Transcript: The mystery of 'dark fiber'

Today we're here to talk about the mystery of 'dark fiber.' Dark fiber, what is it? Well, it's a telecom term you used to hear a lot about. You haven't heard much about it lately and you're going to hear more about it later. Dark fiber is a couple of things: excess fiber optic capacity that was laid down in the ground during the boom of the telecom era and has never been used. It can also refer to a product, which is fiber that you buy from a carrier, but doesn't have any electronics or photonics associated with it. You have to supply all the equipment yourself. You're just actually buying the glass thread that's underground.

So why would you build it? Well, there are 3 reasons. I call them the smart, the stupid and the really smart reason. The smart reason: it's cheaper to build once than to build twice. In other words, if you're putting fiber optic cable from San Francisco all the way to Chicago, you don't want to do that every year. What you want to do is pull cable, install it, put it in the ground, get the right aways once, put as much as you're going to need for the next 5 years because it's cheaper to do that than to go back and renegotiate that or to reinstall it every year or every other year. So it's a smart reason. The stupid reason, people overestimated the demand for fiber and for telecom capacity in general. They kept seeing these explosions and network access and they said, "You know what? This of course is going to go up and up and up forever." Well, it is going up, but it's going up like this. It's not going up like this. So lots of telecom companies went broke installing fiber that never got used. So smart reason, stupid reason.

What's the really smart reason? Well, you know what? There's going to be a product there someday. At some point someone is going to say, you know what, I just need the glass, the fiber optic cable between these two locations, but I want to put my equipment at both ends. I want to, you know what, I want to send movies and I want to send them over a private fiber optic network. I want to send MP3 files and build a private network and I want my hardware to build signs of that. At some point, fiber optic is going to be something that people are going to buy, not just telecom carriers, but large organizations, entertainment companies. It might be the really smart reason to have dark fiber.