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164 Chapter 7

competition was introduced, revenues and access lines have grown
40 percent. However, investment in outside plant has increased 60
percent.The 1996 Telecommunications Reform Act gave way to myr-
iad new operators in the long-distance and local exchange markets.
These new providers offered the promise of driving down costs. They
also offered to create demand for additional services and capacity.
Moreover, early competition among long-distance carriers was based
mainly on price reduction. Today’s competitive advantage is built on
maximizing the capacity of the network and enhancing reliability
through aggressive service-level agreements (SLAs).
Bandwidth demand increased as the carriers guaranteed fail-safe
networks. Telecommunications is critical to businesses and individ-
uals today. Carriers agreed to guarantee fault tolerance and immu-
nity from outages. In many cases, telephone companies include
service-level guarantees in their contracts, with severe financial
penalties should outages occur.
To meet these requirements, carriers have broadened route diver-
sity through either redundant rings or 1:1 point-to-point networks.
Backup capacity is provided on alternate fibers. Achieving 100 per-
cent reliability requires that spare capacity be set aside and dedi-
cated only to a backup function. This can effectively double the
bandwidth needed for an already strained and overloaded system
because the “protective” path must equal the capacity of the “work-
ing path.”

New Applications

Concurrently, the carriers are enhancing network survivability and
accommodating escalating demand for services such as video, high-
resolution graphics, and large-volume data processing. Each appli-
cation requires insatiable amounts of bandwidth. Frame Relay and
ATM also add to the demand. Internet usage, which is growing by
100 percent annually, is threatening to overwhelm access networks.
Over the past 20 years, the telecommunications infrastructure
has been migrating to massive computerization and extensive use of
fiberoptic cables. The widespread use of fiber has been made possi-
ble, in part, by the industry’s acceptance of SONET and SDH as the