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Akamai (NASDAQ:AKAM) is out with another one of its regular reports on Internet speeds and it makes fascinating reading.

First, because it's so positive. Broadband speeds are rising everywhere. The Internet market keeps growing upward and outward.

Second, because of where it's best. Nations that want to be high tech hubs in the future, like Latvia and Malaysia, are making strategic investments in their infrastructure and getting some big speed increases. Average connection speeds in Malaysia, for instance, have nearly doubled over the last year, and speeds in Latvia have hit the global top 10.

Third, and most important from an investor's perspective, is how these faster speeds are being achieved. Mainly it's by pursuing a strategy Akamai has pursued since its following, pushing the core closer to customers.

Core Internet is a highly competitive market. There are a lot of suppliers, equipment keeps getting better as fiber networking becomes standard, and thus margins are always rather thin. You can see it in Akamai's own results, which are good but not outstanding. Quarterly revenue is up just 20% year-over-year, margins are steady but thinning in the range of 25%, and it's only when you step back to a year-by-year view that you start to see the growth. The balance sheet is attractive, with no debt and cash now equal to nearly five months of revenues.

In the core, suppliers compete with both carriers and customers. Akamai helps companies mirror content in many places, making for shorter hops to customers. But this is how big cloud companies like Google cut their transmission costs as well. And carriers find this the right strategy for keeping up.

Another important lesson, familiar to anyone who studies infrastructure or urban design, is that it costs less to build new than to rebuild over what's old. A lot less. It costs a lot less to build a network with fiber than to relay fiber over copper. It costs less to put new data centers close to customers than to build the intervening infrastructure.

There's also good news for the U.S. in this report. While we don't have the fastest connection speeds, we're the second-leading source of traffic, connection speeds increased 29% here year-over-year, and peak traffic rates are up 39% over last year.

The faster, bigger market defines the opportunity for all vendors of Internet content, from the giants like Google (NASDAQ:GOOG) to the social networks like Facebook (NASDAQ:FB) to game companies like Electronic Arts (NASDAQ:EA). For all these companies, and more, it's not a question of whether growth is coming, but how much, and how much they can make from it.

And this is the best news of all in this report. Things are looking so good in this space you have to wear shades.

Source: Akamai Report Shows Core Internet Growth Remains Strong