May 06, 2009, 8:11 AM — When execs at Time Warner Cable warned of pending internet 'brownouts' if they weren't able to charge more for bandwidth, many people (including me) scoffed at the idea. TWC's financials didn't evoke much sympathy.
But now TeleGeography has an update that, at a glance, seems to back up Time Warner's claims to some extent. According to TeleGeography, bandwidth usage grew 64% in 2008. This growth is spurring "more than 60% of US network operators surveyed" to light new fibers in 2009. Also in 2009, 16 new undersea cables will be laid. For comparison, in 2001, what TeleGeography calls "the peak of the submarine cable investment bubble," 15 cables were put in place.
The good news? In 2001, $13.5 billion was spent installing undersea cables, while estimates for 2009 are $2.6 billion.
So is Time Warner correct? Are we facing a crisis of bandwidth? Probably not. According to TeleGeography analyst Alan Mauldin, 'While the number of cables being laid is impressive, this current batch of new cables won't break the bank,' he says.