Akamai sees growth slowing. Last mile bottleneck to blame.

Akamai and other content delivery networks have been enjoying rocket like growth thanks to the explosion of rich media content. The company recently predicted growth would slow due to the hard lst mile limits being imposed by broadband access providers.

……the big news was Akamai’s outlook (statement), which indicated that the company would land on the low end of its earnings and revenue target. The company said it expects 2008 revenue to be at the low end of its $785 million to $800 million range. Earnings will also fall at the low end or below the previous 2008 outlook calling for earnings of $1.63 a share to $1.69 a share. The third quarter will also be seasonally slow with revenue between $193 million or $198 million with earnings between 39 cents a share and 40 cents a share.

CEO Paul Sagan cited a “challenging environment” in the company’s statement, but there are also worries about the amount of content that U.S. users can realistically consume. Sagan noted that Internet traffic wasn’t slowing, but growth rates are being affected by broadband speeds. Sagan’s message: Unless broadband speeds perk up the ability of consumers to watch content (the type that Akamai delivers) will see slower growth. Sagan would like to see the day where you can get high-def video over IP. (ZDnet)

The duopoly has seen a recent slowing in subscriber growth, as the easiest to reach customers have been connected.  Continual lack of investment in infrastructure has brought growth in available bandwidth for most to a standstill (with a few notable exceptions like FIOS that are avaiable in very limited areas). No investment will come as long as speculative investors are fascinated with quarterly results and pay TV.Customers and long tern shareholders be damned as long as fund managers favor quick stock flips over sustained growth.

If nothing changes, broadband stagnation will become every bit as big of a drag on the economy as high gas prices. The same cast of characters are to blame for both. Another cartel, speculators, and a parliament of whores bought and paid for by the first two.