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Bandwidth Shortage And The Telephone Company 170

Posted by timothy
from the companies-like-to-make-money dept.
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.
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Bandwidth Shortage And The Telephone Company

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  • Reminds me of an amusing story. When I worked, for a very brief time, at a telco (Sorry, can't name 'em because they're bankrupt now), they had a rather hefty debt to pay off.

    Their business model depended on several fat internet pipes running underseas. Given their current options of selling assets, cutting salaries, layoffs or other such corporate things, what do you think they did to pay off the debt?

    That's right. They sold the fat pipes and leased them back from the buyer.

    No wonder my phone bill is so high.
    • Their business model depended on several fat internet pipes running underseas.

      Gee, let me count the number of bankrupt telco's that description fits. One... Umm, I guess only one.
    • by hillct (230132) on Thursday March 21, 2002 @09:23PM (#3204841) Homepage Journal
      Well, in the case of your telco, it loooks better on the books not to have capital depreciating, so their move made economic sense, from a business finance perspective.

      I have serious doubts about this article though. While they make the single valid point that it costs money to light up a network, there were and still are valid mechanisms for financing that activity. Most of the telcos that have gone under were in debt to the equipment manufacturers like Lucent, Ericson, and Nortel Networks. That is all bad debt now, which causes these manufacturers to cut costs by (among other things) reducing R&D expendatures. This means advances in the industry will not come as fast as they were, but they will still come eventually.

      These manufacturers are still willing to finance the lighting of fiber networks, as needed, (in that such activity requires purchase of multiplexing equipment and switches, the sale of which these companies have financed for the past two decades).

      When it comes down to it, the industry is returning to a pre-tech-bouble state, not dying completely. The determination of which companies will still be standing will be which are able to adapt quickly enough. Unfortunately, this is made more difficult with a Wall Street backlash against the telecom industry, but such things happen and will be overcome in time.

      There will be no shortage because the market is capable of meeting demand. The required financing will become available because it is the only way the manufacturers will stay in business.

      In closing, let me just say that I always get my technology news from McPaper [usatoday.com] because after all they're known for their technical expertise and research prowess.

      --CTH
      • There will be no shortage because the market is capable of meeting demand.

        If the internet bandwidth usage grows at 80% a year then I think shortages are likely. The introduction of video on demand will cause a spike that you really can't predict. Mostly, we will continue not getting every thing we want when we want it.

        The really sad thing, though, is the disappearance of the smaller companies before the growth phase. The current consolidation will give the monopolies the power to ream consumers and stifle and control distribution.

        BTW, I used GST when they ventured into the local market. I wish local competition had emerged, but there were enough saps like me around to keep them afloat.
      • by ahfoo (223186)
        Furthermore, wasn't the 10GbE or whatever the acronym for 10Gig ethernet standard is, supposed to be finalized like last month?
        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.
    • You've hit the nail on the head: the telcos don't understand the business that they are really in.

      Today, customers of the telcos want to moves bits from physical location A to physical location B. If a telco is concentrating on any goal other than this, they are doomed: dumb analog services (e.g. call waiting, message boxes, redial) are just milking a dying cow. Telcos must understand that the end-points now have the smarts - they should just be in the business of moving bits. That means leasing dark fiber, providing redundant circuits, whatever it takes.

      Telcos are selling a commodity: work on that, you stay alive, forget it, you die.
    • It is also possible that in the next 5 years, better hardware will exsist that will tripple the bandwidth on existing fiber. Lets also not forget that while the telco's are sitting on there thumbs, mobile phone providers are going to take over alot of the load that telco's once had thus reducing the load. The idea of the telco's doing a standstill for the next 5 years also sounds unrealistic. The hardware that they mention at a 20:1 on fiber could also drop drastically in price thus leaving plenty of money to drop more fiber.
      • This technology exists now ...

        What the article really says...our current multiplexters & routers are nearing capacity, more will need to be bought.

        My friend at nortel says they are working on over 100 lazers using the same *single strand* (not pair) of fibre. I think most current production systems use 4 lazers on a pair.
  • Semi-OT Rant (Score:5, Insightful)

    by Black Parrot (19622) on Thursday March 21, 2002 @09:05PM (#3204747)


    When I see billboards around town suggesting a second phone line for internet use, I suspect the telcos' plan is to get lots of people addicted to having long internet sessions on their modem, after which the telcos will go running to Congress saying that they need to start charging local calls by the minute due to the excessive connect times in the Internet Age.

    Why, why am I so cynical? Oh, well. It was fun while it lasted. I now return you to the scheduled rants...

    • I would think that it would be in the Telcos interest to get DSL up and running everywhere. It costs more than an extra line and I would think it offers more profit to the telcos than physically going out and installing a 2nd line. Oh yeah, and it's faster. I can't imagine going back to 56K.
      • let's see 385Kb of DSL w/ISP = $40.00,
        128Kb of ISDN =$90.00 /month + $40 for the ISP
        385Kb of fracT1 is $400.00 / month
        If I were a telco it would be a no-brainer, dial-up ISDN and T1 win hands down.
        I'm waiting with baited breath for cable-modems, my connection is at 26400 becuase of ameritech rotten phone lines, but a second line is aready wired to the network interface.
      • I still use a dialup connection -- for connecting on the go with my Handspring Treo. Otherwise I use my DSL line.

        On the one hand my local phone company charges me a lot more for my DSL line than they would for an extra phone line. On the other hand, I'm online all the time and downloading a lot bigger files since I have a much faster connection that doesn't tie up my phone line. So there is likely to be a trade off for the phone between the extra money that they squeeze out of me for my DSL and the extra bandwidth that I eat up just because I can.

        In any case, these kinds of scary predictions have been appearing for years [google.com].
      • You know, first of all, most modern homes (within 10 years) are 'prewired' for a second phone line, right? They just switch which wired pair your using on whatever phones you want... Not to mention they charge you near $100 for the 'install'...

