Metcalfe's Law

Metcalfe's law states that the "value" of a telecommunications network is proportional to the square of the number of users of the system. First formulated by Robert Metcalfe in regard to Ethernet, Metcalfe's law explains many of the network effects of communication technologies and networks such as the Internet and World Wide Web.

The law has often been illustrated using the example of fax machines: A single fax machine is useless, but the value of every fax machine increases with the total number of fax machines in the network, because the total number of people with whom each user may send and receive documents increases.


Caveat. Whether Metcalfe's law is "true" depends not only on the number of "compatibly communicating devices". Several counter-effects such as congestion (occupied telephone lines), the scale of a network (most of the Internet users have nothing in common to communicate about) or the growing complexity of a network might offset the benefits of an ever proliferating network.