OFC: Level 3 declares bandwidth price plummet over

ANAHEIM--The age of rapidly falling bandwidth prices is over, according to Robert Feuerstein, senior architect at Level 3 Communications.

Though bandwidth prices in 2005 were just 10% of what they were in 2000, the wholesale carrier reported bandwidth pricing pressure easing late last year.

"The year of collapsing bandwidth prices has come to an end," he said. "Thirty to forty percent price compression is over."

Speaking this week at the Optical Fiber Communications/National Fiber Optics Engineers Conference, Feuerstein also pooh-poohed several optical technology and service innovations that have generated industry buzz in recent years.

For example, all-optical switching is not practical today nor will it be for the next five years or so, he said. Though Level 3 supports tens of thousands of optical connections today and adds new gigabit-speed links daily, it will take years for bandwidth demands to necessitate purely photonic switching.

"Eventually we'll cross the bar where we absolutely have to have [all-]optical switching," he said. "But for the next few years, it will just be a small niche application."

Though all-optical networks are useful in sending wavelengths across the country inexpensively, he said, a network's value is measured in the number of people and nodes it connects. Therefore, the best network is not one that can send traffic the greatest distance at the cheapest price, he argued, but one that allows the addition of the most nodes (i.e., subwavelength add/drop sites) at the cheapest price. "We want to be able to inexpensively add new sites," he said.

Level 3 has deployed Infinera's DTN optical switch as an alternative to all-optical networks, but that equipment supports the carrier's IP backbone rather than its Sonet network.

Feuerstein also took a dim view of another industry buzzword: optical mesh networks. Though attractive to carriers for their flexibility and efficiency, they contain a dirty little secret, he said. Whereas Sonet networks reserve a redundant path for every link, mesh networks share some backup routes. So if two customers who share the same backup route have network outages at the same time, one will lose service.

"For carriers, mesh protection is great," he said. "But the customer needs to be aware there's a tradeoff in reliability."

Feuerstein also derided the notion of offering optical wavelengths on demand, arguing that it requires carriers to make expensive upfront investments to deploy wavelengths that may go unused.

"It's big bucks," he said. "We can't afford to do that for a service that has to be overprovisioned."

In many cases, carriers can achieve a similar result with marketing rather than technology, he said. If carriers overprovision links to a customer at a discount, customers are often happy to have those cheap extra wavelengths on hand when needed.

"It's more of a pricing issue than a service requirement," he said.