Research firm TeleGeography said yesterday that International Internet traffic continues to grow, albeit at a slower rate.

The company said traffic grew 53 percent from mid-2007 to mid-2008, down from a 61 percent growth rate in the previous 12 months. International Internet capacity on ocean-spanning optical fibers increased 62 percent. On average, Internet traffic now uses just 29 percent of the available bandwidth.

It's not all roses and rainbows though. The effect for carriers is that eventually they will need to consider adding more capacity. ISP's are having a difficult time as Web traffic continues to grow (thanks Video) and in the past week we've heard rumors that bandwidth caps on the heaviest users is inevitable.