        Second, Not all of us have the option of using DSL... Verizon (who became the local phone company) sees my town (of 5000 people) as a non-market so they refuse to offer anything beyond phone lines & super expensive ISDN 56k to businesses... The local switching center is state of the art & they could add anything they wanted simply by tossing in the controller box... 99% of the town could be served from that one switching station for DSL...
    • That's not so funny. Before our local telco turned into ALltell they said that exact thing - we want to charge by the minute b/c of internet usage. Phreaking scary.
    • In several areas here, they are multiplexing the phone lines so badly that one can only get 28.8K on dialup. DSL is not available (oh, sure, they advertise it, just try to order it...). The "solution" pushed by the telco (Verizon)? I$DN. 56K at ~$300/mo.

      Which would you rather sell? 56K at $300 or 600+K at $75 or so?

      Actual competition would be nice, but our local cable (Comcast) offers quite spotty service. At least the dialup (I still get ~45-52K) is reliable, that's why I've stuck with it.
      • You have almost exactly described how it is here for me... Does Verizon just do the same thing everywhere?

        In my case though I'm stuck with a speed of 28.8, due to what they have done to the lines...
        • I've got 56k analogue modem (just for those rare times I may need it - not actually used it for over a year).

          I've got 1M/s cable modem (£20 pcm, or $29) which is connected 24/7.

          I can also get ADSL if I wanted - cable was cheaper but the option is nice.

          Then there's wireless internet - likewise, Cable worked out cheaper, but the choice is always good to have.

          Plus I can get satalite internet if I really want fast downloads (56k uploads though - booo!).

          Oh, and of course, ISDN, but who wants something that slow?! :)

          Yup, maybe you should move to the UK if you want high-speed internet access, because there's plenty of it where I am!
          • Well in my case I have to pay back a few thousand extra in college loans (it's a grant, but if I leave my state it's a loan) extra if I moved there... I'd also have to hope you guys needed plenty of networking help... Oh & I'd have to move across an ocean from 99.999999% of people I know (I know one person who lives in the UK)...

            I'd pay $80 a month if theyed just give me a three line ISDN conenction (2x64k & 8k constant connect) or better... I do get by kinda cheap with dial-up though as I only pay $14.95/month unlimited use near constant connect (the phonelines get all freaky & I get dropped after more than 15 or so hours, but I have auto re-dial)...
      • My dialup always stayed under 28.8.... It got to 28.8 once or twice on my 56k, but never above it, and almost never to it.... There were times when it was under 9600 for days at a time. The phone company (Ameritech) was quite unfriendly and unwilling to do anything about it. We've had other problems, such as hearing neighbors in the lines when making calls. And the lines buzz really bad when it's damp outside.... The phone company doesn't really care. We gave up on dialup when AT&T rolled out cable in our area. we were the 1st people to sign up and will be the last to sign off.
    • Why would long call times justify per-minute pricing? Isn't the marginal cost (to the teleco) of local calls not almost zero? Nearly all of the cost is in providing the infrastructure, which is the same irrespective of whether the phone is never used or used continuously. Also, even for the cost of providing a call, isn't the cost of establishing the call far greater than that for keeping the call connected? This is why some telecos in some countries have per-call charges irrespective of the length of the call.
      • Re:Semi-OT Rant (Score:3, Insightful)

        by mpe (36238)
        Also, even for the cost of providing a call, isn't the cost of establishing the call far greater than that for keeping the call connected?

        There is also a cost associated with printing the bill. Do US telephone companies tend to itemise not chargable calls or not?
        • Re:Semi-OT Rant (Score:3, Interesting)

          by jandrese (485)
          No. Local calls (and even "Extended area" calls) are not itimized on the bill. You just get a flat rate bill at the end of each month plus any long distance (which IS itemized, and charged by the minute).

          Note that Extended area is very annoying, it shows up as a per-minute charge (albiet a very small one, 2-4 cents a minute) with no itemization. It's pretty much impossible to dispute charges on the extended area portion of your bill (I used to call an ISP that the phone company couldn't decide if it was in my area or not, sometimes I got charged extended area, other times I didn't.)

    • Why, why am I so cynical?

      Because you are probably correct?

      IIRC, in much of the EU per-minute charges for local calls are the norm, where in the U.S. we have become accustomed to per-minute charges only for long distance service.

      I wonder if I divided my loaded monthly local phone bill by 30*24*60 what my effective current per-minute charge would be.

      I keep reading that network capacity doubles every 9 months, faster even than the 18 mo doubling time of Moore's Law.

      Strange that the cost of BW at the end of the pipe at my house has not seemed to capture much, if any, of this fantastic price/performance gains of the overall network.

    • by Hugonz (20064)
      This is exactly what's happenning in Mexico, the major Telco companies are pushing for a per 15 min. rate. They are responsible, as in the US, for the delay in wide broadband implementation...

      hugonz

  • If there is a shortage... the unused lines will be used due to their value. Waste is lessened with necessity. There isn't going to be a TRUE shortage... rather just a perceived one from quasi-waste. These lines will be used when it becomes a necessity. Remember... supply and demand are closely intertwined.
    • You are quite accurate. A true shortage only occurs when regulation or some similar non market force changes output. An excellent example would be the gasoline shortage in the 70s. It only occured because of price ceilings placed on the price of gas. No ceilings no shortage, less would be sold at the higher price, but there wouldn't be a shortage. This is just markets responding to stimulii. First everyone wanted to invest in telecommunications, debt and equity markets were happy to loan and invest in anything related to telecommunications. Now noone wants to invest in telecom at all. Soon the extra investment will be used, as demand increases and the price increases, and as prise increases, investment will return. Markets are pretty effective at things like this. What created the problem was the flood of investment following the removal of regulation on the industry. Not to say that the regulation was good, but that it being there slowly built up an imbalance and the removeal of the impediment to balanced markets caused such rapid movement that it created an imbalance in the other direction.
    • Yeah, but your run-of-the-mill econ 101 microeconomic analysis assumes a couple of things to come to that conclusion:

      • There are no barriers to entry
      • Investment is liquid and capital is perfectly mobile

      Unfortunately, in the telecom world, these assumptions don't hold up to scrutiny. There are significant barriers to entry (very high capital startup costs, the difficulty of getting a franchise to lay lines, single company control of the lines, etc) and the capital here is not very liquid or mobile. All this leads to large behemoth telco companies that aren't responsive to the marketplace, so we may indeed see an actual shortage. This isn't simply theory vs. the real world: it's a case of applying the wrong economic model. But I digress...
  • This predicted shortage goes right along with the predicted number of spam emails we will all recieve... Maybe we need some creative matchmaking.
    • Re:Coincidence? (Score:2, Insightful)

      by lanalyst (221985)

      A good point. If all the 'waste' were eliminated - codered attacks, spam, etc. I wonder what the savings would yield. If ISPs are faced with increased bandwidth fees that would be a great motivator.

