Dave Rusin, CEO, American Fiber Systems

An analyst asked me, ‘How do you know you've hit bottom here?’” said Dave Rusin, CEO of American Fiber Systems. “I said, ‘It's simple. Everyone in my firm is on Prozac. And the investors have gotten off of testosterone and are totally on Viagra.’”

The more external signs that the worst has passed, he said, is a slow swell of interest in AFS's product: dark fiber in second-tier cities. Interest in early spring won't translate into real, photonic traffic until the second half of the year, but Rusin said he's just glad to see motion again after Sept. 11 brought the industry to a screeching halt.

For a business historically dependent on “XLECs” (Rusin's catch-all term for emerging carriers) for half its business, it's no surprise that growth has slowed. But although Sept. 11 had a cooling effect on XLECs, Rusin said it activated a new segment: Large enterprises are now increasingly interested in buying dark fiber to maintain greater network security and faster storage backup in remote facilities. And in many cases they no longer trust financially troubled upstarts to run the network for them.

Rusin spends much of his time these days correcting misconceptions about bandwidth glut. So he's telling you this for the last time: There may be excess fiber in long-haul routes between top-tier cities, but there is no fiber glut anywhere else, especially in lower-tier cities, where AFS is often the only alternative to the ILEC.

“We know the glut is not there,” said Rusin. “We're seeing large enterprises wanting 24, 48 strands of fiber. This is the tip of the iceberg. I wouldn't be surprised if, in 12 to 18 months, you see the exact opposite written: There's a fiber shortage.”

The seven cities AFS has fiber — Kansas City, Nashville, Cleveland, Minneapolis/St. Paul, Salt Lake City, St. Louis and Hartford, Conn. — collectively form a $5 billion market for telecom services, said Rusin. And a recent study he contracted through Cambridge Strategic Management projects that figure will rise at a compound annual growth rate of 45%. That's the kind of growth even Viagra users would envy.—Ed Gubbins