Fiber- Optics

Page 24 of this month’s Scientific American begins a Telecom article “Copper for Fiber” by Lamont Wood, wherein he describes the massive deployment of fiber in the ‘90s and the denial of service by phone companies under the Telecommunication Act of 1996. He attributes today’s early offerings of fiber by the phone companies to two factors: First, the 2003 rule change by the FCC eliminating the requirement that phone companies share the fiber-optic lines with their competitors. Second, the cost of deployment to the home has dropped to a cost approximating the cost of laying new copper.

So, now Verizon Communications is delivering all fiber to the home, and SBC is offering fiber-optics in combination with DSL. The former is split into a bandwidth of only 19 megabits and the later is tweeted up to some 25 megabits.

The article continues to mention that some 200 American towns have installed the fiber-optic networks in order to overcome the resistance of the phone companies.

What the article misses, is the lobbying and legislative pressure resulting in the FCCs abandonment of anti trust provisions of the 1996 Telecommunications Act and the money spent by the “Baby Bells” to get those rules changed. Not apparent is the fact that competitors with farsighted goals laid out the abundance of cable, the very availability of which threatened the monopolistic business model of the phone companies. Various mergers, name changes and buyouts resulted in the phone company’s control of the fiber and for a time cable and wireless as well. While they cry poverty, have you seen any drop off in your phone bill? Most of the competition is now history. Bankruptcies of the competition resulted in the loss of critical quantum photonic technology.

Engineered scarcity has always been the business model for the phone companies. Once upon a time, it was a natural scarcity but not in fifty years. 25 megabit is nothing, if not an obscene choking off of the potential and present capacity of available fiber-optic cable.

The limited capacity offered by Verizon, represents an infinitesimal fraction of the natural capacity of fiber, which is in the terabit range and can with code division of the lambda reach into the petabits. There exists an inability and unwillingness on the part of the phone company to change the paradigm. Their control depends upon centralized switching and routing. The fiber-optic network relies upon peripheral routing and switching.

Our technological economy depends upon multiple facets to thrive as it has. One was available venture capital, two was the R&D from the Universities, Three was the rapid growth in computing capacity and the simultaneous drop in computing cost, Moore’s Law. The engineered scarcity and intransigency of the phone companies placed a roadblock in the growth of the Internet economy with devastating effect.

Yet, today the primary goal of the phone companies is to control the net, the access, the supply and the price. These are unbelievably huge corporations with an authoritative pragmatic structure exercising monopolistic market power that overwhelms all resistance and all competition. It is a trillion dollar anti trust crime right under the nose of the media, so well cloaked in Telecomm PR as to fool even the best of investigative reporting. Where is the FTC?