GartnerGroup sees fast times on the Internet

While the 'Internet 2' now being built may be the exclusive province of academic and research communities over the next five years, the new 2.4Gbit/s network will shape the future infrastructure of the commercial Internet as well. Internet service providers (ISPs) participating in the project will use their Internet 2 research and development efforts, underwritten by the US government, to introduce enhanced services commercially by 2002, according to the GartnerGroup.

While the "Internet 2" now being built may be the exclusive province of academic and research communities over the next five years, the new 2.4Gbit/s network will shape the future infrastructure of the commercial Internet as well.

Internet service providers (ISPs) participating in the project will use their Internet 2 research and development efforts, underwritten by the US government, to introduce enhanced services commercially by 2002, according to the GartnerGroup.

For example, several companies are working on a next generation routing and switching infrastructure called "gigaPOP", which will offer low-speed IP routing, but also an ATM switching core that can scale to 2.4Gbit/s and higher. By 2002, the top 20% US metropolitan markets will have direct gigaPOP access, according to Eric Paulak, senior analyst with Gartner's networking group,

Over the next five years, there will also be a major reduction in the number of ISPs, according to Gartner researchers. There are currently 4500 ISPs in the US with revenues expected to reach US$4 billion in 1997. But market competition and consolidation, led mainly by telecommunications service suppliers, will cause that figure to be greatly reduced, Paulak says.

"Looking out five years from now, regional carriers will replace 90% of the traditional ISPs," he says.

Once they have built up their infrastructure, regional US telcos will provide much of the local access for homes and small businesses, and will provide locally focused content by teaming with media like TV stations and newspapers, Paulak says.

Large business customers will be served by ISPs being formed in such consolidations as GTE's acquisition of BBN and Intermedia Communication's buyout of independent ISP Digex.

The flat-rate pricing schemes being offered today will eventually fade away, because they don't provide enough revenue for ISPs to invest in upgrading Internet infrastructure, Paulak says. ISPs like Netcom On-Line Communications Service, UUNet Technologies and PSINet are already moving away from it and rolling out more usage-based pricing. And, according to Gartner's research, 75% of the Internet services for large enterprises will be usage-based priced by 2001.

Meanwhile, economics more than technology will determine how users gain access to the Internet.

The number of people using the Internet is forecast to grow about 30% a year, according to Paulak, but 65% of the nearly 40 million households that will be connected will still be gaining access with a dial-up modem as opposed to cable, xDSL, ISDN or wireless modems.

Noting that 53% of US households have an average annual income of less than US$35,000, even spending US$20 a month for an Internet connection can be a stretch, he says.

During the same five-year period, cable modems will be used in about 4 million households, with xDSL technologies being used by about 5%. ISDN, which Paulak says appears to be peaking now, will be used for about 15% of Internet access.

His remarks came during a teleconference as a preview to GartnerGroup's US Symposium/ITxpo '97 to be held on October 6-10 in Lake Buena Vista, Florida.

GartnerGroup is on the Web at http://www.gartner.com/.

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