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Depreciation Lives for Fiber Optic Cables in the Local Exchange

  • ID: 342889
  • Report
  • February 2003
  • 72 Pages
  • Technology Futures, Inc
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This report addresses the economic life of single-mode fiber optic cable installed by incumbent local exchange carriers (ILECs) in the local exchange network. The depreciation lives of these cables are derived from analysis of demand, technology substitution, physical mortality, and competitive factors. The technology and competitive issues driving network changes are explained in detail.

Key Findings From This Latest Report
Today's embedded standard single mode fiber cables are already obsolete for high-density, long-haul applications and may also become so in the local exchange.

There are three types of advanced fibers available today that have significant advantages when CWDM or DWDM are utilized.

Our forecasts that approximately 95% of U.S. households will be online by 2020, and almost all of these will be broadband users.

Presently, there is very little fiber in the distribution plant. The timing of placing distribution is late enough that, in all likelihood, it will be advanced fiber. With long-haul fiber already using advanced fiber and newly placed distribution fiber also being advanced fiber, a bottleneck will be created in the middle of the network that contains the most outdated single-mode fiber.

Our forecasts that, by 2010, ILECs will provision one-third fewer access lines than today, and that, by 2015, less than half as many. Competition will strand large quantities of network equipment — including fiber cables, reducing the economic life.

We continue to recommend a projection life of 15 to 20 years for non-metallic cable.

Who should read this report?
Incumbent local exchange carriers
Competitive LECs
Interexchange carriers
Internet service providers
Telecom equipment manufacturers
Regulatory personnel
Depreciation professionals
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Chapter One: Introduction and Executive Summary
Depreciation Background
Physical Mortality
Technology Obsolescence
Technology-Driven Substitution
Our Recommendations for Non-Metallic Cable Depreciation

Chapter Two: Mortality Analysis
Aging
Hazards
Mortality Curves

Chapter Three: Competitive Factors
Competition from CLECs
Competition from Cable Television
Wireless Competition
Competition from Broadband
Forecasts for Competition in the Local Exchange

Chapter Four: Technology Obsolescence
Background
Technical Issues
Advantages of Advanced Fiber
Full Spectrum Fiber

Chapter Five: Demand-Driven Substitution
Background
Demand-Driven Forecasts

Chapter Six: Technology-Driven Substitution

Chapter Seven: Conclusions
Appendix: Forecasting Methods
Example
Impact of Competition
Estimation of Depreciation Lives
Contrast with the Mortality Approach

List of Exhibits with Featured Graph
Figure 1.1 Age-Survivor Curve for Fiber Optic Cable
Figure 1.2 Survivor Curve (Installed Base)
Figure 1.3 Substitution of Advanced Fiber for Standard Single-Mode Fiber Optic Cable — Based on Distribution Fiber Adoption Scenarios
Figure 1.4 Mortality and Technology Survivor Curves for Standard Single-Mode Fiber Optic Cable — Technology Substitution Based on Interoffice and Feeder Fiber for Metallic Substitutions (Not Accounting for Competitive Impacts)
Figure 1.5 Combined Survivor Curves for Standard Single-Mode Fiber Optic Cable — Technology Substitution Based on Middle Scenario Distribution Fiber Adoption
Figure 1.6 Substitution of Advanced Fiber for Standard Single-Mode Fiber Optic Cable — Based on Interoffice and Feeder Fiber for Metallic Substitutions
Figure 1.7 Mortality and Technology Survivor Curves for Standard Single-Mode Fiber Optic Cable — Technology Substitution Based on Interoffice and Feeder Fiber for Metallic Substitutions (Not Accounting for Competitive Impacts)
Figure 1.8 Combined Survivor Curves for Standard Single-Mode Fiber Optic Cable — Technology Substitution Based on Interoffice and Feeder Fiber for Metallic Substitutions
Figure 2.1 Age-Survivor Curve for Fiber Optic Cable
Figure 2.2 Survivor Curve (Installed Base)
Figure 3.1 U.S. Residential Switched Access Lines (Narrowband), Millions of Lines by Type
Figure 3.2 U.S. ILEC-Provisioned Residential Switched Access Lines (Includes UNEs and Resale), Millions of Lines — Narrowband and Broadband
Figure 4.1 North American Data-Rate Projections
Figure 5.1 U.S. Broadband Households — 2002 Forecast
Figure 5.2 Analog Modem and Broadband Data Rates
Figure 5.3 U.S. Broadband Households by Data Rate
Figure 5.4 Broadband Minimum Availability — 24 Mb/s & Above
Figure 5.5 Substitution of Advanced Fiber for Standard Single-Mode Fiber Optic Cable — Based on Distribution Fiber Adoption Scenarios
Figure 5.6 Mortality and Technology Survivor Curves for Standard Single-Mode Fiber Optic Cable — Technology Substitution Based on Middle Scenario Distribution Fiber Adoption (Not Accounting for Competitive Impacts)
Figure 5.7 Combined Survivor Curves for Standard Single-Mode Fiber Optic Cable — Technology Substitution Based on Middle Scenario Distribution Fiber Adoption
Figure 6.1 Substitution of Advanced Fiber for Standard Single-Mode Fiber Optic Cable — Based on Interoffice and Feeder Fiber for Metallic Substitutions
Figure 6.2 Mortality and Technology Survivor Curves for Standard Single-Mode Fiber Optic Cable — Technology Substitution Based on Interoffice and Feeder Fiber for Metallic Substitutions (Not Accounting for Competitive Impacts)
Figure 6.3 Combined Survivor Curves for Standard Single-Mode Fiber Optic Cable — Technology Substitution Based on Interoffice and Feeder Fiber for Metallic Substitutions
Note: Product cover images may vary from those shown
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Note: Product cover images may vary from those shown
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