The Internet traffic is non-local (as was discussed above),
meaning that there is no correlation between locations
(both geographical and topological) of communicating parties.
In the Internet most traffic is carried by several
backbones of comparable size, so most packets will
traverse one of exchange points.
For a number of reasons described in previous chapters, the
number of exchange points is likely to remain relatively small;
i.e. the switching or routing equipment at exchange points must by
necessity have the highest capacity, and the exchange points
are and will remain the most congested places.
Unlike congestion related to an under-built infrastructure, which is
easy to remove by adequate line capacity provisioning, alleviation
of congestion at exchange points requires pushing the envelope
of router performance.
Given exponential Internet traffic growth, the growth of traffic crossing
exchange points is also exponential, which is exactly the phenomenon
observed in practice (a few years ago the most loaded
exchange point, MAE-East, was a shared 10Mbps Ethernet).
Like the total Internet traffic, the traffic over every exchange
point is doubling every 6-12 months.
Increasing the number of public or private exchange points incurs
unproductive expenses and increases the route flap amplification
effect and the difficulties of traffic engineering; so ideally the number
of exchange points should be about a dozen worldwide.
This means that a radically new solution must be found to accommodate
the future growth.
The current IXP architecture is very much like the architecture of
backbone POPs:

Each participating internet service provider has its own router
co-located at the IXP site and connected to the shared LAN.
The reason for co-location is to allow easy addition of private
bilateral links to offload traffic from the shared LAN.
The routers perform routing policy computations on routing information
learned from peers at the exchange point, announce ISP's interior
routes to the peers (filtered accordingly to the routing policy),
and forward packets to the appropriate members of IXP.
Obviously, the performance of such an exchange point is limited by the
performance of the IP routers and bandwidth of LAN connections.
The most frequently proposed "new Internet" architecture assumes that
backbone ISPs will have ATM backbones interconnected likewise
at several exchange points (the more complicated routing algorithms
required for connection-oriented networking make the routing flap
problem even worse for global ATM networking), so the resource
reservation on switched virtual circuits could be performed across
several backbones.
However, it is easy to see that given the high non-locality of
Internet traffic, most virtual circuits will have to traverse
the exchange points; so the computing power of the control units of the
ATM switches at exchange points will have to grow exponentially
to handle the requests for the creation and removal of virtual circuits.
Again, the rate of such growth exceeds the rate of growth of capacity
of semiconductor devices; i.e. the collapse of such a network is imminent.
In fact, a global switched-circuit data network cannot be built even at
the present day Internet size -- some measurements show that the busiest
Internet routers presently handling connections between the US and Europe top
at about 0.7 millions of simultaneous TCP sessions (which would have to be
encapsulated into virtual circuits).
No known technology is able to sustain corresponding rates of creation and
removal of the virtual circuits (about 60k events per second).
An ATM-based interconnection of flattened networks looks more feasible,
and the corresponding interconnect architecture is shown in the following
picture:

Note that there's only one virtual circuit connecting the networks.
Introduction of a greater number of such circuits would have the same
effect at IP level as multiplication of the number of exchanges (i.e.
the network will get amplified route flap).
A closer examination shows that all inter-network traffic still has
to go though a single router on each side (or, at most a few routers), so
the scalability of that approach is no better than that of the conventional IXPs.
It is interesting to note that conventional telephony does not have
the exchange point problem, because long-distance companies (the
"backbones") do not forward traffic to each other.
The current telephony network configuration is shown in the following picture:

This is possible only as long as Regional Bell Operating Companies (RBOCs)
have the monopoly on end-user service in their local areas (LATAs).
Deregulation will make the telephone carriers face the same problem of
capacity of exchange points.
(In fact, in those rare cases when long-distance companies do forward
traffic to each other, as in the case of international calls, massive
machinery is required to serve the amount of traffic concentrated
at those points - compare that with several IP routers that can fit
in few racks that currently provide comparable gateway functions for
transatlantic Internet traffic.)
The conclusion is very simple: delivering data at exchange points requires
native IP routers.
Those IP routers should be at least as fast as backbone switches;
i.e. usage of ATM in backbones does not yield any performance advantage
if inter-backbone traffic is considered.