editorialPlenty to go aroundA recent trip to Newport, RI, for KMI Corp.'s 22nd Annual Newport Conference on Fiberoptics Markets revealed good news for carriers looking for fiber-optic network capacity. (Fiber Exchange's parent company, PennWell Corp., also owns KMI.) Prognostications indicate that there should be plenty of fiber to go around for the foreseeable future.New fiber installations worldwide will grow to 62.8 million fiber-km this year, according to Richard Mack, KMI's general manager. Long-distance carriers will lead the way, accounting for 27.5 million fiber-km of this total. Feeder and local deployments represent the next largest segment, with 20.3 million fiber-km. This application area will become the largest worldwide consumer of fiber-optic cabling by 2001, which means competitive local-exchange carriers (CLECs) may find available fiber to link their business customers already in the ground. The high total also implies that several of these carriers will choose to build their own networks, rather than lease capacity. A pair of presentations highlighted how these trends are now unfolding in the United States. KMI's Geoff Wilbur reported that U.S. CLECs will deploy 1.8 million fiber-km this year, a total that will increase to 2.8 million fiber-km in 2003. Meanwhile, the market research firm's Neil Dunay reviewed the activities of 39 long-distance carriers and found that as a group, these companies planned 80,000 fiber-km in new builds this year. New national carriers accounted for 29% of this total, just trailing the 30% figure of the incumbents. Utilities—the subject of this issue's cover story—will account for 16% of that total, underscoring their increasing importance in this market. Dunay predicts the incumbents will embark on ambitious overbuild plans beginning next year, which should boost new fiber deployment to more than 9.5 million fiber-km in 2000. In fact, overbuilds will prove the driving factor in fiber deployments over the next two years, accounting for 27% of next year's total and nearly 50% of the fiber deployed in North American long-haul networks in 2001. These overbuilds will help the incumbents catch up with the emerging carriers as far as available bandwidth is concerned. Citing statistics from the Federal Communications Commission, Dunay says Sprint has lit 85% of its fiber, while AT&T has lit 50%. This compares to such figures as 1% for Williams and 8% for Frontier, now part of Global Crossing. The overbuilds should make long-distance dark fiber more plentiful. Dunay reports that 18% of the route-kilometers added to North American long-distance networks in 1999 will come from dark-fiber indefeasible right of use (IRU) agreements. From 1998 through the middle of this year, the average IRU transaction was worth $75 million, which according to Dunay, translates to $30,000 per route-mile with an average count of 10 fibers. That means the average cost of a fiber pair was $6000 per route-mile. Overall, it looks like capacity will be readily available for the next few years, making the build or buy decision a continuing question for carriers. Stephen Hardy Editorial Director & Associate Publisher |