5:30 PM -- The argument against another crash goes like this: Last time was driven by oversupply -- which doesn't exist this time -- and demand is continuing to rise. Both are true.

But I get uncomfortable whenever people start talking about the "inevitable." I wonder if rising demand really equates to inevitable network buildouts. It's possible to simply have an inadequate network, something many people accept from their cellular providers already.

That's why I'm predicting next year will be a bust for telecom equipment. Welcome to the next crash.

This is just a personal, gut-feel analysis, but here goes. Yes, demand will continue to rise, since the consumer's incremental expense of using heavier services is pretty much zero. (Consider Hulu LLC or the first wave of YouTube Inc. versus plain Web surfing, for instance.) But I'm guessing networks won't advance in kind, because publicly held carriers will put the squeeze on any non-emergency build-outs.

It's not disaster for the networks, but it adds up to a bad year for equipment vendors, because as this downturn worsens, any carrier spending will increasingly be deemed an extravagance. We all know the pattern: Shareholders driven by the short term are going to pressure publicly held companies into cutting staff, postponing the future just to save face on quarterly earnings.

Maybe I'm wrong. Plenty of privately held carriers exist, some of them quite large. Using the reasoning above, they might even see this as a chance to get the jump on competitors; some equipment vendors certainly claim to be finding gold there. (See Calix: Still No IPO.)

And maybe certain market segments could flourish. I could see access networks continuing to get built out, for instance, while the metro network is left to lag behind. It's not the best way to build a network, but it's what you do when money is tight.

The argument might not be airtight, but I'm still calling it: Next year is going to be awful. Growth at telecom equipment firms will slow drastically; some companies will have to settle for standing pat. And the root cause will be that the growth in bandwidth demand was not enough to force a wave of network upgrades.

— Craig Matsumoto, West Coast Editor, Light Reading