Fiber Optic Economics

One of the initial economic factors to consider when converting to fiber optics is the cost of replacing wire systems with fiber. Increased demand for optical fiber has brought the prices down within competitive range of copper. However, since transmitters, converters, optical repeaters and a variety of connecting hardware will be needed, the initial cost of changing over to fiber can be expensive. Increased demand, advances in the technology and competition have brought the prices down somewhat. Short term and long term gains should be considered when updating a communication system. In the short term it is often less expensive to continue using copper cabling for covering expanded communication needs. By simply adding more wire to an existing system, expanded needs can be covered. This avoids the expense of adding the transmitters and receivers needed for integrating optical fiber. Long-term needs, however, may require more expansion in the future.

In the long term it may be more cost effective to invest in conversion to fiber optics. This cost effectiveness is due to the relative ease of upgrading fiber optics to higher speeds and performance. It has already been seen in the industry as communication providers are wiring customers with optical fiber bandwidth that exceeds consumer bandwidth needs. This is in anticipation of future bandwidth needs. It is generally accepted that customers will need increased bandwidth as the information highway grows. Replacing copper with fiber today would avoid continuing investment in a soon to be outdated copper system.

Television and telephone companies hurry to build systems that will convert television and telephone technology and thus provide a one-server system for their customers. Fiber optics will play a pivotal role in this race since the bandwidth needed for providing an all-in-one service with television, telephone, interactive multimedia and Internet access is not available in much of the wiring of America. Competition for customers is a strong factor motivating communication networks to convert their systems over to fiber optics.

Competition is not only between providers of fiber optics networks. Recent developments and proposed plans in the satellite industry may have an effect on the use of fiber optics as a transmission medium. The satellite industry is proposing and building several systems that they say will provide the telecommunication services needed without the need for laying more fiber-lines. Like terrestrial cellular systems, satellites also have an advantage over fiber in that they can provide mobile access to telecommunications services. They can provide a level of global ubiquity that is not possible with fiber optics or with terrestrial cellular. Satellite services could potentially serve rural and undeveloped communities that may never see a fiber optic line come through the part of the world.

None of these satellite systems, however, can provide the bandwidth potential of fiber optics. Fiber optics has the proven ability to deliver more information per second. So, it is no wonder that satellite providers have not announced plans that could effectively provide television, telephone, interactive multimedia and Internet services into an all-in-one service. Evidently, tomorrow is with fiber optics.