Building a Workaround

By eweek  |  Posted 2001-06-04 Print this article Print

Building a Workaround

Fixed wireless answers the call for a "last-mile" delivery system to the customers home or business. But others are building their own bottleneck bypasses. One company still drawing money from the venture capitalists is Yipes Communications, a San Francisco upstart dusting off a 25-year-old technology that could run rings around the regional Bells.

By using unlit "dark fiber" — an abundant resource in 20 metro markets — Yipes delivers Ethernet at gigabit-per-second speeds to business customers that need bandwidth in sporadic blocks. At 1 gigabit per second, the Ethernet connection is nearly 700 times faster than the more expensive T1 (1.5-megabit-per-second) lines frequently used for heavy data transfers.

Yipes "has taken a simple architecture, employed conservative design principles and built a service in very rapid, cookie-cutter fashion," writes J. Pultz, an analyst at Gartner. "This is not in any way demeaning. We believe it is the only rational way to achieve such a large-scale rollout quickly and successfully."

The growth in metropolitan networks is expected to prove a boon for optical suppliers. Infonetics Research predicts that spending on network equipment will grow from $6.3 billion in 2000 to $17.2 billion by 2003, an increase of 175 percent.

Even the traditional carriers are attacking their own T1 lines with cheaper links for voice, video and data over the Internet. AT&T, in the midst of a breakup, is developing its Internet offering for companies that demand more services at a lower cost. At the same time, its broadband division is packing new services onto its newly upgraded digital cable.

For the long-distance division, the Internet ventures represent a continuous decline in revenue. Like AT&T, Sprint and WorldCom are developing their own strategies for coping with the loss of their former core business.

And to hear NxGens Kim tell it, the household names of telecom will soon disappear, casualties of the 1996 Telecommunications Act that was designed to foster local competition. "I would have predicted six years ago that at least one of those legacy long-distance carriers would survive that transition," Kim says. "I no longer believe that any of the legacy long-distance carriers are going to make it. All of them will be bought."

While its small consolation to the current generation, Kim foresees a second wave of competition in the future. The analogy to early makers of home computers is instructive, he says. The Commodores and Amigas that introduced families to glorified word processing and games are nothing more than museum pieces today.

"Every single one — 100 percent of the companies that were founders of the PC industry — are no longer with us," Kim says. "The entire first generation, the guys with arrows in their backs — they all died."


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