| Abstract: | International telecommunications traffic relies entirely on two modes of transmission, satellites and fiber optics, which exhibit considerable but not complete fungibility. This article explores the economic and geographic dimensions of these two industries in the context of the growing market in global data and telephony traffic. First, it summarizes the changing conditions that have accentuated competition between them, including deregulation, technological change, and globalization. Next, it examines the changing cost structures, transmission capacities, and traffic volumes for each technology in the critical transatlantic and transpacific markets. Throughout, it documents the steady encroachment by fiber optics firms that threatens the viability of commercial satellite operators, a challenge the latter hope to meet though the growth of the cellular telephone market. |
