The 2001 collapse of the dot-com and telecommunications bubbles was devastating to the companies laying fiber-optic communications cables. It also had a less-visible impact on that basic optoelectronic physics research that drives improvements in the speed and range of fiber-optic networks.
It takes years for physics innovations to work their way out of the lab and into the market, but the pipeline filled by research in the 1990s dried up by the mid-2000s, and we’re now seeing that the growth in the speed of fiber optic interfaces at Internet exchange points (IXPs) has slowed considerably. IXPs form the core of the Internet, where the bandwidth sold by ISPs is produced. This sluggish growth is constraining supply at a time when the global demand for Internet bandwidth is booming.
About the Author
Dennis Weller, an economist at Navigant Economics, and Bill Woodcock, the research director of the nonprofit Packet Clearing House, prepared the study on which this page is based for the Organisation for Economic Co-operation and Development (OECD)