With plummeting stock prices and constricted high-tech capital markets, the telecommunications industry is in the midst of a serious economic downturn. Analysts predict that telecom capital spending by competitive local exchange carriers – those new entrants into the telecommunications market spawned by the Telecommunications Act of 1996 – will decrease on a large scale in the next three years. Bankruptcies, downsizing and cutbacks in telecom infrastructure deployment are now commonplace throughout the industry.
The continued deployment of fiber optics, currently the most advanced transmission medium in terms of capacity, data security and cost compared to other broadband technologies, is seriously challenged by the economic downturn. Although many analysts warn of the overcapacity of the newly constructed fiber infrastructure, most of the existing fiber backbone lies unlit and unused as carriers seek to connect thousands of miles of backbone fiber networks to the “last mile” – the final segments of the network that bridge the backbone to the end-user.