February 1, 2005 4:00 AM PST
Dark fiber: Businesses see the light
The automotive giant sells cars, not telecommunications services. But, in a move that experts say increasingly makes sense for bandwidth-intensive business operations, Ford found that it would cost less to lay its own optical fiber lines than to subscribe to a service from the local phone company.
"I think it's a strategy that companies need to look at," said George Surdu, director of infrastructure at Ford. "They need to work through the business case themselves. But I don't believe we are the first ones to think of doing this, and I'm sure we won't be the last."
He's right. Bank of America, Bausch ' Lomb and Gannett Co., the publisher of USA Today and dozens of other newspapers across the country, are some of the big names that have built out their own fiber
Private fiber optic networks aren't just for giants anymore--midsize firms in many industries are saving by leasing unused fiber lines and building their own high-speed optical networks.
Cheap fiber and optical equipment are paving the way for corporate customers to build their own fiber networks instead of subscribing to a service from a local carrier. It's not for everybody, but it's a smart move for more companies than have done it so far.
Analysts say that most companies still find it easier and cheaper to simply rent "lit," activated fiber--and all the networking equipment behind it--from carriers. But falling prices on unlit or dark fiber and newer, cheaper optical equipment mean even many midsize companies can afford to take out long-term leases on dark fiber and buy the equipment to run their own network on it.
The excess of "dark fiber"--fiber-optic cables deployed underground but not put into use--makes it possible. During the 1990s, everyone and his brother laid fiber optic lines. Local phone companies, electric companies, municipalities and water utilities dug up city streets to put fiber in cities and towns. And because they never wanted to dig up the ground again, they jammed the conduits with thousands more strands of fiber than were needed.
When the drunken spending of the dot-com era screeched to a halt in 2000, the telecom industry couldn't find a market for all the fiber it had spent billions of dollars placing.
Oversupply sent prices plummeting. Some industries, such as investment banking, built their own fiber networks even when costs were high because they needed them for stock trading. But the falling fiber prices have made building a fiber network cheap enough even for cost-conscious fields such as education and health care.
"Analysts have long said it's too expensive and requires specially trained optics engineers to build and run these networks," said Gary Gunnerson, IT architect at Gannett, which has already built metro fiber networks in three cities where it has newspapers. "I've found just the opposite to be true. The fiber and the equipment are so cheap now, and anyone who is familiar with IP networking gear can handle a short-distance optical network. I could teach them how in half a day."
Flexing bandwidth muscle
Companies that build their own networks are likely to be technology innovators. Their need to jack up bandwidth is a direct result of ambitious technology initiatives that include converging voice, data, and video onto an Internet protocol backbone, expanding storage area networks or consolidating data centers.
Ford's George Surdu said his company knew it needed a flexible, high-capacity network as it started to move its network toward IP convergence.
"We are definitely saving money by doing it ourselves," he said. "But owning the fiber ourselves also fits in well with our overall telecom strategy. We needed more bandwidth, but we also wanted to be able to
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