companies profit is like breathing- you can hold your breath for only so long and then you die; the companies are breathing again; but looks like some held their breath for too long.

However the cost per bit is going down all the time, and we should gradually see the price that we pay come down with it. (Should being the key part of that sentence ;-)

Multimedia!

[bigsexyjoe]

The big change in internet traffic, I would guess, is multimedia. It is probably now dominated by people downloading music and such on fast connections with other applications becoming small time. People may very well viewing twice as much html every 100 days but bandwidth shall from now on be music and movies. It shall soon be mostly just movies. The speed they roll out the DSL lines should have a huge effect.