New TFI Report Recommends 20-25 Year Depreciation Life for New Fiber Optic Cable in the Local Exchange Network

Share Article

Technology Futures, Inc. (TFI) announces a new recommended depreciation life of 20 to 25 years for newly-installed fiber optic cable in the local exchange network. TFI's prior recommendation was 15 to 20 years, which reflected the combined impacts of physical mortality, technological substitution, and access line losses due to competition. Documented in its new report "Depreciation Lives for New Fiber Optic Cable in the Local Exchange Network," this applies to the fiber cable that is going into the massive network upgrades such as AT&T's Project Lightspeed and Verizon's FiOS.

Technology Futures, Inc. (TFI) announces a new recommended depreciation life of 20 to 25 years for newly-installed fiber optic cable in the local exchange network. TFI's prior recommendation was 15 to 20 years, which reflected the combined impacts of physical mortality, technological substitution, and access line losses due to competition. Documented in its new report "Depreciation Lives for New Fiber Optic Cable in the Local Exchange Network," this applies to the fiber cable that is going into the massive network upgrades such as AT&T's Project Lightspeed and Verizon's FiOS.

As noted by report lead-author, Lawrence K. Vanston, Ph.D., "The incumbent local exchange carriers (ILECs) are making these investments with full knowledge that the market is competitive." He adds, "There is no obvious technological replacement for the full-spectrum fiber the ILECs are now placing."

The report also addresses other factors that might impact economic depreciation lives. One example is obsolescence from new network architectures and topologies. Another is the impact of new competitors such as broadband powerline and wireless broadband. The analysis concludes that, for general purposes, the 20 to 25 year recommended life is sufficient to account for these factors, at least for the time being.

The new recommendations apply only to local exchange fiber and only to networks being upgraded to very high speed broadband such as Project Lightspeed and FiOS. The TFI depreciation life recommendations have long been used for valuation, regulatory, planning, and financial reporting. The TFI depreciation studies are sponsored by the the Telecommunications Technology Forecasting Group, comprised of AT&T, Bell Canada, Qwest, and Verizon.

For a table of contents and list of figures for "Depreciation Lives for New Fiber Optic Cable in the Local Exchange Network," please see below or visit http://www.tfi.com/pubs/r/r02008_deplives.html.

We would be pleased to have this report reviewed by publications and/or be cited for articles examining the subject matter. We would also be glad to be interviewed and quoted for articles relating to the subject matter.

Lead-author Lawrence K. Vanston, Ph.D., is an internationally- recognized authority in the use of technology forecasting in the telecom industry. His research reports and forecasts are used and referenced extensively worldwide. His forecasting track-record (see sample attached or http://www.tfi.com/about/trackrecord.html) is legend. The September 21, 1998 issue of "The Wall Street Journal" featured an in-depth interview entitled "Consultant's Call: Lawrence Vanston Makes Some Pretty Bold Predictions for the Future of Telecommunications. He Has Been Right Before." The predictions therein have come true as well. His bio is attached or see http://www.tfi.com/staff/bios/vanstonl.html.

Co-author Ray L. Hodges brings over 30 years of telecom expertise and experience to his work at TFI, including 25 years with GTE Telephone Operations. Mr. Hodges' views and the results of his research have been cited by such publications as "Telephony," "America's Network," "Lightwave," "Wired," "Inter@ctive Week," and "Wireless Systems Design." His bio is attached or see http://www.tfi.com/staff/bios/hodges.html.

For 30 years, TFI has helped organizations plan for the future by offering outstanding technology forecasting, strategic planning, trend analysis, and strategic market research services and publications in high-technology and telecom technologies. Drawing on proven, quantifiable forecasting methods and strategic applications, we combine the vision of the futurist with the down-to- earth judgment of the technologist. Let us be "Your Bridge to the Future."

We are always happy to comment on the subjects of technology and telecom trends. For a list of many of the citations by our staff members, please see TFI News at http://www.tfi.com/pressroom/tfinews.html. For press information, please see our Press Room at http://www.tfi.com/pressroom/index.html.

Press Contact: Please contact Ms. Carrie Vanston at (800) TEK-FUTR, (512) 258-8898, or by e-mail with questions about the report and/or to arrange an interview with Dr. Vanston or Mr. Hodges. They and the TFI staff are also always happy to comment on technology forecasting principles and technology and telecom trends.

Purchasing Contact: Please click here for purchasing information. Readers may also contact Debra Robison at (800) TEK-FUTR or (512) 258-8898, fax (512) 258-0087, or send email. The report is $495.

Thank you for your attention.

Technology Futures, Inc. - Tel: (800) TEK-FUTR or (512) 258-8898
13740 Research Blvd., Bldg. C - Fax: 512-258-0087
Austin, TX 78750-1859
http://www.tfi.com

Depreciation Lives for New Fiber Optic Cable in the Local Exchange Network

Table of Contents:

  • Introduction and Summary
  • Physical Mortality
  • Fiber Technology
  • Architectural or Topological Obsolescence
  • Competition
  • Summary of Factors Impacting Existing and New Fiber

List of Figures
1. Age-Survivor Curve for Fiber Optic Cable
2. Broadband Households by Nominal Data Rate
3a. Illustrative Example of the Impact of a Technology Shift Coincident with 100 Mb/s Subscriber Forecast with 20% of the Fiber Replaced or Stranded
3b. Illustrative Example of the Impact of a Technology Shift Coincident with 100 Mb/s Subscriber Forecast with 50% of the Fiber Replaced or Stranded
4. Illustrative Example of Potential Market Share Loss after Entry by New VHS Broadband Providers (Competitive Scenario 1)
5. Wireless Subscribers by Technology Generation
6. Illustrative Example of Possible Replacement by Future Wireless Services (Competitive Scenario 2)
7a. Illustrative Example of the Impact of New VHS Broadband Providers (Competitive Scenario 1)
7b. Illustrative Example of the Impact of Possible Replacement by Future Wireless Services (Competitive Scenario 2)

###

Share article on social media or email:

View article via:

Pdf Print

Contact Author

CARRIE VANSTON
Visit website