DiCon and the Fiberoptic Industry



Fiberoptic Industry Background

In 1966, the publication of a paper by Dr. C. K. Kao (ITT England) broke new ground by stating that a light signal can transport information by being guided through an optical fiber, made of pure silicon oxide, known as silica (SiO2). By 1970, the Corning Glass Works, a subsidiary of Corning Incorporated, produced a fiber of sufficient purity for use in telecommunications.

This breakthrough could not have come at a better time. Throughout the 1970s and 1980s demand for communications services expanded greatly, driven by the demand for data communications and new applications such as wireless. By the 1990s, the Internet had established itself firmly in the mainstream consumer market. Data traffic was rapidly expanding, adding to the ever-increasing levels of voice and video traffic being carried across vast terrestrial and intercontinental communications networks. The evolving fiberoptic technology could accommodate this growth. It offered definitive advantages (higher capacity or bandwidth, lower signal losses, and a more flexible platform to accommodate a wide range of algorithms or protocols, etc.) over existing copper wire and cable infrastructure, as evidenced by its subsequent widespread deployment.

By the late 1990s, the widespread acceptance of fiberoptic technology as an efficient and cost-effective means of communication had made it the top-performing wireline technology in a $1-trillion communications services market, according to the International Telecommunications Union. The fiberoptics communications industry grew within a networking hierarchy led by a group of companies who invested the necessary capital to build terrestrial and undersea fiberoptic networks, and bought the equipment that lit up the fiber. Collectively referred to as telecommunications service providers or carriers, these corporations own and operate the optical networks that carry the world’s communications traffic.

The carriers rely on communications systems providers and network equipment manufacturers, who design, build and sell the fiberoptic equipment that powers the carriers’ optical networks. Companies in this group, such as Alcatel, Nortel, Lucent, Cisco Systems, Huawei Technologies, Ericsson, Ciena, and Tellabs, form the intermediate level in the optical networking industry hierarchy. They provide the underlying technology to optically transport ever-increasing amounts of information, using a variety of protocols, through a broad range of communications systems that can be broadly broken down into three main categories:
  • Long-haul undersea and terrestrial communications networks that typically interconnect major city centers, traffic hubs, and even continents, traversing large geographical distances, normally over 200 miles.
  • Metropolitan Area Networks (MAN) or Metro networks that typically cover metropolitan areas such as New York or Chicago and span distances anywhere between 10 and 200 miles.
  • Access networks (including cable TV) that typically provide local fiberoptic cable and telephone access as well as connect different buildings in a neighborhood and/or offices within a single large building.
Each of these segments is characterized by different bandwidth, cost, scalability, deployment, operating performance, and logistical requirements. To develop and manufacture their network equipment architectures and systems, the network equipment manufacturers rely on Optical Components Manufacturers (or OCMs), who produce individual segments of the optical network. The OCMs, as a group, constitute the foundation of the optical networking industry hierarchy. DiCon is one of the most important members of this group.