The need for speed.

While reading up on the news that is related to our industry I found the following two stories that I thought needed to be mentioned and commented on.

As quoted from this article,

"Charter Communications, Inc. (NASDAQ:CHTR) today announced that it has begun offering video mail as part of its Charter High-Speed(TM) Internet bundle of services. Charter Video Mail(TM) is available free of charge to customers, regardless of the speed of their connection. While a webcam is required to send video mail, no additional equipment is required to receive it."

Further down in the article is this paragraph,

"Ms. Hedges said the constantly-evolving high-speed product is designed to meet the needs of customers and stay ahead of the competition. 'Internet service is a highly competitive offering,' she said. 'We compete on price, speed, security, content, features and functions. 'Video mail is a feature that will prove to be very popular with a certain segment of the high-speed market.'"

Later in the same article we find this,

"Charter Video Mail -- using the Vibe Solutions Group platform -- provides for up to 45 seconds of recording time, with ease of recording through VCR-like (stop/record/preview) functionality. For customers with speeds of 3 Mbps and higher, the service also comes with Greeting Card and Story Teller applications. Greeting Card includes more than 40 different video greeting cards that can be customized with a special message. Story Teller enables a user to assemble and record pictures in a video slideshow to share with friends and family.

For the receiver of video mail, retrieval simply requires clicking on a link. Rather than being stored in the recipient's inbox and taking up capacity, the video mail is stored on a server for a full 30 days."

So, this is a bandwidth hungry application that is being rolled out by Charter who believes that it will appeal to a "certain segment of the high-speed market."

Next we have this article and the following quote,

"Owners of Portable Media Centers, smart phones and pocket computers will be able to download daily programs and other video content from MSNBC.com, Food Network, Fox Sports, IFilm and other content providers, Microsoft said. The company had announced plans for the MSN Video Downloads service at the Consumer Electronics Show in January.

Microsoft said about 20 content partners, including CinemaNow, MTV, Napster and TiVo, have agreed to make video formatted for devices using Windows Mobile since the launch of Portable Media Center last year."

A little further down in the article is this quote,

"Microsoft said subscribers will be able to select content such as sports clips, news headlines and music videos from the MSN Video Downloads Web site. Some content can also be downloaded to PCs running Windows XP. The service is available in the United States for an annual subscription of $19.95. Some free content also be available without a paid membership."

We keep talking about customer usage patterns as though they are static. The idea that information from 2002 might be useful in predicting anything in 2006 other than what the historical values were seems ridiculous to me. As these two articles clearly indicate, we are not in a field that is linear, far from it. Rather than a slow evolutionary climb we are more faced with a punctuated equilibrium where we will see sharp climbs that plateau for an indeterminate amount of time before we see another sharp rise again.

To illustrate this I would like to point out what happened when Napster first became mainstream. (Let's leave the legality issue out of this, we don't need any red herrings introduced in this discussion.) In a matter of a few months dialup ISPs noticed a steep rise in both bandwidth usage and duration of connection time. This one application caused a number of people to become disenchanted with dialup and convinced them to make the move to broadband.

We keep talking about what the next "killer application" will be as though this would be just one thing that would all of a sudden capture the entire population and cause a huge surge in traffic. What if the next "killer app" turns out to be a number of smaller applications that all converge over a short timeframe?

The real questions that needs to be asked is, does anyone really believe the demand for bandwidth will go down? I submit that there is nobody out there who can put forth a qualified argument stating it will. The issue is how fast will the rise in bandwidth happen and how fast can we accommodate it.