As CEO of Nortel, John Roth had the unfortunate duty to tell the world two weeks ago that his company was about to report one of the most disastrous quarters in business history, a loss of more than $19 billion. But as he tried to explain what's gone wrong with his company, whose equipment carries three-quarters of Internet traffic in the United States,

Roth threw in an almost offhand comment: Nortel, he said, had seen Internet traffic decline for the first time in history.

Roth was probably just doing what any responsible CEO might in his situation - blame the industry for his company's woes. But in doing so, he called into question one of the fundamental tenets of the Internet. For almost anyone in the industry, the suggestion that online traffic could be declining is a shocker - the Internet has been claiming some of the most fantastic growth rates in the history of business. Days later, Joe Nacchio, CEO of Qwest (one of Nortel's best customers) held an angry conference call in part to refute Roth's statement about traffic, which he called "legally misleading." He added, "I don't know who they were talking to, because ours is up 46 percent."

Nortel has since admitted that Roth overstated the case. What he meant, say the spinners, was that just a small segment of the market was shrinking, and Nortel did not see the negative trend continuing. But it's too late now - Roth's comment revealed a telecommunications industry racked with anxiety, and for good reason. The once indefatigable Internet sector has turned into a slaughterhouse. The financial markets have almost completely turned their backs on the builders of the Internet, the telecom companies, which are staggering under backbreaking loads of debt and facing a dearth of services that could boost flagging revenues. With countless companies dropping off the face of the earth, it makes perfect sense to wonder if the phenomenal growth of the Internet is over.

Actually determining how much traffic traverses the Net and placing it in context isn't easy. After all, early growth estimates and incredible hype were carelessly entwined, repeated, amplified and spread by media outlets and popular pundits like George Gilder. Soon, certain presumptions became accepted fact, most notably that the Internet was doubling in the amount of traffic it carried every few months. (Most reasonable observers now think Internet traffic was doubling every 10 to 14 months at its peak.) It's impossible to know just how many leaky business plans were launched on this premise.

And the hype continued. From 1999 to 2000, most Internet networking companies claimed they saw traffic increasing at rates anywhere from 200 percent to 800 percent annually. Though few people were willing or able to bust the myths about Internet traffic two years ago, it's difficult to find anyone who will stick up for the estimates today. "I guess this is an opportunity to set the record straight," says Jim Crowe, CEO of Level 3, one of the leading carriers of Internet traffic, which laid off 25 percent of its staff a week ago in an effort to survive the carnage. "I have been associated with the Gilder crowd and the notion that traffic would double every four months. What I actually said, back when I was associated with [Internet networking company] UUNet, was that that company's traffic was doubling every four months. But that was a far cry from saying that global traffic was doing that."