      Looking at the internet 'growth' quoted for last year, I wonder how much of that was non-garbage traffic.

      The sad state is ISPs find it easier to cap their user's bandwidth rather than manage and filter their networks.

  • by sigwinch (115375) on Thursday March 21, 2002 @09:09PM (#3204772) Homepage
    Film at 11.

    Seriously, this is just another business cycle. Lots of people jump in, overbuild for the current market, the market crashes, the survivors consolidate, demand marches onward, business picks up, lots of people jump in, ... Happens to everything: wheat, memory chips, telecom, you name it.

    • Yeah, agreed. We've overshot the real growth in the market and crashed back out, but the real growth (80% growth of bandwidth per year, and the fact that consumers/businesses actually have a thirst for bandwidth that they are prepared to spend money on) is still there.

      I expect there may be another overshoot in about 2-3 years time; the cost of bandwidth may go up or stop coming down so fast for a while; and the telecos will start making some money.
      • Huh?

        Overgrowth is common in infrastucture. You don't build a power plant for today's electricity consumers, you build it for tomorrow's. And you keep building, even when current demand doesn't meet production. The overgrowth absorbs spikes in demand so the system maintains equilibrium.

        This sounds like The Ant and the Grasshopper. Greed is turning telecoms into short-term planners, instead of long-term planners. It's going to bite them in the ass, and consumers are going to be wrung dry in the end.

        Also, where the hell do you live that bandwidth is coming down in price? Bandwidth prices have been going up for the last 3 months, not down like good economics says it should. In order to shield stockholders from the bad news, companies are jacking rates. This is further decreasing the potential customer base, which is worsening the money pit impression investors have.

        What's worse, there was the court ruling on cable not being a true telecom, and the attempt by telecoms to get legislative "fair pricing" on leasing to resellers. Lack of competition and barriers to market entry are going to lead to a general malaise towards "last mile" infrastructure building. This is the last thing the market needs; without fresh blood and a drive towards the consumer's home, the customer pool will be artificially kept small, and prices kept high to maintain stockholder expectations.
        • > Also, where the hell do you live that bandwidth is coming down in price?

          Actually the cost, rather than the price of bandwidth is coming down all the time. The price of bandwidth is rebounding up now because the dot com craze pushed it down artificially.

          Ironically, I live in the UK, and I get my bandwidth from a monopoly, BT; and my price per bit is going down 25% this month, because BT are trying to drum up demand for ADSL. (Seems to be working too.)

          The last mile issue is probably going to more or less solve itself, and there is a business opportunity right now to provide wireless connectivity to the offices from bandwidth consumers.
  • by reaper20 (23396) on Thursday March 21, 2002 @09:12PM (#3204785) Homepage
    Argh, a spam story, sssca and a telco story in one day, slashdot is really pissing me off today. :)

    I can totally see my local telco using this to their advantage. These are the same jerks and assholes who charge an extra $15 a month for a static IP. All I want is 1mbit up and down, and no restrictions on what services I can use (ie. servers). Is it too hard for these broadband 'providers' to offer something so simple? Is it so hard?

    NO, they'd rather spend their cash revamping their websites every 15 days with more 'features', or telemarketing me to death - and we already know that you're only service from a dsl provider is dslreports.com.

    No sympathy from me - I'll continue to get screwed and like it, along with everyone else.
    • Reality Check. (Score:5, Insightful)

      by GigsVT (208848) on Thursday March 21, 2002 @11:09PM (#3205284) Journal
      All I want is 1mbit up and down, and no restrictions on what services I can use (ie. servers). Is it too hard for these broadband 'providers' to offer something so simple? Is it so hard?

      No, it's not hard, in fact it's pretty easy, though it takes a few weeks to set up.

      If you want to run servers, you need to get a real ISP.

      You call up bandwidth.com. You say, Hi, I'm Joe Blow and I want a megabit up and down. They will say "great, a T1 is just what you need".

      The helpful staff will then compile a list of packages you can buy, ranging from about $800-1600/month for 1.54 Mbits/sec in most areas.

      You see friend, in the real world, people have to pay for bandwidth. Your ISP has to do the above when they buy bandwidth, and logically, they can't sell it to you for less than they pay for it, otherwise they won't be in business very long.

      They may get a little discount if they can afford a T3, but that's still $20,000-$30,000 a month, and is about the equivalent to 30 T1s.

      Are all you people that whine that they want 1Mbit up and down, unrestricted, for $30/month math challenged, or just stupid?
      • Re:Reality Check. (Score:3, Informative)

        by TiredGamer (564844)
        The parent was modded as Insightful?

        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.
      • No, my friend, what I see is that in the "real world", people charge as much as the market will bear -- and right now, there are still a lot of businesses that need fast connections badly enough that they'll pony up $600+ per month for each T1.

        Does this mean the individual should be forever doomed to getting much less? Not necessarily. Consider plain old voice lines. Businesses have *always* paid considerably more for the exact same voice circuit than residential customers did. (I believe right now, SW Bell charges roughly $42 per month for an analog phone line run to a business, vs. about $18.50 after taxes for a residential line.)

        Despite this, you don't really see people making a big issue out of it. (In fact, the only time I remember it being brought up at all is when someone orders multiple lines in their home, and Bell starts asking questions.)

        It may seem a little unfair at first, charging two different prices for the same thing; but it's really just another way of dividing things up. Indirectly, everyone helps pay the extra costs that companies get charged - because it's all passed along in higher prices for goods and services you buy from said companies.
      • No, in the real world, when you act like a greedy pig people go around you. When IBM charged too much for OS/2 and OS/2 development tools, M$ was able to crush them by dumping a vastly inferior bunch of stuff. Now M$ is making all the same, and a few inovative mistakes. While the telcos are sitting on top of their dark fibers and rejoicing the Toe-Zan bill, and while the cable companies are celebrating their newfound FCC protections against competition, the rest of us are planning wireless networks to circumvent them. Those who wish to be "the asshole in the middle" are usually remembered only as assholes.

