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Minnesota Internet Traffic Studies (MINTS)

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A dramatic decline in traffic growth? Cogent reports absolute traffic decline, but other signs less dire

On Aug. 8, 2008, during the earnings conference call the second quarter of 2008, Cogent Communications, one of the largest backbone carriers in the United States, reported that its data traffic actually declined by 1% during that quarter, Cogent 2Q2008 earnings call transcript. This followed the first quarter of 2008, when traffic grew 6% in January and was flat in February and March, as opposed to growth of about 75% for all of 2007, Cogent 1Q2008 earnings call transcript. This was unprecedented, especially for a company that used to more than double its traffic each year, Telephony Online story.

Is the Cogent decline a symptom of a drastic decline in traffic growth rates, if not necessarily in traffic itself, perhaps along the lines of what we have seen in Hong Kong (where growth is at a crawl, although at far higher rates per capita than in the United States, Hong Kong and Australia traffic)? Akamai's second quarter earnings call provided more reasons for concern. Akamai is one of the largest generators of Internet traffic, and while it did not provide any hard numbers, its CEO, Paul Sagan, noted that "Explosion in traffic growth that we saw over the past couple of years has simply moderated," Akamai 2Q2008 earnings call transcript.

Other sources report slight, if any, declines, at least on an annual basis. Level 3 seemed to be saying that they had about 65% growth over the last year, Level 3 2Q2008 earnings call transcript. Global Crossing reported 140% growth from July 2007 to July 2008, Global Crossing 2Q2008 earnings call transcript. The Cogent decline may be the result of special factors, such as high degree of dependence of traffic volumes on a few large customers, YouTube in particular, that may be shifting their traffic. (The Level 3 transcript referenced above explains the complicated market for transmission, and how large customers can move their bits.)

AT&T has officially said that their backbone traffic is growing "at a pace of more than 50 percent per year," with P2P traffic dropping substantially, and Hulu and YouTube increasing. See the Aug. 1, 2008 issue of DSL Prime, an excellent source for other types of network information as well.

The latest results of the cooperative data collection and analysis effort by a group of Japanese ISPs is now available, and it shows a continuation of the very modest growth rates seen there recently, around 30% per year, Japanese traffic statistics. Later this year, detailed studies of the data are expected to be published, which will show P2P declining as a share of the total traffic, as well as many other interesting results.

Yet another interesting recent statistic comes from Virgin Media, a UK-based ISP that reported its broadband customers download an average of about 8 GB per month, and this figure has grown at a 57% annual rate (76% over 15 months), Virgin Media presentation deck.