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First developed in the 1970s, fiber-optics have revolutionized the telecommunications industry and have played a major role in the advent of the Information Age. Because of its advantages over electrical transmission, optical fibers have largely replaced copper wire communications in core networks in the developed world.

The process of communicating using fiber-optics involves the following basic steps:

1. creating the optical signal involving the use of a transmitter,[3] usually from an electrical signal
2. relaying the signal along the fiber, ensuring that the signal does not become too distorted or weak
3. receiving the optical signal
4. converting it into an electrical signal

Optical fiber is used by many telecommunications companies to transmit telephone signals, Internet communication and cable television signals. Due to much lower attenuation and interference, optical fiber has large advantages over existing copper wire in long-distance, high-demand applications. However, infrastructure development within cities was relatively difficult and time-consuming, and fiber-optic systems were complex and expensive to install and operate. Due to these difficulties, fiber-optic communication systems have primarily been installed in long-distance applications, where they can be used to their full transmission capacity, offsetting the increased cost. The prices of fiber-optic communications have dropped considerably since 2000.

The price for rolling out fiber to the home has currently become more cost-effective than that of rolling out a copper based network. Prices have dropped to $850 per subscriber[citation needed] in the US and lower in countries like The Netherlands, where digging costs are low and housing density is high.

Since 1990, when optical-amplification systems became commercially available, the telecommunications industry has laid a vast network of intercity and transoceanic fiber communication lines. By 2002, an intercontinental network of 250,000 km of submarine communications cable with a capacity of 2.56 Tb/s was completed, and although specific network capacities are privileged information, telecommunications investment reports indicate that network capacity has increased dramatically since 2004.

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