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andiji 12/4/2012 | 10:45:24 PM
re: OFS: What Fiber Glut? The data networks analogy is garbage because there
is no dynamic usage of the current optical networks. The 10x factor is already built into
the current usage ratio.

If you really want to get depressed, you could argue that only 0.64% (e.g. 10% of the her current 6.4%) is "typically" used. Even at 100%/year this is about 3-4 years until more is needed.

This is somewhat relevant because MPLS and friends will allow carriers (someday) to make better use of the network resources _without_ adding fibre and/or lighting more wavelengths, for example only adding more lambdas when needed rather than buying a huge pipe so it's there when you need it.

More likely, in my mind, is that data rates will stop going down as carriers look to start paying debt down and face less competition. This means that they will milk the existing network as much as they can without spending money, except to cut operations costs (e.g. mgmt software).
lu-alum 12/4/2012 | 10:45:20 PM
re: OFS: What Fiber Glut? A company name of Optical Fiber Solutions, while attending a tradeshow called the Optical Fiber Communication Conference says that the widely accepted concept of a fiber optic glut is untrue and demand is growing. I guess we're all set then.

I was going to say something really funny here, but instead I think I'll just savor the moment.
gea 12/4/2012 | 10:45:18 PM
re: OFS: What Fiber Glut? First all of you hype-marchers believe there's "no more fiber" in the ground. Then you believe there's a fiber glut.

Did any of you actually READ that Merril Lynch report? It was actually quite well-balanced and sane. An AVERAGE fiber usage rate of 64% (or whatever it was, I'm not gonna bother clicking back to the artice) doesn't do you any good in Metro and other areas where you've run out. The Merrill report pretty much pointed this out.

But again, some of this misses the point. Long Haul WDM did well not primarily due to fiber exhaust, but simply to save money and operational costs: for every N SONET Regens you replace by N-wavelength WDM, that's money in the bank. Deploying WDM in the Long Haul is a no-brainer, even IF you've got plenty of fiber. And after you've deployed WDM on many routes, all you'll buy after that are transponders.

In the Metro things are different. If you don't need amplification, then the case to deploy WDM is much harder to make. In the Metro, fiber exhaust is he only big driver for deploying WDM. Vendors and VCs all pointed to the fact that "we're running out of fiber" as a way to sell gear and get investment money moving. When Ching and Leopold's Report came out, the same VC's and vendors hid behind it to say: "See! We were all mistaken about how much fiber was in the ground!!!"

But the fact is that fiber is really ruining out in some areas, plentiful in others. My advice? Don't simply jump on the latest hype-wagon: it's already full.
fhussain 12/4/2012 | 10:45:12 PM
re: OFS: What Fiber Glut? I agree, lets just absorb the profundity of this insight.
captain kennedy 12/4/2012 | 10:45:08 PM
re: OFS: What Fiber Glut? Please explain how WDM replaces regens?
freethinker 12/4/2012 | 10:45:07 PM
re: OFS: What Fiber Glut? If this is all about supply and demand (and it is, after all, a market we're talking about), then the typical process would involve oscillations between insufficient supply (with disappointed users paying excessive amounts of cash for woefully inadequate bandwidth) and excess capacity. Over time, the oscillations should dampen and returns to the providers should approach a risk-adjusted sustainable rate.

Those who would deny the existence of a glut need only look at the financial returns of the providers to establish beyond any doubt that there is in fact tremendously excessive supply. This isn't conjecture - it's undeniable reality. End of discussion.

The key questions then become:

1) Is this a cyclical phenomenon?

2) If so, has there been a period when the suppliers actually made an excessive return that justified the substantial increase in investment?

3) How long will it take for the growth of demand to catch up with supply?

Suggested answers (with the immediate acknowledgment that there are no definitive answers to these questions - sometimes, not even with the benefit of hindsight):

1) We have had a giant "up" in investment, followed by the current substantial "down" in investment. In order for it to be cyclical, we need to see this pattern replicated. The investment cycle in most industries is a function of two drivers - changes in technology and changes in the financial environment. The former is unlikely to replicate the magnitude of the innovations of the past several years. The latter is going to take a long time to heal. Draw your own conclusions.

2) Given the dichotomy between legacy providers (whose financial returns on data traffic are impossible to break out, but can be inferred) and the alternative providers (who have mostly flamed out before they made a buck), we need to acknowledge that the only money made so far is by those who have been pulled into modern data networking kicking and screaming and who remain in their technology ruts. Generating billions of dollars of revenue on written-down frame relay/ATM/Sonet equipment has worked to date, but it doesn't really serve as a viable predictor for the next decade.

The irony is that the profitability that can be assumed for the legacy providers served as the catalyst for those who invested in new technology that is so much more efficient that it has overpowered the market. The Bell Labs research piece on the smoothing of traffic across the core didn't call sufficient attention to the financial disruption that it would cause.

3) I guess we'd all love to get this one right. But what's driving me nuts about this is the increasing recognition that technology is going to keep making the supply side of the equation a moving target as well - lower amounts of spending can still have a big effect on supply.

Any thoughts?

gea 12/4/2012 | 10:45:07 PM
re: OFS: What Fiber Glut? This is an economi equation I often don't see about WDM these days. It seems to have been forgotten as folks were licking their lips looking at the oncoming Metro DWDM market.

Anyway, in the old days we had these things called SONET regenerators. They were costly and required approximately every 60km to regenerate a signal. In addition, they had to be forklifted if you wanted to upgrade the bitrate.
Then came the OFA and WDM. This means that 1) you replace regens with amplifiers (a single EDFA was around the same price as a SONET regen). Then, WDM allows you to leverage that OFA, so that you can throw away tons of Regens for every channel you can move over to a WDM system. In other words, let's say you have 16 wavelength WDM with 4 OFAs. That means you could replace somehing like 40 or more Regens with a string of 4 OFAs. A no-brainer in terms of cost, so long-haul carriers installed WDM like crazy. Fiber exhaust was fuel to the fiber in some areas.
tsunami 12/4/2012 | 10:45:05 PM
re: OFS: What Fiber Glut? What difference does it make whether there's a fiber glut or not. The real issue is that carriers are saddled with huge debts of their own making. They spent too much money building speculative networks to support a fictitious growth of the Internet. More importantly than the exact growth rate is that users don't pay for their usage. All other public utilities are paid on a usage basis; phones, electricity, toll roads - the more you use the more you pay. Television is an exception but commercial TV is interrupted every few minutes and you're forced to watch commercials. The Internet has somehow escaped all these inconveniences. But this fantasy business case needs to be changed if carriers are expected to support it. As painful as it will be on society, it seems time to push the Internet into the real marketplace and charge for usage. Then, real applications and businesses can be built on it to support applications users are willing and forced to pay for.
nelsonal 12/4/2012 | 10:45:04 PM
re: OFS: What Fiber Glut? All quite true, but if the internet was pay as you go, which more and more sites are starting to adopt. It would stall the increadible growth that has been the main hallmark of the business.
tsunami 12/4/2012 | 10:45:03 PM
re: OFS: What Fiber Glut? That's my point, the growth of the traffic hasn't been sustained by growth in revenues and therefore you see so many carriers with debt problems that aren't going away. If the the growth slows down due to charging for usage, so be it, at least there's a long term revenue flow to support upgrades to the network as needed.
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