LOS ANGELES -- OFC 2004 -- New fiber? New deployments? Yes, manufacturers of optical fiber here say they believe the three-year slump in the optical fiber market may be beginning to thaw, and they even have some new product to show for it.

OFS was touting a new deal to supply MCI (Nasdaq: WCOEQ, MCWEQ) with its new TrueWave REACH fiber on a 1,500km long-haul link in California, saying it was the first purchase of the fiber manufacturer’s medium dispersion fiber. Medium dispersion fiber is designed for longer distances and can carry wavelengths in two bands, both the C-band and the L-band (see OFS Wins MCI Fiber Deal).

John Fee, a fellow with MCI, says the new fiber will enable savings on operational costs as well as providing more upgrade capacity.

“This ultra-long-haul link is being deployed because it’s much more automated, you can turn up wavelengths a lot faster, and medium dispersion will allow us to move to 40 Gbit/s,” says Fee.

Meanwhile, optical cable manufacturer Corning Inc. (NYSE: GLW) was attacking the other end of the sector -- fiber-to-the-premises (FTTP). Corning announced its NexCor fiber, which is specifically designed for access networks. The NexCor fiber can handle higher-power optical sigals that may be needed by service providers to transmit triple-play voice, video, and data services in fiber access networks (see Corning, Optical Solutions Team on Fiber).

So is a full-blown fiber revival underway? Far from it. The market for optical appears to have stabilized, but prospects for growth -- either in long-haul networks or access networks -- are not yet clear.

Data from the CRU Group shows that, while the optical fiber market stopped shrinking in the second half of 2003, it’s still stalled out with flat growth prospects. Total worldwide optical fiber sales in terms of kilometers deployed dropped 3.4 percent from 2002 to 2003.

OFS officials are low-key about the MCI deployment, saying they don’t see it as a harbinger of another long-haul fiber upgrade cycle. “I don’t see a whole lot of long-haul upgrades happening for a few years,” says Paul Neuhart, president and COO of OFS. But he says there's enough business to keep the market viable. "Long-haul is not dead."

Corning officials, meanwhile, appear excited about the prospects for the fiber market in connection with incumbent FTTP deployments.

”FTTP is one of the biggest opportunities we see,” says Barry Linchuck, Corning's director of global product line management for optical fiber. He says Verizon Communications Inc.'s (NYSE: VZ) deployment of FTTP alone could result in fiber connections of 1 million homes in 2004, which could translate into 1 million km of new fiber. (Linchuck says FTTP deployments generally equate to 1 km of fiber per home passed.)MCI’s Fee says that, unlike in the 1990s when massive fiber networks were built on speculation, most new fiber builds are being based on business-case analyses. “I think that’s how it will be from now on,” he says.

Fee also notes that the prices of fiber and optical components are still coming down, making it an economical solution, especially in places like the access network: “Fiber and copper are almost at parity."

— R. Scott Raynovich, US Editor, Light Reading