Two years ago, Verizon began deploying metro reconfigurable optical add/drop multiplexers (ROADMs) to back up its fiber-to-the-home (FTTH) rollouts. With 44 wavelengths, each capable of 10 Gb/s links, the carrier's engineers figured the system had plenty of headroom. But just two years later, some of those pipes are filling up. And as Verizon looks for the next wave of optical equipment to install, it is searching for gear than can handle 88 wavelengths — twice as much.

Though Verizon and XO have vastly different operations, both attribute their escalating capacity needs to residential Internet traffic: Verizon through its much-publicized FTTH rollout and XO, which doesn't target residential customers, through the capacity it wholesales to European broadband providers whose subscribers frequent American Web sites. Stuart Elby, vice president of network architecture for Verizon, believes the company has seen 50% to 80% annual Internet traffic growth for the past few years.

In a recent report, however, Odlyzko claimed U.S. Internet traffic may actually be decelerating, based on data collected from a range of major Internet nodes. After a short-lived peak in the mid-1990s, in which U.S. Internet traffic was doubling every 100 days, the growth rate has cooled to its current rate of about 50% to 60% per year, Odlyzko said. How could traffic growth be slowing just as YouTube is adding even more bit-rich traffic to the network every day?

“The 50% growth rate we see is presumably largely due to phenomena such as YouTube,” Odlyzko said. “It's just that people are not jumping on these offerings in numbers that would result in a substantial boost in the growth rate. A 50% growth rate is nothing to sneer at.”

Verizon also claims its fiber network is helping to drive traffic, but others aren't so sure the effect is one worth bragging about. Last month, Andrew Schmitt, an analyst for Nyquist Capital, analyzed data stemming from Japan's considerable FTTH networks. (As Japan leads the world in FTTH deployment, Schmitt called it “the world's de facto FTTH testing lab.”) Japan's Ministry of Internal Affairs measured traffic to and from six large ISP nodes, representing about 40% of all broadband traffic. That data showed Internet traffic roughly doubling over the past two and half years for a compound annual growth rate (CAGR) of 38%. But by adjusting for broadband subscriber growth, Schmitt pointed out that per-subscriber growth was much lower. As fiber erupted throughout Japan, the average amount of traffic downloaded by each Japanese subscriber grew about 53% — from about 187 Mbytes per day to about 287. That is a CAGR of only 18%.

“The aggressive deployment of fiber to the home is not driving high bandwidth growth rates in Japan,” Schmitt wrote in his blog. “Japanese Internet use … isn't even doubling every three years … What if the demand for massive increases in bandwidth outside a small circle of users simply does not exist?”

There might be other explanations for the pattern seen in Japan, Schmitt said. The government's data might be flawed, for example, or the proliferation of public and private content delivery networks might have some unseen effect. “I suspect the problem with Japan is no one has figured out what to do with the fat pipes,” he wrote. In any case, he's not the only one scratching his head over the numbers.

“Japanese [Internet traffic] growth is even lower than ours,” Odlyzko said. “Their traffic on a per-capita basis is only about the same as that of the U.S., which is surprising given that they have huge pipes.”

And the phenomenon is unpredictable from place to place. For example, Hong Kong's fiber broadband is comparable to Japan's, but Hong Kong's per-capita Internet traffic is about six times higher than Japan's, Odlyzko said. “There must be some kind of cultural or institutional difference. [Perhaps it] reflects a degree of copyright enforcement. Who knows?”

That geographic inconsistency reinforces the notion that what happens in Japan won't necessarily happen in the U.S. Although fiber here may well spur traffic explosions, the rate of growth will depend on any number of factors, including, importantly, the strategic moves of service providers.

“The growth rate depends to a large extent on what the industry does,” Odlyzko said. “It wouldn't surprise me if the [U.S.] growth rate went up to 100% for some period of time, if the industry adopted the right measures and maybe got the right cooperation from Hollywood, etc.”