Geography Reference
In-Depth Information
Fig. 2.2
The world's major fiber optic cables. Source After Staple (2007)
In addition to the two major markets, fiber lines have extended into several newer
ones. In 1997, AT&T, NYNEX and several other firms (including, for the first time,
non-telecommunications firms) opened the self-healing Fiberoptic Link Around the
Globe (FLAG), a system that eventually expanded to 55,000 km connecting Europe
and Southeast Asia. The world's longest submarine telecommunications network,
FLAG, the world's longest submarine telecommunications cable, filled a void in
undersea cable capacity between Europe, the Middle East, and Asia. It also hooked
into regional systems such as the Asia Pacific Cable Network, a 12,000 km system
linking Japan, South Korea, Taiwan, Hong Kong, the Philippines, Thailand, Vietnam,
and Indonesia, as well as the Caribbean Fiber System (i.e., the Eastern Caribbean
Fiber System, Antillas 1, Americas 1, and Columbus 2). Unlike earlier systems,
FLAG allowed carriers to purchase capacity as needed, rather than compelling them
to purchase fixed quantities.
Although they overlap to a great extent, satellite and fiber-optic carriers exhibit
market segmentation. Fiber is heavily favored by large corporations for data
transmission and by financial institutions for electronic funds transfer systems.
Satellites tend to be used more often by international television carriers. Telephone
and internet traffic use both. These two types of carriers are differentiated geo-
graphically as well: Because their transmission costs are unrelated to distance,
satellites are optimal for low-density areas (e.g., rural regions and remote islands),
where the relatively high marginal costs of fiber lines are not competitive. Fiber-
optic carriers prefer large metropolitan regions, where dense concentrations of
clients allow them to realize significant economies of scale in cities where fre-
quency transmission congestion often plagues satellite transmissions. Satellites are
ideal for point-to-area distribution networks, whereas fiber-optic lines are prefer-
able for point-to-point communications, especially when security is of great
concern. Historically, the primacy of each technology has varied over time. From
