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Connectivity

Sadly enough, one half of the world's population has never made a phone call. New communications technologies can change all of that, and none too soon. Participating in the explosion of global communications can only help those disadvantaged cultures with little opportunity to participate in economic expansion. Consequently, connectivity continues to grow globally on an impressive scale.

Major carriers such as Global Crossing and Teleglobe are developing transoceanic and transcontinental networks. Substantial investments in Internet infrastructures are also being made in China and India.

Connectivity is soaring in every major economy around the world, and this is adding large numbers of new users to the online space. As more and more low-cost PCs and Web-enabled cellular phones reach consumers through retailers, discounters, kiosks, and cyber-cafes, usage of Internet and e-commerce technologies is expected to explode in their wake.

Ironically, connectivity in many advanced countries is constrained by too little "hard-wiring" of businesses and homes from what we in the U.S. refer to as COs (central offices) maintained by the local telephone company. These businesses and residences are turning to wireless technologies in many regions to take up any slack in the last mile to the intended point of access.

This explosion in online connectivity is fueled in part by innovations like DoCoMo from NTT in Japan, which is setting up strategic alliances around the world to handle anticipated market expansion. DoCoMo, a leader in the Japanese market, offers Web-enabled cellular-style phones, devices that are catching on rapidly there.

Meanwhile, as customer demands for access are occurring, so are their requests for higher and higher speed connectivity. Fueling this boom are bandwidth-hungry applications such as video streaming, downloading of pictures and music, interactive conferencing, and gaming.

Overall, long distance Internet capacity is slated to be well in excess of anticipated peak demand in both the U.S. and Europe. In fact, some analysts predict that through 2004, two-thirds of European and one-third of U.S. bandwidth in the long haul market will go unutilized. These two authors, however, predict that there will still be bottlenecks and shortages in the "last mile" at access points closest to the customer. Those shortages are expected to continue for at least three or four more years until broadband is more widespread.

Hard drive and DRAM producers are counting on demand for their technologies to keep them in the memory business. However, as advances in memory technology keep giving PC manufacturers more and more to work with, software companies, in turn, use up as much of this resource as possible with ever-larger products. Unfortunately, bandwidth appears to be headed down a similar path: the more bandwidth given to end users, the quicker those distributing content and services online deplete it.

Dial-up for consumers will still be much more than 50 percent of all Internet access methods over the next three years. While Digital Subscriber Line (DSL) technology continues to lag behind cable modem installations as of Q3 2000, DSL installation growth rates are climbing rapidly. Yankee Group expects there will be five million DSL users and 7.6 million cable modem users in the U.S. by 2003, still a small fraction of those using dial-up and other access methods.

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