Bandwidth Shortage And The Telephone Company 170
FasterThanLight writes: "This article from USA Today regarding (non)usage of existing fiber and its impact on bandwidth in the semi-near future ... more doom and gloom. Why? Greed, of and by the (surprise, surprise) large telcos." Remember, this story is about a predicted shortage, not a current shortage.
Dont agree (Score:3, Informative)
The last mile problem is not being solved because cable and dsl are much less popular than everyone thought they would be.
People are not flocking to cable and DSL and communication companies are seeing little point in releasing something better.
Re:Dont agree (Score:3, Informative)
SBC is required to offer carrier service to Covad at an externally determined price level. If that isn't a subsidy, what is??
The last mile problem is not being solved because cable and dsl are much less popular than everyone thought they would be.
Chicken and egg. They are unpopular because they are unavailable. Less than 20% of homes in the US can obtain both or either of these services. Cable modem is more popular as the cable operators are not fetterd by the FCC competition subsidies the Bells are saddled with - and this is exactly why the FCC is going to roll these back.
In any case your point makes no sense - its not about demand - its about creating markets by taking risks. The Bells aren't going to put out more capital to support their competitors (even if SBC is a significant shareholder in some of them).
Bandwidth Shortage? Not in some areas... (Score:2, Informative)
- Budget of $4 Billion
- Expected savings of over $2 Billion / year upon completion
- Timeline 8 years (compared to 20 converting from analog to digital)
- Using Cisco WAN switches (ATM upgradable to TCP/IP)
- ATM/Frame Relay based (not TCP/IP because not enough prioritization available - for now)
- Will allow broadband Internet to EVERY home serviced by Sprint (regardless of distance, location)
See http://www.lantimes.com/98/98jun/806b001c.html for more information about this plan.
This frees up a lot of dead space in voice and data calls to handle other communications - rather than tying up a circuit for each call. They claim up to 70% cost decrease from a traditional circuit based network. Assuming that even a modest 50% of this cost cut is passed on to consumers, bandwidth will cost 35% less than before, not more.
Mmm... Taxpayer-funded dark fiber! (Score:2, Informative)
A NetAction White Paper
http://www.netaction.org/broadband/bells/
Basically, remember all that talk about 500 cable channels? The phone companies made all this hype, got some money from the counties, states, feds, and then kept charging lots of money for things. Hmm...
I wouldn't mind a little fiber hookup...
certron
(i should post more. maybe I could say something intelligent once in a while.)
That's about right. (Score:5, Informative)
Sorry, but my bogosity meter is banging against the peg on this one. Anybody have any real figures on this?
That's a reasonable number.
When you're burying the fibers it costs you a bunch to dig a trench. That's because the trench goes around the whole continental USA, plus a few cross-paths. Every major city has to end up with two trenches connecting it to two other cities (so if the fiber going one way gets cut the signals can be rerouted to go around and come in the other way).
It costs you a LOT to dig that trench. If you put the minimum two fibers you need in it, when you need more you'd have to DIG ANOTHER TRENCH. So you put in a BUNCH of fibers. You don't want to dig another trench for a century or so.
The extra individual fibers cost next to nothing compared to the trench, even after you include the cost of the splices. The total cost is still enormous. But once you divide the cost of the trench among all those fibers the cost PER PAIR OF FIBERS is small - approaching the cost of the fiber itself.
But now you go to light them up. This means a box at every city or town along the way where you want to hook up, plus maybe several repeaters in access boxes EVERY MILE along the fiber (the spacing and cost varying according to the type of fiber and what type of signal is going through it - but it's not cheap). For packet switching you need maybe a million bux worth of box in each town for each fiber pair you light up (though lighting extra fibers can be done for maybe a quarter of that by adding cards to existing boxes.) For phone calls and raw pipes, maybe an eighth of that (though that just lights and protection-switches the fibers and hooks them to the local signals with a few fat pipes). And a rule of thumb is that the rack space for the box costs more than the box.
20-to-1? Might be low.
Of course the repeaters and boxes both get better roughly by Moore's law. So if you can hold off lighting a fiber for 18 months, it costs you half as much. So of COURSE you don't buy boxes and repeaters until you're ready to light the fibers.
So the analysts looked at all the dark fibers, forget about all the non-installed boxes, and started prattling about a "bandwidth glut" - as if nobody would buy another box for 20 years.
Meanwhile the tellcos had bought enough boxes to light their first fibers (plus a couple spares). So there was a dip in box purchases while they switched to finding customers to use the bandwidth on the first lit fibers. (One set of fibers has a LOT of capacity, so purchases are lumpy.) And the tellcos got into a price war to get those customers - with the little guys getting squeezed out by the old former monopolies with their buckets of cash.
