The Internet and other networks: utilization rates and their implications

Costs of communications networks are determined largely by the maximal capa cities of those networks. On the other hand, the traffic those networks car ry depends on how heavily those networks are used. Hence, utilization rates and utilization patterns determine the costs of providing services and, th erefore, are crucial in understanding the economics of communications netwo rks. A comparison of utilization rates and costs of various networks helps disprove many popular myths about the Internet. Although packet networks ar e often extolled for the efficiency of their transport, it often costs more to send data over internal corporate networks than using modems on the swi tched voice network. Packet networks are growing explosively not because th ey utilize underlying transport capacity more efficiently but because they provide much greater flexibility in offering new services. Study of utiliza tion patterns shows there are large opportunities for increasing the effici ency of data transport and making the Internet less expensive and more usef ul. On the other hand, many popular techniques, such as some Quality of Ser vice measures and ATM, are likely to be of limited usefulness. (C) 2000 Els evier Science B.V. All rights reserved.