OCTOBER 21, 2008 • eWeekly is best viewed in your browser. • Feel free to forward eWeekly to a friend.

While a number of market researchers predict that ever-mounting demand for YouTube videos, pirated music and movie downloads may soon choke and slow internet service for small and medium-sized institutions, others don’t buy that view.

Andrew Odlyzko, a digital technology director at the University of Minnesota, says his research shows internet growth is actually slowing, and that its supposed impending collapse is greatly exaggerated.

Specifically, Odlyzko says internet growth has been much less robust than the 100 percent per year figure predicted by Nemertes Research—one of the research groups sending up alarm warnings of an impending internet slowdown.

“Right now, we are seeing growth of around 50 percent per year, and trending down, rather than up,” says Odlyzko, who oversees his university’s Minnesota Internet Traffic Studies. Odlyzko also points to Hong Kong, another mature market where internet penetration is even greater than the U.S, and provides more evidence of slowing growth. There, MINTS figures show internet use is actually shrinking, down 20 percent in 2007.

Jason Correia, director of marketing for web design firm Dreamco Design, also believes crawl-speed fears are little more than a Chicken Little, the-sky-is-falling rant. Correia notes that web technologists are continuously finding ways to shrink data into ever smaller file sizes, enabling telcos to transmit ever more data through the same sized pipe. Today’s .FLV video file, for example, takes up much less space in the pipe than older video files like .AVIs and .MPGs.

“We anticipate this trend will continue, making data smaller and smaller while maintaining or even enhancing quality,” Correia adds. Consequently, Odlyzko also believes that doomsayers’ preventative for a choked internet—generous tax breaks and other special government waivers for telcos—is ill-advised.

“As it is, telcos and cablecos have an incentive to bring fiber closer to the home and office anyway,” Odlyzko says. “With current growth rates in traffic, I do not see any need for a major increase in the budget for such efforts.” Indeed, creating an artificial incentive to upgrade internet connection infrastructure faster than needed could result in a glut in internet capacity, and a repeat of the dot-com ‘nuclear winter’ suffered earlier in the decade, Odlyzko adds.