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Bandwidth Shortage And The Telephone Company
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.
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.
-- ;-)
Kuro5hin.org: where the good times never end.
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.
My local telco 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.
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.
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.
Degaussing scares the bad magnetism out of the monitor and fills it with good karma.
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).
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.
Do not look at laser with remaining good eye.
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.
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!
Learning HOW to think is more important than learning WHAT to think.
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.
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...
we are all invisible unless we choose otherwise
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, 384Kbps: $750/mo
1999 - shelf and 1Mbps at Above.net plus a ptp T1: $2000 + $450/mo
2000 - shelf and 1.5 Mbps at maxim.net: $700/mo
2001 - ptp t1 to Hurricane: $650 ISP, $350 XO 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!
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?
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.)
I read the internet for the articles.