So the investors paniced. And investment in "telecom" dried up. And without investment the squeezing proved fatal for the new little guys. And without the little guys nipping at their heels the big guys started taking their time (though they're still installing and still filling up their current boxes - plus the ones they got for near-free from the dying little guys). And without investment nobody bought more of ANYTHING, creating a self-fulfilling prophecy and crashing the stock of anything tarred with the name "telecom".
But even with the big guys dragging their feet the boxes ARE getting filled up, just like the article says. Some time soon the surviving companies will need to buy more. And the surviving suppliers will have less competition and ZERO inventory (having long since switched to build-to-order as a belt-tightening measure, and also sold off all their pre-made stuff at fire-sale prices).
After all - do YOU have broadband yet? On slashdot, probaby yes. But don't you know somebody who doesn't, but wants it and can't yet get it?
They're STILL doing the INITIAL buildout - and the "broadband" pipes are still tiny compared to what people WOULD buy if it were available and the price were right. Only a couple percent of the country has broadband. A LOT more people want it, and will get it as soon as it's available. (As of a couple months ago the tellcos expected to install as much DSL this year alone as had been installed since it was invented.)
Seems to me the article is right on. The current "telecom crash" is at least partly due to a panic reaction by investors, and the result will be a bandwidth crunch as the boxes fill up and there is a sudden need to buy more - creating a seller's market for the surviving suppliers.
Re:Dont agree (Score:3, Informative)
A subsidy is when they have to offer it below cost.
SBC has always been subject to price regulation. State government generally set rates of return and went over every price in their tariff, in exquisite detail, for over a century. In the 1990s, with competition on the horizon, the telcos won retail "price caps" and more flexibility. This was a bet on their part that costs would fall quickly as new technology came on line and, frankly, they busted some unions.
But things that remain a monopoly require price regulation. So SBC basically has a choice, facilitate competition (play by the rules) or accept price regulation, to get a rate of return equivalent to a successful company in the market. They want option 3, an unregulated monopoly. Sorry, no dice.
Re:Uh, I think they got it wrong. (Score:3, Informative)
2. There are several types of fiber, and not all of it is suited for DWDM.
3. Streets are dug up every day to install water pipes, sewers, etc. Laying fiber is dirt cheap compared to the backend switching equipment.
3a. Gigabit ethernet is a joke for WAN. Sonet/SDH, ATM and MPLS are what works/is used. None of the above is cheap. Switches, port interfaces, switching fabric all costs a truckload of money.
4. Greed? How about just getting paid? The big switch makers financed so many start-ups that it killed them when they went under. They lost billions and are cutting things left and right to stay afloat. Telco spending is down 30%+ from last year.
It WILL come back, but a brief shortage is possible. not a lot of comapnies have the $$ right now to shell out to light that fiber.
Re:But telcos are -smart-! (Score:3, Informative)
And if I recall, part of the standard was that 10GbE devices would be specifically geared for use with dark fiber. Am I wrong here? Anybody on the IEEE standards committee like to comment on this?
And finally, as an overseas American in Asia, I get the distinct impression that consumer telecoms in the US are falling behind what's going on in other parts of the world and I just can't believe that's going to continue. We've got no bandwidth problems where I'm at and we've got lots of options. Even the monopoly networks offer really cheap and fast DSL and then there's the competition offering fiber to the desktop or CAT5 into your aprtment for like twenty bucks a month. I can't imagine the US really has it so bad if we've got it the way we do here.
Re:Reality Check. (Score:3, Informative)
You are quite wrong. I expect highspeed to be affordable, as do 200 million others in the US. 1.5Mb access for $40-$50/mo is actually TOO MUCH to ask; in fact, regular citizens think it should be closer to normal services: $15-$30/mo. Personally, I think $40-$50/mo should get me 5-10Mb. The fact that I'm stuck with asynchronous cable (300Kb~2.4Mb depending on usage and provider), a hybrid system, is a sad testiment to the truth of the original story.
Hybrid systems suck. They're not even meant to be a permanent solution. You get hybrid on the way to digital. But with the Telecom drop-out, nobody wants to finish the badly-needed transition. Nobody wants to swallow their medicine, because it might be poisonous.
The flip side is that Telecoms like this two tier system of digital and hybrid. They get to charge for data services out the nose to digital users and they get to dangle the carrot of highspeed "broadband" to the rest of the customer base. Who would want to upgrade in a situation like that? Face it, T1s cost $800-$1600/mo not out of some legitimacy, but out of insane costs. Because Telecoms got caught with their pants down, they've taken a "good enough" stance with regards to highspeed data services. The Telecom shakeout only shown a light in on the failures of Telecoms to maintain potential in their infrastructures or plan behind the next quarter.
This is only going to get worse. The bill to deregulate price fixing on the lines leased by Telecoms and the court ruling that cable is not a part of the Telecoms opens wide the floodgates of mediocrity and stagnation. People want T1 speeds for sub-$50/mo and it's NOT an unrealistic desire.