Cisco chief executive John Chambers' prediction long ago that video one day would disrupt the Internet is nearly a reality. On Tuesday, the company announced a powerful router designed to help make that prediction come true.

With 100G networks still something of a Holy Grail in networking, Cisco believes its new CRS-3 router will represent a powerful central nervous system for enterprises wishing to reach that goal. The Federal Communications Commission is a proponent of sweeping broadband improvements, which are articulated in its National Broadband Plan to Congress.

Cisco claims the CRS-3, which will be available in a few months for prices beginning at $90,000, has 12 times the traffic capacity of its nearest competing system. The Tuesday announcement was hyped for weeks as an event that would "change the Internet forever," and the implication now is that Cisco is betting on the CRS-3 as its entry in the race to roll out 100G networks.

Pankaj Patel, SVP and general manager of Cisco's Service Provider Business, predicted the CRS-3 will become the company's flagship router of the future and will form the foundation of intelligent and advanced broadband networks in the Internet.

The presentation Tuesday also featured an appearance by AT&T's Keith Cambron, who talked about the carrier's successful 100G field trial between Florida and Louisiana as a harbinger of better networking things to come. Cambron, who is president and CEO of AT&T Labs, noted that AT&T's video traffic is growing at a rate of 80% a year.

AT&T has been under pressure to speed up its wireless network, because its exclusive arrangement with Apple to provide the iPhone has pressured AT&T's mobile network while the carrier's landline broadband struggles to keep up with growing traffic.

Praising Cisco's CRS-3, Cambron said: "We are entering the next stage of global communications and entertainment services and applications, which requires a new set of advanced Internet networking technologies. AT&T's network handled 40% more traffic in 2009 than it did in the previous year and we continue to see this growth in 2010."

Cisco said the CRS-3 has three times the scale of its CRS-1 predecessor and two times more service intelligence. It has a total capacity of as much as 322 Terabits per second -- a metric that translates to the downloading of the entire printed collection of the Library of Congress in just over one second.

The CRS-3 has been developed to enable its users to access both traditional networks and emerging data center clouds. The router features a Network Positioning System that covers Layers 3 to 7 application information. Its cloud virtual private network with Infrastructure as a Service (IaaS) paves the way for "pay-as-you-go" services.

Cisco's new QuantumFlow Array processor, included in the CRS-3 design, enables users to access unprecedented levels of applications and devices while consuming a low level of power, according to Cisco.

Chambers said the Tuesday Webinar (liveblogged here) was not just about the CRS-3, but was really "an announcement about the future of InternetYou will see a series of announcements coming."

In a sense, Cisco is travelling full circle in its Internet vision -- from Chambers' prediction about video as a disruptive force, to the CRS-3 and the firm's belief it will sit at the core of the Internet vision with consumer video at the edge.

As if to illustrate the point Chambers on Tuesday waved around a Flip video camera from Pure Digital Technologies, a firm Cisco acquired last year.

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