Fiber optics makers have long been a major player in the broadband industry, but a report by a group of prominent technology companies this month says the industry is facing a “slow and steady erosion of the value of its assets.”
In a joint report, the firms, the Consumer Technology Association and the New York Technology Alliance, found that fiber optics, which include many of the technology companies that make the optical fiber used in fiber-optic cables, are losing value and are being used as a commodity.
“Fiber optics has become a commodity,” said Paul Boulton, executive director of the consumer technology group.
“I can’t say that fiber is in the future, but it is not a good place to be.”
The report, titled “It Looks Like a Slow and Steady Degradation of Fiber Optic Assets,” was commissioned by the industry’s main trade association, the National Fiber Optics Association.
The report was based on data from the companies’ survey of companies that manufacture fiber optics.
It said that in 2015, about $3 billion worth of fiber optic assets had been acquired, compared with $1.9 billion a decade earlier.
“In the past few years, fiber optics has experienced significant declines,” the report said.
“These declines have accelerated with the transition from fiber optics as a high-speed, high-capacity communications network to fiber optics primarily as a medium of exchange for optical fiber.”
In 2015, fiber optic cable alone accounted for $3.3 billion in revenue, down from $4.6 billion in 2007, according to the report.
“We estimate that the value lost to fiber-to-the-premises (FTTP) network adoption over the past decade has been at least $1 billion,” the companies wrote in their report.
The companies said the decline in fiber prices is partly driven by a shift from fiber to fiber cable and from optical fiber to optical broadband networks.
“This transition has created opportunities for new entrants,” the researchers wrote.
“The new entrants in the optical network business include providers that are increasingly focusing on wireless and 3G/4G services, which are more expensive than fiber.
The growth of the wireless market has also contributed to the decline of fiber prices.”
The report cited a recent survey by the Institute for Local Self-Reliance, which said that the industry lost more than $5 billion in the last decade to non-fiber suppliers.
The survey found that the largest decline was in the semiconductor and electronics business.
“It is a very important time for the industry because we are seeing the beginning of the end of fiber,” said David Linsley, president of the trade association.
“There are now only a few companies that are still making fiber optics,” he said.
A number of technology companies have announced that they are leaving the industry.
The Wall Street Journal reported in May that Facebook was leaving in 2022.
Facebook said it was leaving to pursue more “high-growth” businesses and was considering leaving the telecommunications business.
Google, which was in charge of a wide array of Internet companies, also announced in May it was cutting its ties to its parent company, Alphabet.
Google said it would be merging with rival Google Fiber, which is owned by Alphabet.
Another company that has left the industry in recent years is Google Fiber.
It announced last month that it would lay off as many as 3,000 workers.
Google Fiber said it also was considering a deal with another company to bring fiber optic to its network.
The tech companies report came as the Federal Communications Commission is set to vote on a proposal to roll back net neutrality rules that require Internet service providers to treat all Web traffic equally.
Net neutrality is the principle that Internet service should not be subject to any form of regulation, including blocking or throttling.
The proposal has become an important rallying point for the tech companies who argue that the rules have prevented the rise of new technologies.