When do you suppose our local telecommunications employees will get the memo from headquarters that fiber optics really is the future, the immediate future of the industry and their company? Recall all that noise about not needing fiber and blather about services rather than bandwidth?
A press release by Technology Futures, sponsored by “a consortium of telephone companies comprised of Bell Canada, BellSouth Telecommunications, Qwest, SBC, Sprint, and Verizon” reports:
According to a new report by Technology Futures, Inc. (TFI), by 2006, one-half of U.S. households will subscribe to broadband access, and a shift to much higher data rates in the range of 24 Mb/s to 100 Mb/s will have begun. By 2010, U.S. broadband penetration of 75% is likely, and 10% to 20% of U.S. households will subscribe to very high-speed-broadband. In the process, most of the local exchange carriers current investment in copper cable will be made obsolete.
From the website, a depiction of the transition to very high bandwidth and accompanying remarks:
The upper curve shows TFI’s forecast for broadband penetration in general. The bell-shaped curves show successive broadband generations broadband, each characterized by a higher nominal data rate. These curves reflect the general tendency for bandwidth demand to increase along with computing power and memory. An important transition begins in 2006 with the 24 Mb/s generation, which will require fiber optics to, or close to, the home.
TFI is brutal in its analysis of the weakness of the phone company’s current network. An separate report gives us this analysis:
Illustrated in this figure is the forecast transition from standard broadband (as provided by ILECs today on copper cable with DSL or T-Carrier) to very-high-speed broadband (mostly on fiber) that operates at 24 Mb/s or above. The figure assumes that ILECs capture about one-half of the very-high-speed market, meaning that ultimately total ILEC lines stabilize at about 100 million. However, to accomplish this, ILECs must evolve from predominately circuit-switched, narrowband, copper-based networks to packet-switched, broadband, optical-based networks. This will not be easy because competition will be simultaneously stranding large quantities of network investment. The long-run alternative is illustrated by the dashed line in Figure 1.2 with total ILEC access lines falling to 63 million lines by 2015 and 43 million by 2020.
Taken together we can see that the phone companies are paying good money to be told that to save half of their lines to the home they will have to move to fiber immediately; the alternative is to lose more than 3/4 of their most valuable assets—their direct line to the home—by 2020 while demand for high bandwidth that only fiber optic based networks can provide rockets far beyond the level that most of these companies (save Verizon) have been willing to contemplate.
This analysis is also a ringing endorsement of LUS’s fiber optic strategy. LUS has implicitly made the judgment that high bandwidth is coming soon and that the only way for Lafayette to get ahead of the curve is to provide it for ourselves. A glance at the above curves will confirm that they are not alone in that judgment.
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