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Ethernet services

Businesses Face 'Fiber Gap': Report

Islands of businesses not connected to fiber are the norm rather than the exception, according to a recent report.

The number of businesses in the US connected to fiber networks, the predominant medium for Ethernet, is growing at a healthy clip, increasing to 39.3% of all US businesses with 20 or more employees by the end of last year, according to numbers just released by Vertical Systems Group. That stat is up from 36.1% in 2012, and far from the 10% to 11% numbers the industry was lamenting a decade ago.

If almost 40% of US businesses are connected by fiber, then more than 60% still aren't. They remain in the so-called "Fiber Gap," according to VSG.

That's a pretty big gap. In fact, when the gap is bigger than what isn't in the gap, I don't know if you can still call it a gap -- it's more like the real state of things. If anything, the groupings of actual fiber-connected businesses in this country still look a lot more like islands.

Something else worth noting: The rate of growth in business connections has slowed a bit recently -- it was 31.8% after 2011, so the rate of growth has slid from 4.3% to 3.1% in that span.

Let's not celebrate too much a stat that tells us the number of fiber-connected businesses remains well below 50%. The cable guys have done their part to stoke the market in recent years, but the real sweet spot for many of them continues to be the size of business that is not even considered in this report -- small businesses with fewer than 20 employees. (See TWC Tops Cable List on Carrier Ethernet Leaderboard and Cable's Business Boom.)

The MSOs are increasingly targeting the middle of the market, but even so, they are focusing primarily on the businesses within their own cable TV footprints. That leaves a lot of untapped potential for the national network operators.

When the number of fiber-connected businesses hits 50%, maybe then we can start celebrating -- if being half finished is anyone's idea of an accomplishment.

— Dan O'Shea, Managing Editor, Light Reading

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