        A larger picture should be kept in mind, though. The government would love to turn the internet into a broadcast media that they can manipulate as easily as TV and radio. The empty TV spectrum is a nsaty reminder of this control. Government will promote control of the physical media by a few large companies they can bully and in turn will give these companies the ability to crush all others. Government will also seek to destroy circumvention of their tools. You will NOT be able to publish on the net and the concept of peer computers will go away.

  • a company has to spend $20 to attach it to all the equipment, configure it and turn it on."

    Sorry, but my bogosity meter is banging against the peg on this one. Anybody have any real figures on this?

    • No figures, but a theory, perhaps.

      Techs are not cheap, especially when you consider things like benefits, office space, and so on, and so forth. If you add up the costs between manpower, networking gear (and the high-end stuff isn't going for peanuts either) and administrative overhead (management) then maybe that number isn't so far fetched.

      Just a thought.

    • I mean digging wholes and putting fiber in is supposed to be the hard part.
    • fiber is dirt cheap. it costs approx $100.00 for every fusion splice to be made (that is what we pay the contractor.. $100.00 per splice) and it costs $6500.00 to light up 1 (that's ONE) 50km fiber to a paltry 100mbps Full duplex. Bringing up a 1000mbps linx is 5 times that price and bringing up a multiplexed 5000 mbps (that's 5 of the above multiplexed over that one single fiber over a tiny 50 km distance) costs $100,000.00 in all supporting equipment. I know as I just lit one up (I didnt pay for the fusion splicing... I did them myself! Dang cool machine to play with!) We had ran a 16 fiber run laid using directional boring equipment on utility right of way. The cost of the equipment to light it up was at least 20 times the price of the fiber,and the cost of shoving it into the ground and the 256 splices made (I did them so that cost was gone... except for the $50,000.00 for the fusion splicer but that's a long term investment.)

      It makes you sick holding onto a piece of equipment that is no larger than a paperback book and has less than a handful of electronics on it and knowing that you were bent over and made to bark like a dog for the fiber module company to a tune of $3500.00 each for the cheap stuff.. (single mode is the way to go, cheaper and you can get decent distances with it compared to multimode.) Now if you are a large telco or company that has to overpay your "fiber technical engineers" to do what I did last week, you'd spend another $15K in salaries...

      Oh BTW, if you install 16 fibers... you light up 8 of them MAX... you never just start using your spares, that's a big no-no.
    • That's about right. (Score:5, Informative)

      by Ungrounded Lightning (62228) on Thursday March 21, 2002 @11:40PM (#3205406) Journal
      For every $1 spent to put a fiber in the ground, (Score:1) a company has to spend $20 to attach it to all the equipment, configure it and turn it on.

      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.
      • 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.

        Unless you are using fibre designed to be buried direct, you'd typically install ductwork (100mm plastic pipe). Once you have a trench open it dosn't make much odds if you put 1 or 6 sets of duct in. The expensive side is negotiating with landowners, the construction equiptment and paying the people. Fibre is then put through this. Putting a cable in a duct costs money, but a lot less money than digging a trench.
    • ATM/Sonet/SDH switching equipment is damned expensive. Fully decked out switches can easily cost $250,000 - $1,000,000+ depending on port density and speed (OC3 - OC192).

      You also have to deal with what TYPE of fiber is in the ground already. Older stuff can't support the big DWDM equipment. Zero-dispersion fiber was popular until we cranked up the speeds and found that certain problems occurring about OC-48 result in exponential loss (no data making it thru). Newer fiber is dispersion-shifted, with erbium or another rare-earth doping.

      This is why ATM never caught on in the LAN, even with cheap OC-3 cards -- switches cost a friggin' fortune!
    • Right, here's a tip that goes right along with what you're looking for.
      If you look at global stock indices for cable companies, companies that sell the actual cable, you'll find that some of them have gone nuts in the last year. Why? Becuase you're absolutely right that it's bullshit that it costs a lot to light dark fiber. The 10GbE standard is already settled and preliminary switches were available already last year at about US$10000 per port for an 8 port configuration. Hint --10GbE switches connect directly to dark fiber. Correct me if I'm wrong, please, and give lots of details if you don't mind.
      But supposing I'm right, can you imagine why certain wholesale fiber companies might have taken on massive capitalization last year in places like Asia and Northern Europe? Could it be that they've added data services to their product line by adding a few switches so some of that fiber they had laying aroud? We have to ask these questions, don't we?
  • I doubt it (Score:2, Insightful)

    by digitalcowboy (142658)
    I'm no expert on the Telecom industry, but I've been hearing and reading these same predictions for 6 or 7 years now. Over that entire period, there was always some "telecom guru" or another predicting an imminent bandwidth shortage. None of them ever happened.

    The beauty of capitalism is that where there is a demand, someone will create a supply because there's money to be made. In this case, more so because there is already so much unlit fiber there. SOMEONE will find a way to acquire it and get it lit if there is that much demand.

