Saturday, February 04, 2006

Peak Copper/Fiber Optic

The history of fiber optics is very interesting from above link.
Development of hardware for the first transatlantic fiber cable showed that single-mode systems were feasible, so when deregulation opened the long-distance phone market in the early 1980s, the carriers built national backbone systems of single-mode fiber with 1300-nm sources. That technology has spread into other telecommunication applications, and remains the standard for most fiber systems.

So the corresponding buildout of the fiber optic network was when copper prices was highest...

This is hard to see but the dates are from January 97. The next article is a little old but it was nice to see a backward look at what they felt back then. In the good old days of 3/26/01 of Will fiber optics overtake copper in backbone?
In every sense, fiber optics is a remarkable technology. One day it will replace copper cable. Fiber advocates, including Senior Analyst P.J. Connolly, can't understand why all companies aren't already reworking their infrastructure to bring fiber to every desk. On the flip side, copper supporters, such as East Coast Technical Director Tom Yager, think those dollars and that effort would be better invested in solving other network problems.

This has not happened yet, but we can see with copper costing more and more that the incentive now becomes when replacing or building a backbone that these decisions will become easier with lower relative costs than copper.

For one, I'm surprised that I have to mention lightning to a Texan. Also, although it sounds like something from James Bond, copper networks are a source of radio frequency emissions. If someone is motivated enough, they can capture your traffic without ever touching your physical infrastructure.

This might be off the topic but yes this I have heard from the fact of stealing cable with a simple loop antenna around a cable wire.

Frankly, I think your adaptability speech would read better if spoken to a mirror. Wake up, Tom, and realize that the endgame for copper has started. No, the transition to fiber won't happen overnight; I expect it will take at least five years, and probably ten, for fiber to overtake copper in the total number of corporate connections.

You're right after all when you talk about the momentum behind copper. It's cheap, and it's the lowest common denominator. I'd recommend it if you planned to throw everything away in three to five years anyway. But if you expect to be around for a while, invest in fiber. You'll be glad you did.

Well copper may be cheap relative to other stuff but much more than most substances.

But now the question becomes: is Silicon (or more specifically silica used for fiber optics and glass) readily available? Is the new substance just as likely to reach peak production as copper?
Silicon (Latin: silicium) is the chemical element in the periodic table that has the symbol Si and atomic number 14. A tetravalent metalloid, silicon is less reactive than its chemical analog carbon. It is the second most abundant element in the Earth's crust, making up 25.7% of it by weight. It occurs in clay, feldspar, granite, quartz and sand, mainly in the form of silicon dioxide (also known as silica) and as silicates, (various compounds containing silicon, oxygen and one or another metal). Silicon is the principal component of most semiconductor devices and, in the form of siliica and silicates, in glass, cement, ceramics. It is also a component of silicones, a name for various plastic substances often confused with silicon itself. Silicon is widely used in semiconductors because it has a lower reverse leakage current than the semiconductor Germanium, and because its native oxide is easily grown in a furnace and forms a better semiconductor/dielectric interface than almost all other material combinations.

Sounds good to me!

I remember ads in the early 80's that talked about building out the fiber optic system and how they said the fiber optics was made from one of the most abundant substances on earth-sand.

So free markets again expected the demand in the future and made adjustments in a timely fashion. Just as the early development of fiber optics was slow, as soon as prices started telling to use less expensive and potentially better results then the market shifted.

And lastly, if Carbon nanotube takes off as a substance for manufacturing and building this could be some of our carbon sinks we are looking for. Only food for thought...

P.S.: At EconLog, Arnold Kling thinks that Fiber Optic to the home will not happen but local transmitters will transmit the information to the house for the last mile of transmission. Either way copper is less likely to be used for data transmission in the long term basis. But for rural areas wi-fi and other wireless communication systems the distances are too short. So fiber still might be used in many locations.

P.P.S: De-Monetisation of Copper
Never mind the supposed ‘re-monetisation’ of gold, what about the de-monetisation of copper. The price of copper is now so high that the copper content of small denomination coins may now exceed their face value. Larry White points to the case of Korea, which is suffering from reverse seignorage:

The production cost of a W10 coin is about W40, W14 of that for copper and zinc alone.

Australian coins are 75-92% copper, although we wisely took smaller denomination coins out of circulation years ago.

Yes, we are going to transfer from good money to bad money. Seigniorage is the "Revenue or a profit taken from the minting of coins, usually the difference between the value of the bullion used and the face value of the coin." So this is true a reverse, but I was introduced to it as more of benefit derived from creating "new money" and not just the process of printing currencies. Because printing a currency in essence is making a product. If the product sells for less than its costs then it is not profitable.

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