BROADBAND NETWORKS Fiber Supply Continues To Far Exceed Its Demand.(INTERNET & TECHNOLOGY)

Byline: Antonio A. Prado

A century and a half ago, railroads laid thousands of miles of new track at a dizzying pace. They were bolstered by hordes of investors pouring boxcar-sized loads of money into the nascent industry.

Then, after the Civil War, the bottom fell out due to excess capacity. Bankruptcies and a stock market crash followed.

Many say a similar plague is ailing today's fiber-optic industry. Analysts say there's just too much capacity. And now investors are running away.

There are "20 sellers for every buyer on the New York-to-London cable," said Grant Zimmerman, a bandwidth broker for Enron Broadband Services. The Dallas-based firm runs a bandwidth capacity trading exchange.

That kind of gap between demand and supply sends prices plunging.

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