> || Since last October's self-confessed freak-out when the WSJ's
> || figures on the
> || minuscule fibre-optic lighting rate brought home to the
> || Charlies on the FOMC
> || that what we'd been hammering away at for a year - namely that
> || this was a
> || monstrous malinvestment Bubble, not a New Era
>
> Excuse my dimness, what does fibre-optic lighting have to with the tech
> bubble?
/Lit fiber/ and /dark fiber/ are industry terms for optical fiber transmission bundles which are in use and not in use respectively. The unlit fiber represents excess capacity which can be quickly put to use, /lit/, if it can be sold.
I think you get the drift from that.
Here's more if you have the time...
There is general agreement that there is a lot of unused transmission capacity, and controversy over how much and what the market clearing price is, if any. Meanwhile, advances in transmission technology are *increasing* the transmission capability of the existing fiber, reducing the value of unlit fiber.
Somebody recently said that "information may want to be free, but optical fiber costs $1 million/mile," because building and burying the cable is very expensive. Thus it pays to install future capacity (dark fiber) in each cable buried. With the financing of public capital markets, Global Crossing, Level3, Qwest, et al. ordered cable and equipment from Corning, Lucent, JDS Uniphase, et al. to build networks after the Telecom Act of 1996. Investors and operators evidently believed a 1996 report that internet data traffic was doubling every six months and would continue to do so. Now in 2002, with the low utilization rates and falling prices, these companies are not on course for profitability any time soon.
In 1992, George Gilder wrote in Forbes ASAP that about 50% of the US' installed optical fiber was dark. He used that to declare, that just as the price of computing had fallen, so would the price of digital transmission fall even faster. Since that time, the utilization rates and therefore prices, have only gone down, proving him right on that score.
At the end of the summer, he wrote a WSJ editorial, where he explained that the failure of the telecosm, his word for the fiber optic buildout, was the failure to provide enough consumers with the ability to connect adequately to the high speed network.
The WSJ also reported in August that a Merrill Lynch analyst calculated the utilization rate of *lit* fiber in the US to be between 3% and 15% in 2001.
Chris