Fall-off in P2P is slowing internet growth

Internet demand is slowing down, defying predictions of a flood.

In particular growth has leveled precisely in those high-fiber markets where we would expect to see demand take-off.

US researcher Andrew Odlyzko has documented this in detail for a number of years.

Now a Japanese paper has found that P2P demand has slowed down in recent years, almost certainly because of the rise of YouTube and other easily-available rich media.

The researchers argue that in fact the explosion of P2P in the early years of the decade generated outsized rates of capacity demand. Notwithstanding the emergence of new bandwidth-hungry app, it seems modest growth rates of around 30% will be the norm.

The Japan market makes a good test case. Almost 90% of the bandwidth is consumed by fiber users, although they account for less than half the broadband population.

And as the authors point out, internet growth rate is an extremely important metric. "With [an] annual growth rate of 100%, [the net] grows 1000-fold in 10 years, while with 50%, it grows only 58-fold."

Yet there is very little research on commercial residential internet usage. Hence the importance of this paper, which found that Japanese residential traffic grew 27% on average from May 2005 to May 2008.

They found that demand is still dominated by a handful of "heavy-hitters" - some 4% o all users account for 75% of the inbound and 60% of the outbound traffic, mostly using P2P.

In 2005, 63% of traffic was user-to-user, yet by in 2008 much of it was from "client-server type applications". It is hard to say how much.

But the researchers concluded that traffic growth had slowed "due primarily to the stalled growth of peer-to-peer traffic that is still dominant in the current traffic. At the same time, the usage of ordinary users is slowly swelling with increased diversity, driven by video and other rich media content. "

Still, video traffic is still "much smaller than" P2P, and would not greatly "raise the traffic growth rate in the next few years."

Their finding echoes an analysis by Cisco, who calculated that P2P had fallen from 60% of all internet traffic in 2006 to 51% in 2007.

If nothing else, these findings confirm there is little likelihood of the exaflood that US carriers have warned of.