Page Three

By Peter Coffee  |  Posted 2004-10-18 Print this article Print

A key question is whether the kind of excess fiber that a carrier installed yesterday will meet enterprise needs tomorrow. On this point, Gunnerson was unhesitatingly confident: "Some studies have shown that the long-term viability of fiber is excellent, with the aging fibers actually getting stronger over time. Fiber itself can last multiple tens of years."

Those in search of cost-effective capacity should keep this in mind, Gunnerson said, because "five- and 10-year fiber leases are quite expensive, with [attractive returns] not arriving until longer, 15-year terms are embraced."

Gunnerson also urged his IT peers to think creatively about what it is that theyre leasing when they sign an agreement to use in-place fiber bandwidth. The lease need not be tied to a specific route if the lessor also has capacity throughout a region where the lessee has possible future interests.

"Changing locations and adding locations are certainly actions that should be contemplated and covered in any dark-fiber lease," Gunnerson said, adding that there should also be clauses that deal with the possibility that a future location might not fall near existing fiber. "Adding buildings not located on or near fiber-optic assets costs a lot of money in fiber construction, [but] there may be other means to include a specific office in a dark-fiber network, such as a point-to-point optical circuit or other bypass technologies," he said.

Click here to find out where to read more about dark fiber. Potential buyers will benefit from having a simple means of identifying installations that might benefit from dark-fiber leasing, said Gunnerson. "The rough rule of thumb weve been using for examining potential savings by using dark fiber, xWDM and carrier hotels is a monthly expense of $7,000 for all voice, data and Internet connections. We see that expense as a rough break-even point for dark fiber," he said.

Gunnerson added that savings are derived "from creating a fixed price for all local-loop fees with the fiber lease, and competitively bidding voice and data services at the carrier hotel."

In other words, the company buys its local bandwidth in bulk. It then ships all its bits—whether they represent data, voice or more exotic forms of content—to a nearby open market, where content-specific service providers can bid for the business of sending them on their way. If these different kinds of traffic are still under different jurisdictions within a company, this may be the impetus thats needed to consolidate those responsibilities for maximum bulk-buy advantage.

Next page: Changing the equation.

Peter Coffee is Director of Platform Research at, where he serves as a liaison with the developer community to define the opportunity and clarify developersÔÇÖ technical requirements on the companyÔÇÖs evolving Apex Platform. Peter previously spent 18 years with eWEEK (formerly PC Week), the national news magazine of enterprise technology practice, where he reviewed software development tools and methods and wrote regular columns on emerging technologies and professional community issues.Before he began writing full-time in 1989, Peter spent eleven years in technical and management positions at Exxon and The Aerospace Corporation, including management of the latter companyÔÇÖs first desktop computing planning team and applied research in applications of artificial intelligence techniques. He holds an engineering degree from MIT and an MBA from Pepperdine University, he has held teaching appointments in computer science, business analytics and information systems management at Pepperdine, UCLA, and Chapman College.

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