New Market Research Report

Depreciation Lives of Fiber Optic Cables in the Local Exchange

AUSTIN, Texas, June 2003-Technology Futures, Inc., an internationally-recognized leader in telecom forecasting, announces the publication of its new report "Depreciation Lives of Fiber Optic Cables in the Local Exchange," authored by Ray L. Hodges (Senior Consultant, TFI) and Lawrence K. Vanston, Ph.D. (President, TFI.) The report addresses the economic life of single-mode fiber optic cable installed by incumbent local exchange carriers (ILECs) in the local exchange network. The depreciation lives of these cables are derived from analysis of demand, technology substitution, physical mortality, and competitive factors. The technology and competitive issues driving network changes are explained in detail. Key findings of the report are listed below.

The research was sponsored by the Telecommunications Technology Forecasting Group (TTFG), a consortium of telephone companies comprised of Bell Canada, BellSouth Telecommunications, Qwest, SBC, Sprint, and Verizon.

According to co-author Ray Hodges, "When fiber was introduced into the local exchange in the early 1980s, we had little on which to base depreciation lives. We now have experience regarding the physical mortality of fiber as well as experience with single mode fiber replacing multimode fiber." He adds, "There are now advanced types of fiber capable of displacing the embedded single mode as well as competitive issues that must be considered in the depreciation life estimation."

Key Findings From This Latest TFI Report:
• Todays embedded standard single mode fiber cables are already obsolete for high-density, long-haul applications and may also become so in the local exchange.
• There are three types of advanced fibers available today that have significant advantages when CWDM or DWDM are utilized.
• TFI forecasts that approximately 95% of U.S. households will be online by 2020, and almost all of these will be broadband users.
• Presently, there is very little fiber in the distribution plant. The timing of placing distribution is late enough that, in all likelihood, it will be advanced fiber. With long-haul fiber already using advanced fiber and newly placed distribution fiber also being advanced fiber, a bottleneck will be created in the middle of the network that contains the most outdated single-mode fiber.
• TFI forecasts that, by 2010, ILECs will provision one-third fewer access lines than today, and that, by 2015, less than half as many. Competition will strand large quantities of network equipment including fiber cables, reducing the economic life.
• TFI continues to recommend a projection life of 15 to 20 years for non-metallic cable.

This report would be of interest to:
• Incumbent local exchange carriers
• Competitive LECs
• Interexchange carriers
• Internet service providers
• Telecom equipment manufacturers
• Regulatory personnel
• Depreciation professionals

A table of contents and a list of exhibits follow this press release.

We would be pleased to have this report reviewed by your publication and/or be cited for articles examining the subject matter. Mr. Hodges and Dr. Vanston would also be glad to be interviewed and quoted for articles relating to the subject matter.

Co-author Ray L. Hodges brings over 30 years of telecom expertise and experience to his work at TFI, including 25 years with GTE Telephone Operations. His interests are focused on emerging wireless technologies and markets and their impacts on the public telecom network. Mr. Hodges' views and the results of his research are often cited by such publications as "Telephony," "America's Network," "Lightwave," "Wired," "Inter@ctive Week," and "Wireless Systems Design."

Co-author Lawrence K. Vanston, Ph.D., is an internationally-recognized authority in the use of technology forecasting in the telecom industry. His research reports and forecasts are used and referenced extensively worldwide. Dr. Vanston's views on telecom trends are also often cited in such major publications as "The Wall Street Journal," "Telephony," "America's Network," and "Lightwave."

Technology Futures, Inc. helps organizations plan for the future. Drawing on proven, quantifiable forecasting methods and strategic applications, we customize our approach to the technology, financial, and marketing issues facing our clients. Our services include consulting, research, and education.

We are always happy to comment on the subjects of technology and telecom trends. For a list of citations by our staff members, please see "TFI News."

PRESS CONTACT: Please contact Ms. Carrie Vanston by telephone at (323) 436-0314 or by email at cvanston@tfi.com with questions about the report and/or to arrange an interview with Mr. Hodges, Dr. Vanston, or other technology and telecom experts at TFI. If you need assistance immediately and Ms. Vanston is unavailable, please contact the corporate offices in Austin at (512) 258-8898 or (800) 835-3887.

PURCHASING INFORMATION FOR YOUR READERS: Report details and ordering information is available at http://www.tfi.com/pubs/fiber.html. Readers interested in purchasing a copy may also contact Debra Robison, Technology Futures, Inc. at (800) TEK-FUTR or (512) 258-8898, fax (512) 258-0087, or send email to pubsales@tfi.com. The 130-page report is priced at $495 in North America and $510 elsewhere.

Thank you for your attention.

# # #

June 2003
Technology Futures, Inc.
13740 Research Boulevard, Building C
Austin, TX 78750
(800) 835-3887 or (512) 258-8898
Fax: (512) 258-0087
www.tfi.com