The Telecommunications Industry Lives

by | Apr 2, 2001

Every time I hear somebody deliver a eulogy for the telecommunications industry, I think of a wonderful analogy that makes me feel better. The argument that the telecommunications industry is dead goes something like this: There is enough capacity in long haul fiber optic networks to satisfy demand for several years, even if demand continues […]

Every time I hear somebody deliver a eulogy for the telecommunications industry, I think of a wonderful analogy that makes me feel better. The argument that the telecommunications industry is dead goes something like this: There is enough capacity in long haul fiber optic networks to satisfy demand for several years, even if demand continues to grow at current rates. The infrastructure has been over built — Cisco, JDSU, Juniper, and all of the other networkers should shut their doors and put their factories up for sale. With apologies to Crowded House, “Hey now, hey now, the boom is over.”

Kind of reminds me of the time I went to buy a personal computer and I asked the salesperson if he had any PC’s with Intel’s new 486 66mhz chip. He didn’t have it yet, and he went on to assure me that nobody would ever need that kind of horsepower on the desktop.

But that’s not the analogy I’m shooting for here, folks. I have a much better one.

Let’s assume for a minute that we have enough long haul capacity to satisfy demand for the next 50 years — hell, the next century. I don’t care. It just doesn’t matter, because the chain is only as strong as its weakest link.

Consider, by way of analogy, our highway system. Let’s assume for the sake of argument that every morning during rush hour, cars zip along our superhighways at speeds of 75 mph. (We know that’s not true, but my analogy makes even more sense when you assume that we have over capacity on the long-haul portion of our highway system.) The problem is, it still takes you twenty minutes each morning to travel 2 miles to get to the highway. Why? Because the “last mile” problem applies to all infrastructures, be they tar and cement highways or data highways.

We’ve lived with the last mile problem on our roads forever, and we know it will never go away. It will always take us 20 minutes or longer to travel two miles to get to the superhighway each morning. We put up with it, and we accept it. Therefore, the analogy goes, we will also put up with and accept the last mile problem on our telecommunications highway system.

“Wrong, day-old-bread-breath,” as Johnny Carson used to say to Ed McMahon

We put up and accept the last mile problem on our highways because we only go to work once a day. Yes, the morning drive is a terrible waste of productive time — but at least it only happens once a day.

But if you are one of the millions who work from home, you travel the telecommunications highway thousands of times each day, and the delay imposed by the last mile — the weakest link in the chain — is absolutely, incredibly intolerable.

The last mile problem for our transportation system can go unsolved — will go unsolved, in fact. The last mile problem for our communications system cannot go unsolved, because if it does, all else is for naught. All of the capacity in our long haul networks will have been a terrible waste of capital. Which is why I am beginning to see more articles like the story about the communities of Guthrie Center and Huxley, Iowa, where a CLEC, Guthrie Telecommunications Inc., is laying fiber to the home.

The fiber to the home revolution is just beginning. To disbelieve it would be to believe that we will be content to have our long haul fiber optic networks end in the brick wall imposed by all of the copper in still in the ground. Not gonna happen. Wouldn’t be prudent.

Still don’t believe it? Reflect for a moment on the ever changing definition of broadband. Less than ten years ago, when most of us were cruising AOL on 14.4 modems, a 56K modem would have qualified for a broadband connection had the word “broadband” been in our vocabulary back then. A couple of years later, ISDN redefined the term “broadband”. Cable modems redefined broadband again, and DSL promises to make cable modem obsolete. Does anyone really think that they will be satisfied by DSL, the current incarnation of broadband? If you do, you probably would have believed the guy in the computer store who told me I would never need a 486 66mhz computer.

The productivity gains made possible by business at the speed of light are too incredibly awesome to ignore. This is one infrastructure that will be built.

The views expressed above represent those of the author and do not necessarily represent the views of the editors and publishers of Capitalism Magazine. Capitalism Magazine sometimes publishes articles we disagree with because we think the article provides information, or a contrasting point of view, that may be of value to our readers.

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