Fiber-optic industry Summary

  • Last updated on November 10, 2022

The fiber-optic industry transformed communication and data transmission, allowing more data to be sent using a greater bandwidth for longer distances with lower interference and attenuation. This increased the efficiency of business communications and allowed the formation of businesses that used this technology to provide services or products.

The fiber-optic industry developed during the 1970’s as a result of a number of significant scientific and technological breakthroughs during the 1960’s. Telecommunications industryScientists first demonstrated that data could be sent through glass if a proper light source could be invented. Then, in 1966, other scientists developed the laser to provide that light source. The Corning Glass Corporation developed a glass fiber with a low enough attenuation to be used to send data in 1970. In 1977, the first live telephone communication through a fiber-optic cable occurred in Long Beach, California. The successful use of lasers as a light source was achieved in 1980.Fiber-optic industry

During the 1980’s, fiber-optic cable was laid in low-density areas because it was difficult to lay in densely populated areas where the copper wire infrastructure was extensive. This was also cost-effective because fiber-optic cable had a comparative advantage over long distances. The first transatlantic fiber-optic cable was laid and became operational in 1988. From that point on, fiber-optic cables were laid across the globe even though the capital costs were high.

Between 1990 and 2000, researchers and industry promoters predicted increased demand for greater bandwidth because of the use of the Internet and the commercial possibilities for consumer services, such as video on demand. They predicted that data traffic would increase exponentially, promising enormous profits to those who made the extremely expensive investment. These promises lead to a large infusion of venture capital, which was lost when the commercial possibilities were not realized. The fiber-optic industry suffered in what became known as the dot-com bubble by the end of the decade.

Corning’s Donald Keck was the first scientist at his company to discover a glass formulation pure enough for fiber optical communication.

(AP/Wide World Photos)

Although the initial investors lost a great deal of money when the bubble burst, other investors who bought up the cable infrastructure at discount rates were able to make reasonable profits while offering the services of the fiber-optic infrastructure to customers in underdeveloped countries that could not have afforded them previously. With development of new computer platforms that interconnected easily, those with suitable training and access to computers were able to sell their services in the developed world in a way that they previously could not. New communication industries grew up around the globe. This dramatically increased the globalization of skilled labor throughout the developing world.

Further Reading
  • Agrawal, Govind P. Fiber-Optic Communication Systems. New York: John Wiley & Sons, 2002.
  • Baiman, Ron, Heather Boushey, and Dawn Saunders. Political Economy and Contemporary Capitalism. Armonk, N.Y.: M. E. Sharpe, 2000.
  • Friedman, Thomas L. The World Is Flat: A Brief History of the Twenty-First Century. New York: Farrar, Straus and Giroux, 2006.

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