As the quest continues for more bandwidth to handle voice, data and video, the fiber-optics market has quietly emerged as the potential winner for a long-term solution. Over the last year, this market has benefited from declining equipment costs, government rulings and, most important, new and planned fiber deployments around the globe. In the United States alone, there has been intense interest and rollouts by SBC, Verizon and Bell South, which view fiber-optic technologies as a way to finally compete against the cable operators that have been steadily slashing their profits.

Passive optical networks (PONs) offer a number of benefits over competing copper-based and fiber-based technologies. Since a PON is passive, there are no active electronics in the loop, which means lower maintenance costs. In addition, it is powerful enough to enable the service providers to handle emerging and bandwidth-intensive applications.

PONs can be deployed as fiber to the premises, to the home, to the building or to the curb. Service providers around the globe are embracing them as a competitive weapon and as a long-term infrastructure because passive optical networking does not require expensive plant upgrades in the future. In the last year, the three big North American service providers — Verizon, SBC and Bell South — issued a request for proposals for broadband PONs (BPONs) and they plan, over the next few years, to service up to 13 million subscribers.

BPON, which was the first PON technology developed, is now a mature and reliable technology ideal for mass rollouts around the world. In the United States, Verizon is deploying AFC's BPON systems in volumes and in Japan, more than a half million BPON units have been deployed; these numbers are expected to increase.

Two subsequent PON technologies in the early stage of lab trials are Ethernet-based PON, which is primarily used for Ethernet services, and Gigabit PON, developed as a migration path from the BPON standard to next-generation networks. However, these technologies are still in the immature stages of development and will not be ready for mass deployment for quite some time.

In terms of yearly growth, analysts such as Infonetics estimate that the worldwide PON market was $46 million in the first quarter, en route to a projected $532 million by 2006. The reason for this growth is that carriers finally have a broadband service that will help them regain some of their lost revenues and compete effectively with the cable providers. And for the end user this is all good: Customers receive the bandwidth they require today, can be assured of unlimited bandwidth for future applications and can enjoy the savings from decreased component costs. Clearly, 2004 will be remembered as the year that fiber optics took off.

Andrew Vought, Chief Executive Officer, BroadLight Inc., Mountain View, Calif.