Build-out costs limit fiber expansion, UTC reports

Sept. 5, 2007
SEPTEMBER 5, 2007 — Utility investment in fiber revolves around "capital deepening," rather than network expansion, despite widespread fiber-optic use, finds a Utilities Telecom Council (UTC) report. "The State of Utility Fiber 2007," authored by KEMA, Inc., for the UTC, surmises that utilities expand fiber networks when cost-sharing opportunities arise with customers or partners.

SEPTEMBER 5, 2007 — Utility investment in fiber revolves around "capital deepening," rather than network expansion, despite widespread fiber-optic use, finds a Utilities Telecom Council (UTC) report. "The State of Utility Fiber 2007," authored by KEMA, Inc., for the UTC, surmises that utilities expand fiber networks when cost-sharing opportunities arise with customers or partners.

The majority of utility investments in fiber go to increased Gigabit Ethernet capability, or dense wave division multiplexing (DWDM) on congested routes. Network capacity and diversity take more prominence than network expansion, the report finds. Utilities will, however, invest in fiber expansion with partners, distributing the cost of build-out, or when customers can absorb excess fiber and share implementation costs. Fiber routes and capacity can be expanded through "tradeoff agreements," wherein a utility might barter fiber for right-of-way, or another method would offset the costs of straightforward expansion.

Despite this reluctance to build more infrastructure, fiber is critical to telecom plans at utilities, says William R. Moroney, president and CEO, UTC. The UTC report analyzes fiber technology evolution and broad market trends. Successful fiber management involves adapting to fiber's changing role, Moroney says. "The State of Utility Fiber 2007" covers fiber networks and next-generation infrastructures; fiber communications for municipal entities; the role of fiber for network convergence or supplies backhaul for other technologies; fiber's role in broadband over power line (BPL), WiMAX, and 4G wireless networks; and potential in automated metering initiatives, utility of the future, or smart grid programs.

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