Oct 8, 2007 12:00 AM,

Funding the exaflood

By Ed Gubbins

Data-rich services may push up the price of broadband access

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Consumers may soon pay more for broadband, Bret Swanson, senior fellow with the Discovery Institute and former editor of the future-focused Gilder Report, told the Fiber-to-the-Home Conference in Orlando last week.

Swanson recently wrote in The Wall Street Journal about the deluge of data on public networks he calls the “exaflood.” Future data-rich services — including everything from video-on-demand to RFID to remote backup — will each push several exabytes (or trillions of megabytes) per month over the Internet.

The coming flood of traffic will require between $100 billion and $200 billion in new infrastructure, Swanson said, though it's not entirely clear how that network will be paid for. Not all the services running over that infrastructure will be offered by the infrastructure provider, and while bandwidth requirements are set to boom, today's broadband consumers are used to paying a flat rate no matter how many bytes they burden the network with.

Asked how the billions will materialize, Swanson said funding will come from investors confident that they will see a return. How they will get a return on such a massive investment isn't clear. Swanson expects a mix of business models to thrive in ways that are not easy to predict today.

“The more things we do over the new infrastructure, the more it becomes a crucial part of our lives,” Swanson said. “The more we use the Internet, the more there will be new pricing schemes. I'd guess that over the coming years — and some may not like to hear this — instead of paying $40 or $50 a month for a broadband connection, maybe we're paying $100 or $150 for a certain type of connection. We may be paying a lot more, and it may be well worth it. People may be glad to pay it.”