    OTOH, the anticompetitive nature of the large Telcos concerns me somewhat. I wonder If I would have some sort of broadband access available to my rural home if SBC wasn't making so much money by making sure ISDN is my only option?
  • Were those who expected the fiber optics to last so long not anticipating Napster and widespread piracy? To me it seems that those illegal activites have contributed greatly to the growth of Internet traffic.
  • by MonkeyBot (545313) on Thursday March 21, 2002 @09:19PM (#3204814)
    I have lived in three neighborhoods in Texas during the past 4 years, and during all but the past years, everytime I went on a drive, I could see construction trucks with spools of thick fiber lines being buried underground.
    However, this all stopped about 4 months before I got layed off from Alcatel, one of the largest suppliers of fiber-optic cable in the world. There's just not as much business as there used to be, and people aren't willing to speculate on putting fiber down when they won't immediately see profits from it in this kind of market.
    I don't, however, think we are going to see a shortage of bandwidth anytime soon...at least in big cities and suburban America (judging from the state of things in Texas). There's more cable underground than I care to think about, and I know for a fact you can get more bandwidth up and running in less than 9 months--the timespan that this article suggests. If there's a big enough market for it, telcos will have it in tomorrow! We threw up huge testbeds at Alcatel in under a month that could easily have served a small city a good amount more bandwidth.
    Basically, this article is a bunch of speculative horseshit supported by quotes from people that either don't know what they are talking about, or have alterior motives for giving the quotes.
  • by JonWan (456212)
    My local telco [caprock-spur.com] is laying fiber as fast as they can. Most of the towns they serve are connected by fiber or microwave. They have up-graded their connection to the internet backbone to a OC-3 to up the bandwidth asorbed by the new DSL customers. Since the telco is a cooperative and I am a "stock holder" because I have phone service I get a rebate check every year. I guess smaller is sometimes better.
    • You are fortunate to have Caprock as your local telco, because you're almost certainly not paying for it! Rural telcos are subsidized by urban ones, in the name of "universal service". Not that I begrudge them, but you have to recognize the rules.

      Caprock has something like 5000 lines total, spread across several counties, with a density of around one line per square mile! That's expensive! Do you really think 5000 subscribers could finance that whole thing without federal help? Since the money is made available, the rural telcos spend it and often provide good service. Not all do -- as rural telco cooperatives, they're basically exempt from competition, so if the "owners" don't like what they get, they can't turn elsewhere. But then unhappy subscribers can theoretically vote out management, something Bell's victims can't do.
  • by NuttyBee (90438) on Thursday March 21, 2002 @09:20PM (#3204819)
    1. DWDM -- OC768 is coming your way and a lot of badly beat down telecom providers want to sell it.. BAD. Think they'll give ya a discount if yo buy a bunch of units?

    2. Theres so much fiber in the ground on long haul routes that if there is ever anything resembling a shortage in my lifetime, I'd be impressed.

    3. It's not nearly as expensive as the article poses to setup electronics on fiber. It's not $1 to install a fiber and $20 to put electronics on it. It just doesn't work like that.. Dug up the street lately? It costs a fortune.. Attaching the fiber to the Gigabit Ethernet port is far less.

    4. Greed -- If there is money to be made, the bandwidth will be created.. It's called the law of supply and demand..
    • Laying cable is not nearly as difficult as it may seem. I was actually recently chatting with my uncle, who is the civil works administrator for a large wired city, and digging up pavement is a legacy of the past.


      There are so many redundant tubes under our roads right now that nearly any expansion that needs to be done can be fed through them. In our city, natural gas was put in by running new tubes through old waste-water mains. I'm sure fibre will be easier still to lay down.


      And never underestimate the value of real wire connections. With heavy usage, the airwaves are becomming increasingly cluttered, and when people start demanding quality and consistent connections (like when appliances start acting as servers as a matter of fact), people might not be so accepting of internet service that cuts out when you use the can opener.

      • Laying cable is not nearly as difficult as it may seem. I was actually recently chatting with my uncle, who is the civil works administrator for a large wired city, and digging up pavement is a legacy of the past.

        Actually digging a trench is expensive, especially if it is a paved surface even more especially if you need to divert traffic. Usually when people dig new trenchs now they will install at least twice as much ductwork as they think they might need.

        There are so many redundant tubes under our roads right now that nearly any expansion that needs to be done can be fed through them. In our city, natural gas was put in by running new tubes through old waste-water mains. I'm sure fibre will be easier still to lay down.

        Never heard the phrase "waste-water mains". Typically these are called "drains" or "sewers"... Interestingly it is still important that ducting carrying fibre is gas tight. More from the POV of gas leaking in than leaking out though.
    • by bbk (33798) on Thursday March 21, 2002 @10:18PM (#3205062) Homepage
      I've been involved with a WAN project, based on in ground fiber. At the time, people started with Cisco based fiber routers, because of networkability - these cost $30k on both ends for a T3 line worth of bandwidth. I personally think it was a horrible idea and would far prefer 100Base-FX on both ends - 1/20th the price (I estimate), and greater functionality for our situation, which is mainly data traffic.

      Phone companies simply can't use ethernet - it doesn't have QOS, or guaranteed packet delivery times, dedicated channels, etc... These are what telcoms want/need, and the technology that does it costs a ton. For your joe blow data network, ethenet makes sense - telcom is a different issue entirely.

      BBK
    • 1. Getting OC-192 to work reliably is a bitch. Over that, it is a black art. Nortel recently pushed back their 40 Gb unit, and Lucent is the only one really shipping one to customers. It is NOT cheap 6-figures+

      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.
      • Streets are dug up every day to install water pipes, sewers, etc. Laying fiber is dirt cheap compared to the backend switching equipment.

        Not quite, digging up the street is very expensive. But the marginal cost of putting some extra services into an already dug trench is low.
  • by CowbertPrime (206514) <sirmoo&cowbert,2y,net> on Thursday March 21, 2002 @09:20PM (#3204820) Homepage
    "Why? Greed, of and by the (surprise, surprise) large telcos."

    What does this have to do with the shortage of services? Commodity prices are determined by the market. Aptly put by the article, fiber is like farmer's seed. Farmers are actually subsidized by the government to not grow certain crops, because it make it harder to make money when *everyone* is growing the same thing. When it costs 20 times to actually use dark fiber compared to just laying it down, this makes it hard to make money running a fiber service. The big telcos can afford to always undersell the startup. Such is the nature of the market. And don't spew any of that "there's no competition" crap, look at how many telcos there are. If that number is more than 1, you have competition.

    When prices do rise due to "shortage" then as the article predicts, those who raise prices because they do not want to use more fiber will be undersold by new companies that will find it suddenly profitable to provide comms services. The article is basically predicting that the 20:1 cost ratio of use vs. creation will decrease.
    • "...look at how many telcos there are."

      Depends on how you define telco, I guess. If I want a landline at my house there is only one company I can get it from, and I expect it's that way for the majority.

    • Regional monopoly.

