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Technology Stocks : LAST MILE TECHNOLOGIES - Let's Discuss Them Here -- Ignore unavailable to you. Want to Upgrade?

To: elmatador who wrote (8425)	9/11/2000 12:07:37 PM
From: justone	Read Replies (1) \| Respond to of 12823

elmatador: An excellent article. I have on occasion thrown a damp towel on enthusiastic discussions of bandwidth growth using traffic models and queuing theory, but with I've had little success at persuading anyone. I simply can not understand, outside of a massive use of point-to-point video, the need for bandwidth by users, even corporate users. I suspect the "fiber glut" is coming quicker than we think. I have better luck with the following argument: 1. In 1998 data was ~8.7% of the total voice and data telecom market. Say today it is %10. 2. I ran some numbers, and discovered that the voice traffic for 100,000,000 US homes using uncompressed voice in theory could all fit on a single DWDM OC-192 with 128 channels. Assuming business traffic is three times voice (a made up assumption) and you can compress 4:1 voice, this means that a single strand of DWDM fiber could carry the total voice traffic of the US, if everyone wanted to call NY from LA, for example. Thus as you add more fiber, carrying voice traffic is essentially cost amortized over fewer and fewer fibers. Essentially, long distance voice is free. And metro may soon be free, as fiber is deployed there. Fiber deployement will soon have to be cost justified out of the 10%, not out of the 100% of revenues. The implications, in my opinion, are that the costs, and revenues, are in local access, local switching and local features. Also, why drop high quality TDM for compressed voice, if there isn't a cost advantage? Also, why drop nicely managed ATM or SONET, if their overheads aren't a cost disadvantage. Bandwidth efficiency is not longer a beneif, and may be a liablility. Thus I would expect to see TDM around for a while, with ATM/FR carrying IP traffic, at least in the backbone, as the 90% voice (used by PSTN and cellular/pcs networks) is happy with this high quality solution. As noted elsewhere on the thread, SONET costs are dropping as improved technology improves fiber utilization. The rollout of fiber for backbone data must be financed by the 10% revenues on broadband services. I expect there is growth in this area because of the usual web demand, and probably for VPNs and video conferencing. Of these, I'm most curious about video conferences for business- I haven't seen any traffic models here, but I don't think virtual meetings are frequent or long enough to generate enough traffic to be more than noise on the voice network (justone opinion! This could change over ten years, I guess). As I see it there are two sources of bottleneck that must be addressed once the core is 'essentially free': 1) the last mile (which is why I'm here) 2) multi-media local servers and jukeboxes "Server" discussions are off topic, but I'm looking at AKAMI when it stops dropping. One question for this thread is when should we sell our core-related holdings as a result of fiber glut. Since some core companies are moving to the last mile (LU, NT, ADC, JDSU, PMCS, etc.) perhaps we are safe keeping them? But what about the network service providers? I guess ATT probably has the right strategy here: get out of core and into local access. justone opinion