Page 38 - Optical Switching And Networking Handbook

Introduction to Optical Communications 23

for decades. Many others, such as the competitive local exchange car-
riers (CLECs), CATV companies, electric utility companies, and the
3
incumbent local exchange carriers (ILECs), are relatively new in
this portion of the industry. The regional Bell operating companies
(RBOCs) have a great deal of fiber in place within their major oper-
ating cities. They are now looking to expand their capacity as
cheaply as possible because of the embedded copper plant that is
rapidly becoming a liability.The newer carriers (like the CLECs) are
planning to build networks based on new fiberoptics that are signif-
icantly less expensive than those used by their competitors. Their
goal is to enter the market with a sufficiently attractive cost per
minute for voice calls and cost per bit for data transmission to
attract users to them. The cost per minute has long been the mea-
sure of data and voice transmissions.
A T3 operating at nearly 45 Mbps costs from US$80,000 to
US$100,000 per month from the East Coast to West Coast. This
makes the cost of transmission very reasonably priced when all
things are compared. Let’s look at the overall cost per minute for a
45-Mbps link. At US$80,000 per month, this can be priced as shown
in Table 1-2 to keep things straight.
One can see the differences by using the T3, for example. However,
prior to having the fiber-based networks, the carriers charged much
more for the service on copper. Using an analogy of those costs, the
costs would be far more dramatic, as shown in Table 1-3 for a copper-
based architecture in the past. In this scenario, using a copper cable
plant, the cost per T3 from East Coast to West Coast on the carrier
networks varied between $560,000, $280,000, and $175,000 per
month based on variables of length of agreement, cities connected,
and so on.

3 The Bell Systems LECs are more experienced in using fiber since the 1970s and
1980s.