American Telephone & Telegraph Co. yesterday announced a $2 billion program to create a communications network of fiber optic cables and microwave radios that will link major U.S cities with Europe and Asia by the end of the decade.
Robert W. Kleinert, president of AT&T Communications, the long distance and international communications branch of AT&T, said the new lightwave fiber optic technology used in the expansion was to communications what the microchip was to the computer. He called the new technology the telecommunications pulse of the future.
Kleinert said AT&T was expanding its network because of increased business demand for new high-speed voice and data services.
The bulk of the expansion will consist of fiber optic systems that use light pulses to transmit data and voice signals over hair-thin strands of glass.
The new fiber optic technology to be used by AT&T will allow nearly 170,000 simultaneous telephone conversations to be carried on a cable less than an inch thick. Copper cable wires currently in use would have to be half a foot thick to accommodate the same communications traffic.
"AT&T will construct the world's largest fiber optic telecommunications network by the end of this decade," Kleinert said. "We intend to harness its tremendous power to meet our business and residence customers' growing needs for high-capacity, highly reliable voice, data and video services."
Demand for services such as videotext, electronic mail, videoconferencing, and high-speed data transmission, is growing by more than 20 percent a year, Kleinert said.
The network, which will be in place by 1990, will supplement already completed digital portions of AT&T's network such as an Eastern corridor fiber optic system linking Washington to Boston, and San Francisco and Bakersfield, Calif.
The expanded system will use 21,000 miles of fiber optic cable, while the rest of the system will use 9,000 miles of digital microwave radio links and 4,500 miles of conventional copper telephone cables converted to handle digital communications for the expanded network, Kleinert said.
More than 4,200 miles of the new fiber optic routes will be in service by 1987, Kleinert said. The routes will connect various Midwestern and Southeastern cities such as Chicago with St. Louis, St. Louis with Dallas and Atlanta with Miami. Major fiber optic routes linking Philadelphia to Chicago and Atlanta to Richmond should be in service by 1986, he said.
Rapid advances in the fiber optic technology are bringing down the technology's cost as its capability increases, Kleinert said. For example, fiber optic cables installed by AT&T as little as a year ago could carry only about 10,000 simultaneous conversations. The cost of the cable per circuit mile will drop, Kleinert predicted, from a current average of $8 to less than $1 per circuit mile in 1988.
Expanding the network will enable AT&T to control its costs because the facilities cost less to build and operate than other technologies. Kleinert said rates for various business services could thus be expected to drop, but he could not estimate how much long-distance rates might fall for residential customers from the construction of the network.
As part of the network construction program, AT&T is also negotiating with various governments and other private companies to construct an undersea fiber optic cable that would link California with Hawaii, Hawaii with Guam, and Guam with Japan by late 1988. Construction is subject to approval by the Federal Communications Commission. By 1988, the company will also have constructed the major portion of its first fiber optic undersea cable connecting New Jersey with Great Britain and France.
Many other companies, including AT&T's competitors, have announced plans for domestic fiber optic systems because of a perceived explosion in demand for new voice and data services.
For example, Lightnet, a joint venture between Southern New England Telephone Co. and CSX Railroad, which sells fiber optic capacity to telephone companies, yesterday announced that United Telecom Communications Inc., a subsidiary of United Telecom that provides long-distance service, had signed a letter of intent to purchase millions of dollars worth of facilities in 24 states.
Some industry analysts have warned there may be an overcapacity of fiber systems if all the announced networks are constructed, but Kleinert said AT&T was not likely to run into that problem. "There is a likelihood of overcapacity if all the systems are built , but our plans will best serve our market," he said.