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Internet Traffic Continues to Explode, No End in Sight

“In 2016, over 1.3 Zettabytes of data will travel across Internet protocol (IP) networks. That’s over 10 times the traffic generated in 2008 and more than all the IP traffic that traversed global networks from 1984 to 2012 combined (1.2 Zettabytes).”

This estimate is from the latest Visual Networking Index (VNI) released today by Cisco which forecasts IP network traffic patterns from 2011 to 2016. The annual VNI rolling five year forecast has become a trusted industry barometer for how rapidly the use of global IP networks is expanding.

So what’s driving the explosive data growth?

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Getting to the UN Broadband Commission’s 2015 Goals

Earlier this week, I attended the UN’s Broadband Commission meeting in Ohrid, Macedonia, where we discussed initiatives to reach the Commission’s goals by 2015:

1) All countries have national broadband plans;

2) Broadband is affordable in developing countries so that entry-level broadband services cost less than 5% of average month income;

3) Broadband is adopted by 40% of households in developing countries; and that

4) Broadband penetration reaches 60% of the worldwide population and 50% in developing countries

To support this vision of an ever expanding Internet that people see as essential, Cisco sponsored the 83rd Internet Engineering Task Force (IETF) meeting last week in Paris. At the IETF, more than 1,400 of the leading Internet engineers and technologists from around the world gathered to further develop the standards which provide the foundation for Internet services such as domain names, email, the Web, and instant messaging.

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Policy Implications in the Rise of Mobile Broadband and Heterogenous Network Access

Over the last few months, a growing consensus has emerged pointing to a dramatic change in the way people access the Internet.

In 2011, for the first time ever, worldwide annual demand for smart phones surpassed that of PCs, laptops and tablets combined. Then last month our Mobile Visual Networking Index (VNI) Update reported that global mobile data traffic is growing even faster than previously forecasted and will increase 18-fold over the next five years.

So by this year’s Mobile World Congress in Barcelona in February, the ‘top of mind’ for network operators, government officials and device manufacturers was the dramatic accelerating impact that mobile data consumption will have on Internet access, networks and users.

When we launched the mobile VNI report on February 14, a panel of industry, academia and government experts glimpsed into the future of mobile broadband and related policy issues, with three key takeaways:

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An Unlicensed Roadblock?

The road to US spectrum reform often feels like  anything but a Superhighway.  New obstacles emerged just today, when it became apparent that House Members on the Energy and Commerce Committee have yet to reach agreement on much needed spectrum legislation.

The latest roadblock?  What to do about unlicensed spectrum.

As the leading provider of unlicensed devices in the world, Cisco has a unique business perspective on this matter and has thought a lot about this should be reconciled, and our perspective is well settled.

We strongly believe that unlicensed technology such as WiFi will be a critical part of addressing the rising demand for data traffic from smartphones, tablets, laptops, and a myriad of other mobile devices.  Mobile carriers need more spectrum to address this demand, and more spectrum is needed for unlicensed devices, too.  For unlicensed, policymakers should focus their attention on 5 GHz and the benefits of expanding the existing vibrant WiFi ecosystem.

If we take a wrong turn now, then we will miss an enormous opportunity to free up more spectrum for mobile broadband and generate billions of revenue for the federal government.

Here’s why:

First – Congressional action on spectrum would yield enormous benefits in the short term – driving economic growth, creating jobs, and spurring innovation.  With any legislation, there will be different views.  That’s part of the process.  But differences should not bring the process to a standstill.

Spectrum legislation is needed to give the FCC tools to make more wireless broadband spectrum available. Based on Cisco’s Visual Networking Index data demonstrating the projected growth in mobile data, it is critical to get this issue addressed. In addition, it is critical to move forward on transitioning more spectrum from federal use to commercial use.  We are at the very beginning of the mobile broadband explosion, and failure of policymakers to act now will mean a lack of connectivity, dropped connections, and slow data rates in the future.  No one wants that outcome.

Second – the value of WiFi and other unlicensed technologies that run on unlicensed spectrum is to take spectrum that would otherwise not be used, and to put it to productive work.  In other words, in situations where unlicensed can co-exist with an existing use, and not interfere with that use, that ability to “share” is the economic dividend that should command the policymaker’s attention.

The expansion of unlicensed technologies such as Wi-Fi from the original 2.4 GHz band into 5 GHz occurs in a shared environment and has proven to be remarkably successful– unlicensed shares with federal systems at 5 GHz, using spectrum that would otherwise lie fallow.   Maximizing industry’s ability to put that spectrum to work, without creating harmful interference to existing users, should be everyone’s goal in a world where WiFi is in every mobile device, and new WiFi applications are growing at a brisk clip.

Third – a critical question in spectrum reform is whether the reform will result in spectrum being put to work in the economy.  Unlicensed spectrum at 5 GHz consists of an ecosystem of large, well-established chipset manufacturers, hundreds of radio manufacturers and others who already are producing technology for sale in most countries of the world.   If additional unlicensed spectrum is made available at 5 GHz, there is an immediate impact to US industry to produce innovative new products, and drive new applications, to benefit business and consumers.   For that reason, Cisco strongly favors policies that support an examination of whether additional shared spectrum at 5 GHz can be made available to unlicensed.

Proposals before Congress to create a new, sub 3-GHz spectrum band for unlicensed, such as a new band in the TV UHF band dedicated to unlicensed, put the emphasis in the wrong place.  New radio ecosystems, even in favorable circumstances, can take a decade or more to develop, leaving spectrum unused at a time when the licensed mobile industry has an acute demand for it.  Whether a new unlicensed ecosystem could successfully develop in the UHF band is anybody’s guess.

Of equal importance, clearing spectrum below 3 GHz for unlicensed  excludes one use (licensed mobile) in favor of another  (unlicensed).  Contrast that to unlicensed use at 5 GHz, where existing federal users remain, unlicensed devices operate on spectrum that would otherwise remain idle, and everyone benefits from more intensive use of the radio spectrum.  To Cisco, shared spectrum use, building off the  existing ecosystem at 5 GHz, presents the most compelling vision for unlicensed.

Movement on Free Trade

Cisco is pleased that the White House announced yesterday that it submitted to Congress the implementing legislation for pending free trade agreements with Korea, Colombia and Panama.  Cisco supports Congressional passage of the bills – along with legislation to renew the Trade Adjustment Assistance program – in a few short weeks.

As described previously, we expect implementation of the agreements to increase market access for Cisco products and services in these rapidly-growing markets.