Optical fiber networks are the key to new business network services such as voice over IP and IP video, but a new report says the last-mile connections to businesses are still spotty.
"Scarcity of fiber is one [factor]... challenging the growth of native business Ethernet services," said Rosemary Cochran, analyst at Vertical Systems Group in Westwood, Mass.
There are millions of fiber route miles installed for backbone carrier transport, but the last mile connections to business customer sites are "spottily available," Cochran said.
The problem hits small and medium businesses the most. About twice as many large enterprise business sites are fiber-connected as compared to buildings for small and medium businesses, she added.
"There are hundreds of thousands of small- and medium-sized buildings in the U.S. without access to fiber, which includes remote sites for large nationwide or global enterprises," Cochran said.
Still, she said service providers are trying to find ways to fill the gaps, by forming partnerships with other providers or by using alternatives to fiber, such as copper cable that is engineered to handle higher density data as compared with traditional copper technology.
Big cities have the most fiber to the building, just because of the higher density of the urban landscape, so the scarcity problem is greater in suburban areas where many businesses want to locate, Cochran said.
Vertical Systems said that for 2006, business fiber access to network services reached 13.4 percent of U.S. buildings with 20 or more employees. That's an increase over 11.7 percent in 2005 and 10.2 percent in 2003, the first year Vertical Systems started its analysis.
All the major carriers provide Ethernet connectivity, and more than 90 percent of those services are delivered using fiber with port rates of 10Mbit/sec. through 1Gbit/sec., Cochran explained. Vertical Systems said AT&T Inc. led in retail business Ethernet services last year, followed by Verizon Business, Time Warner Telecom, Qwest, Cogent, Yipes and Level 3. Greater customer demand in the last half of 2006 created more competitive pressure on all the carriers, the research firm said.
The shortage of fiber in many places "is a real problem," since fiber is needed to enable VOIP, IP VPNs and IP video, which often require Gigabit Ethernet speeds, Cochran said. At a minimum, 10Mbit/sec. may be needed, while a more typically available copper T1 connection would only provide 1.54 Mbit/sec. T1's can be bundled together, but fiber offers "a lot more flexibility," Cochran noted.
A single fiber connection at 10Mbit/sec. can run less than US$2,000 per month, she said.
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