Something we learned during the Covid pandemic was that the way internet service providers engineer their networks--adding capacity in advance of demand--does work to handle unexpected demand spikes. They have been effective at building networks that can withstand even an unexpected and sudden change in the demand curve.
On the other hand, it always also makes good business sense to invest in additional capacity only with respect to anticipated demand increases, whatever rate you believe reflects actual demand growth. AS it turns out, ISPs and their suppliers also have been good at "efficiency" in supplying new capacity.
This forecast by Point Topic illustrates the concept. Given expected demand growth, capacity growth is planned at a rate that stays ahead of demand, but not too far ahead.
In other words, investment is matched to revenue. The trick always is that customer segments exist. Some customers have higher demand than others. The geographic locations of those customer segments also is mixed. Business locations are mixed in with consumer locations. Higher-demand home worker locations are mixed in with lower-demand “average consumer” locations.
In other words, the whole network embeds assumptions about the minimum performance that must exist to handle the peak load by the heaviest users. At the same time, it makes sense not to “over-engineer” the network, adding cost that has no corresponding revenue upside.
So much hinges on how fast any firm believes typical demand will increase. Is itr 50 percent per year; 40 percent per year or some lower figure? Those assumptions might also fail to account for improvements in networking infrastructure efficiency or the emergence of new bandwidth-intensive applications that change demand expectations.
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