Internet rapidly overtaking telephone traffic, MIT scholar finds
freedomforum.org
Internet rapidly overtaking telephone traffic, MIT scholar finds
By Adam Clayton Powell III
3.11.98
The Internet will carry more communications traffic than conventional telephone
voice circuits in the United States by the end of this year.
That startling prediction is the conclusion of research at the Massachusetts
Institute of Technology presented last night by David Tennenhouse, an
associate professor at MIT's Laboratory for Computer Science.
Tennenhouse said the shift from conventional voice to "packet switched" data
was occurring far faster than is generally realized by anyone, including the
government and the major telephone companies.
"By the time they (regional Bell telephone companies) react, they may find the
Internet service providers have the traffic," he told a forum of the MIT Club of
Washington.
The Internet uses packet-switching technology, which breaks up each
message, whether text, data, audio or video, into "packets." It then routes
those pieces of message across the network, reassembling them at the
receiving end to recreate the original message. It sounds complicated (and it
is), but packet switching provides many advantages over 19th-century telephone
voice circuits. Many of those benefits were unanticipated consequences of the
new Internet technology.
The "eclipse point," at which a new technology has grabbed 90% of the market
from an old technology, has moved forward based on the MIT research,
Tennenhouse said, predicting it would come in less than 10 years.
"If you want to do a 10-year research project," he said, "it's already too late."
The regional Bell companies will keep control of "the last mile" of the nation's
communications network -- the connection to your house -- but Tennenhouse
said the competition for long distance and regional traffic, even voice traffic, may
be wide open.
Internet telephony -- placing voice telephone calls over the Internet -- is just
beginning, Tennenhouse noted, but he said voice calls on the Internet were
"moving very quickly" to replace conventional telephone traffic in markets where
government agreements keep the price of voice telephone calls artificially high,
such as in calling between Israel and the U.S.
"The ultimate shape of the industry is not the technology," he said, "but the
speed with which it is adopted."
And the rate at which the U.S. is racing toward that "eclipse point" could have
profound implications for the U.S. telephone industry.
Revenue from Internet communications may not exceed revenue from voice
telephone calls for another three or four years, said Tennenhouse, "because
data is (priced) cheaper per bit than a telephone call." But by then, when voice
calls may make up 10% or less of traffic, there will be a "very sudden" move to
"shut down the old clunky system," Tennenhouse said.
However, the major Bell regional telephone companies use a 20-year
depreciation schedule for switches and other major capital investments. So
they will still have billions of dollars on their books invested in equipment that
will be out of date.
"By the time you see the writing on the wall, it's done," said Tennenhouse, who
expressed concern for the financial health of at least some of the Bell operating
companies. "I don't think they will all go bankrupt," he said, "but we do have a
bunch of them" that may go out of business.
Tennenhouse is on leave from MIT to direct the Information Technology Office of
the Pentagon's Advanced Research Projects Agency, the agency that
developed the early versions of the Internet.
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