I think this was today's Gilder, trying to find out for sure, but would explain some of the carnage today, but only some:
Gilder Pulls LVLT off List
by: eboat12000 11/13/00 11:17 am
Msg: 40563 of 40564
Will Level 3 see the light?
So far, Level 3 says it may think about doing ultra-long-haul on “certain express routes,” meaning high-traffic, east-west links. WorldCom is also contemplating it for express routes. But for the most part Level 3 continues to promote the fiber itself, and the conduits containing it, as the key factors in the unit cost competition. Content for now to leave optoelectronic regenerators in place on most light paths, more than any other carrier Level 3 looks to improvements in the fiber itself for optical fulfillment. Level 3 built twelve conduits nationwide to accommodate new generations of fiber and doesn’t see how any network with fewer than six conduits can be successful. (Can you say “mini-ducts”?) The company is also excited about its plan, early next year, of pulling through its second conduit a new, more perfectly symmetrical generation of Corning LEAF that helps reduce polarization mode dispersion and goes some way toward enabling 40 gigabit per channel transmissions.
One hundred one million of Level 3’s $255 million in third quarter communications revenue was dark fiber sales, leaving $154 million in resale and lit services and co-location. Williams, by comparison, sold $178 million in network services last quarter and may have $100 million in dark fiber sales for the entire year. 360’s Greg Maffei, moreover, readily admits that Level 3 is far ahead of other next generation networks in co-location construction. Level 3 likes to say that for every one dollar spent on fiber, a network must spend nineteen dollars on optics and electronics. Under the pressure of Cao’s Law, however, that ratio is collapsing. As the PowerMux product family wildly proliferates wavelengths and extends their reach, it will accelerate the exit of expensive electronics from the system. The absolute cost of lighting a fiber will continue to drop. And the cost per lambda will drop even faster.
The unit cost of the bit, say the carriers, is the only thing that matters. They are wrong. Connectivity is king. The plummeting price of lambda connectivity will become the supreme force fueling the opportunities of the Net. Bits per second will take care of themselves. Level 3 understood that pricey optical fiber is cheaper than inexpensive copper. But so far, it has failed to grasp the new paradigm. That light is cheaper than fiber.
Perhaps Jim Crowe’s ultimate role will be as a wholesale supplier of dark fiber, conduit, and colocation. Perhaps Level 3 is just a construction company—no more, no less—after all. Long haul network construction and colo real estate leases may be profitable businesses, but they fall short of the Telecosm, and thus we remove them from the list. |