      Yes there are several telcos in the US, but usualy only one services a given area, meaning they effectivly have all the power of a monopoly. That "there's no competition" crap is not crap at all, it's a very real issue.
  • by Ars-Fartsica (166957) on Thursday March 21, 2002 @09:20PM (#3204821)
    This article completely discounts the obvious innovations coming to market for pushing more bits down the same fibers over time.

    I also dispute the notion of an approaching shortage. Of course James Crowe wants you to believe that there is an impending shortage - his company is on the ropes and he desperately needs to foster the notion of the bandwidth boogeyman to keep investors interested in his moribund stock.

    Yes if the "last mile" problem is solved, there will be a tremendous spike in demand...but lets be realistic about developments in the last mile - many telcos are scaling back or cancelling outright plans to push high bandwidth deeper into their networks. Case in point, SBC's "Project Pronto", which would have given 80% of SBC customers the equivalent of a 5-7MB/sec connection, has been cancelled for good. If SBC has to provide cut-rate access to their networks to companies like Covad, they simply aren't going to bother with upgrades...and forget about the government forcing companies like SBC to sell off the local loops, this isn't Cuba...hell will freeze over first.

    The sad fact is that the regional Bells are only going to make major upgrades when they no longer have to subsidize the competition. It sucks, but its the inevitable fact.
    • Dont agree (Score:3, Informative)

      Nobody is forced to subsidize anyone, they are just forced to resell at fair prices. It is amazing how much people bash this mild antimonopoly provision.

      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)

        by Ars-Fartsica (166957)
        Nobody is forced to subsidize anyone, they are just forced to resell at fair prices. It is amazing how much people bash this mild antimonopoly provision.

        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).

        • Re:Dont agree (Score:3, Informative)

          by isdnip (49656)
          > SBC is required to offer carrier service to Covad at an externally determined price level. If that isn't a subsidy, what is??

          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.
    • The last mile problem is being quickly solved by a combination of adsl, wireless, satellite.

      My favourite is wireless. There's a lot of people think that this is going to be an 'evil steal bandwidth vampire' deal. But I think this is just how the last mile is going to be solved. There's still the problem of how to get packets from town to the rest of the world; you need the ISP/backbone for that; and there will be firewalls you have to log on through which have 'traffic shaping' to stop any one user taking more than they should by loaning it to their friends.

      Still, everyone is bleating about the lack of investment, but organic growth on an 80% annual demand curve could be awesome!
    • This article completely discounts the obvious innovations coming to market for pushing more bits down the same fibers over time.

      You missed the point.

      Innovation means you can put more down the fibers. So that means it's even LONGER until you have to lay more FIBER.

      But when it comes to the BOXES to LIGHT the fiber, it means you have to BUY A NEW BOX - even to upgrade a fiber you ALREADY LIT with LAST YEAR'S BOX (which you won't do until the dark ones are mostly lit).

      He's talking about the lack of capacity in the BOXES. By his numbers (which look right to me) about 5% of the cost is the fiber and the remaining 95% is the boxes and the rest of the infrastructure.
  • It would probably cut down on people sucking continuously on unlimited broadband accounts and get them to talk to their friends/businesspeople/family via regular long distance phone calls.

    And since these calls are billed by the second, it equals more $$$ in the pockets of the telcos and less money spent on 1-800-tech support with joe dumb user.

  • by pvirdone (172171) on Thursday March 21, 2002 @09:24PM (#3204844)
    Stop and think about how much bandwidth costs.

    It's a lot more than routers and fiber. In fact, compared with the costs of upkeep and support, the infrastructure is almost negligible. That's why there's so much infrastructure already built, but so little utilized.

    Why not use it all? Because people are not yet willing to pay for what they get. Standard business practice is to charge the customer 5x the actual cost of a product or a service.

    Broadband service is so desparately trying to compete with the low cost of dialup, that it's not making the margin it needs. Of course it doesn't scale linearly, as a 128kb DSL connection doesn't cost 32x a 4kb dialup, but a 128kb DSL connection for only 2x or 3x the cost of that dialup sure isn't making the DSL provider the same margin as the dialup gives the dialup provider.

    Bandwidth is expensive, we want -- no, we demand 100% uptime, no slowdowns, this, that, etc. Until people are willing to pay the true cost of this service, none of the greedy Telcos are going to make any money out of this, and will have no motivation to build new infrastructure, make new plans available.
    • Broadband service is so desparately trying to compete with the low cost of dialup, that it's not making the margin it needs. Of course it doesn't scale linearly, as a 128kb DSL connection doesn't cost 32x a 4kb dialup, but a 128kb DSL connection for only 2x or 3x the cost of that dialup sure isn't making the DSL provider the same margin as the dialup gives the dialup provider.Shouldn't that be 4KBytes, not 4Kbits? Or is your connection just *really* slow? With that in mind, following your logic, a 128Kbit DSL connection should cost four times as much as a 32Kbit dialup connection, which, it does. Your average local ISP pricing is between $16 and $20. Your average broadband pipe is about $55-$65. That's about a 3.5x pricing difference.
      • ...a 128Kbit DSL connection should cost four times as much as a 32Kbit dialup connection...

        Most $20 dialup services these days are going to be 56k, don't you think? And I can get 256k DSL for $40. Over 4x the bandwidth for double the price. For an extra $10 the take the reins off and I get what I can up to 768k (600k in my case).

        So I pay 2.5x dialup for about 11x the speed. And that's dedicated. Remember that cable modems are pooled bandwidth, and pricing should reflect the difference. The economy of a pooled system would lead me to expect generally lower pricing, or higher peak bandwidth, which seems to be the case.

    • Your damn right I want 100% uptime, low latency, no slowdowns, vpn, static ips, instantaneous customer support. I willingly pay 120 bucks a month to my cable company to get it too. As the Telecommunications Administrator for a company that has 4 dedicated oc3 lines, I know exactly how much bandwidth costs. 120 bucks is really a steal.

      If people (read: university students) would realize this and not get one router and network a string of apartments/townhouses together all for the basic 40 dollar cable- and tele-coms could actually drive costs down and/or provide better services. Leaving Morpheus/Kazaa/grokster/whatever on 24/7 uploading and downloading movies is criminal. Not in the fact that it is piracy. But they drain the resources that I am willing to pay for(and need to have).

