New report examines fiber's depreciation life in local network

Telecommunications forecasting firm Technology Futures (TFI—Austin, TX) has released a report that examines the economic life of singlemode fiber (SMF) installed by incumbent local exchange carriers (ILECs) in the local exchange network. The depreciation lives of these cables were derived from analysis of demand, technology substitution, physical mortality, and competitive factors.

"When fiber was introduced into the local exchange in the early 1980s, we had little on which to base depreciation lives," explains Ray L. Hodges, senior consultant at TFI and the report's co-author. "We now have experience regarding the physical mortality of fiber as well as experience with singlemode fiber replacing multimode fiber. There are now advanced types of fiber capable of displacing the embedded singlemode as well as competitive issues that must be considered in the depreciation-life estimation."

According to the report, today's embedded standard SMF cables are already obsolete for high-density, long-haul applications and may become so in the local exchange. There is very little fiber in the distribution plant today, say TFI analysts. The timing of placing distribution is late enough that, in all likelihood, it will be advanced fiber. Because the long-haul already uses advanced fiber and newly placed distribution fiber is also likely to be advanced fiber, a bottleneck of the most outdated SMF should develop in the middle of the network.

By 2010, ILECs will provision one-third fewer access lines than today and by 2015 less than half as many, says TFI. Competition will strand large quantities of network equipment, including fiber cables, further reducing economic life. TFI recommends a projection life of 15–20 years for nonmetallic cable.

For more information about the report, "Depreciation Lives of Fiber Optic Cables in the Local Exchange," call 512-258-8898 or visit www.tfi.com.