Cable companies are testing 100Mbps cable modems, an Aussie PhD claims to have found a way to make DSL ramp up to 250Mbps within 3 years and Verizon is trying out some 400Mbps connections on its FIOS service. Big numbers, but the Internet backbone probably can't handle it. A recent study predicts that by 2010, we'll start to see slowdowns because of inadequate fiber optic capacity unless backbone providers double their planned construction to $137B.
It's not going to get any better either. TV viewers have been ditching the boob tube for online video, consuming it more voraciously than they did its broadcast cousin. The XBox 360 is rumored to be incorporating IPTV features, bringing online video into the living room en masse. Akamai recently opened a portal for HD video content. Even IP laggard Qwest is rumored to be taking a hard look at IPTV and snatching up video franchise agreements. All that video has to have some way to get from point A to point B and the consensus is that a high-fiber diet is the way to do it.
Even scarier is the price of not doing it. Studies have shown that high-speed connections promote job growth and the resultant telecommuting increases worker satisfaction and productivity. Despite this, the US continues to slip in world broadband rankings. It's not that there isn't demand either. Engineering and medical firms need to be able to transfer large files quickly to multiple locations, but the infrastructure to do it economically just isn't there.
There is some light at the end of the fiber optic tunnel. Researchers in Japan have found a way to bring fiber optic lines up to terabit-class connections using some improved algorithms and a new kind of laser while BASF is trying to find ways to make the exchange of data from optical to electrical transmission much more efficient using crystals. There's also talk of using the Universal Service Fund (USF) to start encouraging better broadband deployments (though given how mismanaged the USF has been, this may or may not work so well). Think tanks and consumer groups are also calling for a different kind of regulation that lowers the high cost of market entry (a prime factor in preserving our current duopoly) and keeps the incumbents accountable.
At the end of the day, it's going to take a lot more than the status quo to make sure the Internet doesn't collapse on itself.