      • So are you saying you are more entitled to the bandwidth than other people who pay the same amount simply because you "need to have" it? All users of the same service are paying for the same bandwidth, if they want to use it 24x7 they can. If the ISP has a problem with that, they can institute a capping system, like AT&T Cables 1.5 Mb down and 128 Kb up system. Their system is more than able to handle traffic at that capacity even in a neighborhood in which their service is popular.
        • No that wasn't what I was saying. If I was on the $40 dollar a month plan, then I wouldn't expect vpn access, high bandwidth and consistent latency.

          But the nature of the cable beast is shared access to the Service Provider. And a whole whack of people behind one NAT'ed router (cost of about 80 bucks) paying a grand total of 40 bucks a month shouldn't have an effect on my premium service. And it does in the world of cable internet.

          It is not very easy to crack down on people sharing net connections behind a NAT. And bandwidth / download caps aren't the greastest things for even the $40 a month service. Everyone wants to grab the latest .iso of their favorite flavour of linux. Everyone wants to grab some .mp3s.

          It's habitual, illegal (against the terms of service), and difficult to dectect actions that rile me.

          So the long and the short of it is, and this maybe very well be egocentric, I pay more, ergo I should get more.

          • Funny that. Cable actually has really quite good QOS/COS features if your cable provider is willing to TURN THEM ON. DOCSIS ( www.cablelabs.com ) has had the ability to set the max up/down per customer since version 1.0.

            Additionally it has also had the capacity to set a minimum guaranteed upstream/downstream bandwidth. I've played with cable modems and CMTSes. The QOS works.

            But guess what, your average Cable Operator doesn't use them much. You 'premium service' is likely NOT buying you any higher a max on your bandwidth ( or any minimum guarantee ) even though the technology can provide it.

            So don't whine about the college students, complain to your cable company about refusing to provide the class of service you wish to purchase, even though the existing technology supports it.


          • It's...illegal (against the terms of service)...

            Ummm, last time I checked, breaching TOS or AUP is not a criminal offense. Immoral? Maybe, if they're aware of them. Prosecutable? Decidedly not.

            Now, once it enters the realms of harassment, theft or fraud, THAT is illegal. I work at an ISP, and have gotten several informational lectures as to what laws apply where.

    • Humm, (cough) Bullshit (/cough)

      Telcos dont make the same profit off a DSL with 1.5Mbit/sec as a T1. In fact every Telco offered DSL with 2x to 10x the speed, then after a short time everyone was buying these highspeed DSL connections and not buying any T1's. What do you think happened? The telcos stopped offering t1 class dsl services. The highest speed you can get on DSL is currently 768K UP.

      The problem isnt DSL, the problem is they make WAY too much money on Air^H^H^H Bandwidth. At our local telco, Ive seen ISP's run Cat 5 to other ISP's and sell T1's for 200 bux. And then the ISP turns around and sells it for 1500. Hell, We paid 3500 a month for an MCI T1 a few years ago.

      Bandwidth is cheaper than you think. Just your wants doesnt fit into the thier business model.
      -
      Business is a good game - lots of competition and a minimum of rules. You keep score with money. - Atari founder Nolan Bushnell

  • As Gilder once noted, value migrates to the edge of the network (think broadband beach-head into office/home/mobile) and all that software on the SIM card. If any telco forgos this control, they suddenly enter the wholesale broadband market with low margins and having someone else eat their lunch. They want to provide telephone numbers, white pages, call-waiting, call-blocking, etc ... (all at a nice mark-up) and when (not if) Microsoft rolls out their Smart Phone in force, there's going to be some major tussles (see http://www.economist.com/agenda/displayStory.cfm?S tory_ID=1033763). Given the circumstances, it is probably cheaper for telcos to leave unused fibre in the ground rather than give a potential competitors an opportunity to get a slice of the action. Not good for the average consumer but when did that worry stockholders?

    Despite what happened to Enron, they did have a role in moving staid industries away from regulated energy supply/demand contracts into a much more market-friendly environment. Too bad they could do a proper job (with decent accounting controls) on bandwidth.

    LL
  • Yay, it's Y2K all over again. Hooray for industry forecasters who never have any idea what the fuck they are talking about. There may be an illusional shortage and a good probability of a rate increase but if the road condition of downtown Atlanta is any indication of the industry, new fiber is going to keep ahead of demand. Good score for the telcos, who else feels like buying WCOM stock and praying that this actualy happens?
  • Another year, another "Internet Will Collapse Upon Itself" story. Haven't we been hearing this same story (albeit with players and situations changed) since the first two ARPAnet computers were linked up?

    yawn.

    - A.P.
  • Huh? (Score:2, Insightful)

    by El_Nofx (514455)
    What happend to the 2 strands in the dark for every one that was lit up?

    That was only last year!
    I read that in my CCNA course
    That was a release from Cisco a week before.

    Man, thats alot of pr0n

  • ....then wireless networks will start popping up as tonnes of people buy 802.11 and bluetooth cards! No ISP bills! Will there be a bandwidth shortage? Only if some freebander fires up his RF noise generator...

  • My city has been torn apart lying fiber optic lines all over the place. Bad news for rollerbladers like me.

    When the glut really happens and demands for broadband go up, so will the finances.

    It's worth noting, too, that fiber optic will make this problem disappear. As of this moment - unlike almost every other technology - there is no "next step" after fiber optic. It is a technology available now that there is no percieved successor to and no percieved NEED to have a sucessor - as the amount of data that these cables can handle is considered limitless.

    So don't sweat this. The market will give the telcos, etc the finances when they need it and once the fiber is in, you can count on your grandchildren using it too.

  • We will run out of bandwidth and bandwidth will become expensive, and telcos will make a lot of money....

    Wait I know, I will buy lots of telco stock!!!

    Some telco executive got himself a good piece of fud, but he forgot one thing - all the idiots lost their money during the dot com boom.

  • If you currently have Sprint as your local telco, you needn't worry about bandwidth shortage. Sprint has recently (1 year ago) launched a C2P initiative for their entire local telephone network. They're converting entirely to a packet-switched network. Here is what I know about the project:

    - 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.
    • The article you are referring to is kind of out of date. Yes, Sprint is putting in a C2P network but the broadband part of the equation (ION) is dead.

