June 9, 2017
A new report from Cisco projects that global and U.S. Internet Protocol (IP) traffic will grow at double-digit rates over the next five years. Global traffic will nearly triple while U.S. traffic will grow two-and-a-half times, according to Cisco’s latest Visual Networking Index (VNI). Increased internet adoption, faster broadband, next generation wireless networks, the Internet of Things, and increased live streaming of online videos are expected to drive traffic growth, Cisco says. The data also show the U.S. is expanding its international leadership in internet usage compared to other industrialized nations. Satisfying projected traffic growth while maintaining international leadership will require significant investment in broadband networks and a policy environment that maximizes investment.
Internet Protocol Traffic Growth
Global IP traffic was 96,054 petabytes per month in 2016, according to the VNI data. That’s the equivalent of streaming more than 260 billion DVDs of a two-hour movie per year. Global IP traffic grew by a factor of 3.1 from 2011 to 2016 and Cisco projects that it will continue that growth pattern through 2021 to 278,108 petabytes month, or the equivalent of 760 billion streamed DVDs annually.
In the U.S., internet traffic was 31,352 petabytes per month last year, or the equivalent of more than 85 billion streamed DVDs per year. U.S IP traffic grew by a factor of 3.5 from 2011 to 2016 and Cisco projects that it will grow by a factor of 2.5 by 2021 to 79,640 petabytes a month, or the equivalent of almost 220 billion DVDs annually.
U.S. International Leadership
The data also shows the U.S. remains a world leader in internet usage. In terms of total IP traffic, the U.S. generates more than any other nation in the world. While the U.S. comprises about 4.5 percent of the world’s population, it generated 33 percent of global IP traffic last year. Even as internet penetration in the developing world accelerates, Cisco projects the U.S. share of global traffic in 2021 will remain strong at 29 percent. U.S. traffic will still be almost 50 percent greater than the traffic generated by the next largest user, China, which has a population four times larger than the U.S.
Internet traffic growth in the U.S. is slightly lower than global growth because broadband penetration here is already at 89 percent and is expected to grow to 90 percent by 2021. Global internet penetration was 44 percent in 2016 and is expected to grow to 58 percent by 2021. That means that while global growth is a function of both increased penetration and increased traffic per user, growth in the U.S. – and other industrialized nations – is mostly about traffic per user.
To account for differences among countries in size and internet penetration, USTelecom normalizes the data as either traffic per internet user or traffic per capita. USTelecom has previously shown that the U.S. leads the world and other industrialized nations in IP traffic per user. In 2015, the U.S. overtook South Korea, the previous world leader, in the important metric. In 2010, the average U.S. user generated 26 gigabytes per month, compared to 49 gigabytes per month for the average South Korean user. By 2015, the average U.S. user generated 82 gigabytes per month compared to 71 gigabytes per month for the average South Korean.
Preliminary analysis of the 2016 Cisco VNI data suggests that in the U.S., the average user generated 102 gigabytes of IP traffic per month while the average South Korean traffic per user’s traffic was largely unchanged. By 2021, the average U.S. user will generate 1.8 times as much IP traffic per user as the average South Korean user, according to USTelecom’s preliminary analysis of Cisco VNI projections.
Over the last several decades, U.S. broadband providers have invested in world-leading networks that enabled tremendous internet traffic growth under a bipartisan, hands-off approach to regulation. That changed in 2015 when the FCC abruptly changed course and reclassified broadband providers as heavily regulated utilities. In recent years, broadband provider capital investment has leveled off and showed signs of decline.
Cisco’s latest data demonstrate the need for significant investment growth to accommodate expected demand. The FCC needs to return to a more investment-friendly policy climate that will encourage greater investment in broadband infrastructure and will sustain our international competitive edge.