      Your voice traffic will not be compressed so don't expect too much extra bandwidth. :) As a matter of fact there will be 0 increased bandwidth.

      Guess what 0% is going back to the customer because the 70% savings is in network maintenance costs. They still have to recover
      the $4b.
  • Perhaps the Act wasn't such a good idea after all. It allowed the telcos to become little "microsofts" and stifle competition and therefore innovation.
    • Perhaps the Act wasn't such a good idea after all. It allowed the telcos to become little "microsofts" and stifle competition and therefore innovation.

      No because the 1996 Telecommunication Act stated that the telcos had to open their networks. However this is proof that they are trying to stifle competition between the CLECs and ISP resellers.

      r00tdenied

  • I somehow find it telling that the comments show no moderations of "funny" posts. It seems that a lack of bandwidth is one of the few things that the collective Slashdot has a hard time making cracks about.
  • What the article failed to mention was the current innovations that exist to solve bandwidth problems.

    A few of the problems now:
    1) The internet is a web, but routing is done with huge look-up tables - its not as web-like.
    2) Packet-routing is fairly stupid.

    We could cut down on the bandwidth considerably if we used different applications that didn't require this. In fact, it is quite possible to create an ad-hoc network (a network formed by joining lots of users but with no central hosts) that would behave like the internet does wirelessly given a dense enough population of broadcasters. Of course, we couldn't really use the ethernet protocol - we'd have to use another one, but its not outside of the realm of possibility or even probability.

    Given a dense population, such ad-hoc systems are cheaper, wider bandwidth, more reliable, and more adaptive than the version of the web we get right now. I imagine that when we're ALL online, and we ALL have bandwidth problems, we'll leave the telecos en-masse in favor of the new technologies that exist today.
  • How The Bells Stole America's Digital Future

    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.)
  • Read the same article on an optical trade publication, Light Reading [lightreading.com] at OFS: What Fiber Glut? [lightreading.com].

    More interestingly read the comments of some industry people.

    This is just marketing hype folks!!!
  • I don't think any shortage of bandwidth exists or will exist in the near future. At least on the physical network side. Or at least I won't believe there is a shortage anymore if anyone ever tells me that. I just bought 360 Networks and Global Crossing in the past year and they both tanked!
  • The math doesn't add up. Even if a 20 year projected supply gets consumed in 5 years, and even if you have to start "9-18 months in advance" for establishing new networks, there is still plenty of time in there for companies to beginning hooking things up once it is apparent that we need more bandwidth sooner rather than later.
  • I have several problems with that article. Not the least of which is that it contradicts itself several times. The article claims that the lighting of dormant fibers has come to a standstill, and it also says that it takes 8 to 18 months to get it in the ground (that much is true). Clearly it can be lit very quickly, and yes, it costs money to light it, but if the demand is there, so is the revenue. So where is the problem? Is the problem supposed to be that the telecom companies don't have enough money to light the fiber because investors don't want to put money in Telecoms? Rubbish! If the demand is there, so is the revenue, hence so is the money. That's why they didn't light the fiber in the first place..

    The biggest hurdle in telecoms is getting the fiber in the ground. It is the Right of Way that drives this business, that is why the Utilities and the Railroads are the biggest players in this business.

    I think the comparison of Fiber to a farmers seed is kind of interesting. Well, more amusing that interesting.. Yeah, I guess they both go into the ground, but apart from that, there are no similarities..

    I also dispute the claim that for every $1 they spend to bury the fiber, they spend $20 to light it. It is the burying of the fiber that costs more time and money. I wish I had some hard facts to back that up, but the 20 to 1 ratio has got to be nonsense..

  • by seanadams.com (463190) on Friday March 22, 2002 @07:40AM (#3206477) Homepage
    Never sign a contract for more than one year on a leased line, or 6 months for colo.

    I ran an ISP for about three years, until around mid '99. It's not my main business any more, but I still have a couple of hosting clients for high bandwidth sites. the ISP business is TOUGH. The competition is insane, so the approach most ISPs take these days is to advertise really high prices while offering competitive rates only to those who haggle and know how to shop around.

    Here's what I've been spending, year by year on Internet service. I've switched providers several times over the years due to changing needs wrt colo vs leased line, and varying costs. I've now been with Hurricane Electric for over a year. They are outstandanding, but you'll have to haggle to get a good price.

    1997-1998 - 3 bonded centrex ISDN lines from Brainstorm [brainstorn.net], 384Kbps: $750/mo
    1999 - shelf and 1Mbps at Above.net [above.net] plus a ptp T1: $2000 + $450/mo
    2000 - shelf and 1.5 Mbps at maxim.net [maxim.net]: $700/mo
    2001 - ptp t1 to Hurricane [hurricane.net]: $650 ISP, $350 XO [xo.com] for the line
    2002 - shelf at Hurricane and 2MBPS: $650. PTP T1 to my shelf: $350

    As you can see, over the years the cost of connectivity has fallen from $1822/mbps to about $500. That's not just per MBPS, I'm talking about a complete package - remote connectivity for 1-2MBPS upstream.

    The cost of installing fiber is still outrageous, but the fluctuations in demand have resulted in a surplus of strands in the ground. I've coordinated fiber installations before - trust me it's a BIG deal. Trenching, conduit, permits, dealing with the city and the fscking retarded telcos. It's no fun, it's EXPENSIVE, and it can take upwards of three months just to get 100 yards of fiber in the ground. But now that the fiber is there, ISPs and telcos can start using it as soon as there's demand, just by connecting the needed equipment.

    Also don't forget that the same strands can usually be used for OC3, OC12, GigE, etc. So it's not just that there are unused strands in the ground, there is also a ton of equipment that can be upgraded to increase the capacity of the strands we're using.

    Bandwidth costs still have a long way to fall!
  • "It's not like you can put this stuff in in a minute," says James Crowe, CEO of Level 3 Communications. "If you want it nine to 18 months from now, you need to start today."

    With wisdom like this gem, is it any wonder why companies like Level 3 are in the bankrupcy conga line?

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