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SAN JOSE — The colossal slump in the fiber-optic network market — highlighted by the bankruptcy filing of Global Crossing Ltd. and other carriers’ woes — would seem all about too much supply for too little demand. 

After all, the price of bandwidth continues to plummet. 

But some analysts are questioning whether there really is a bandwidth glut. 

Fiber hookups to homes and businesses are still relatively scarce, they observe, and most long-haul routes between major cities are filling up rapidly with data and voice traffic that has been digitized. 

The problem, analysts believe, is that the upstart carriers sought growth at all costs. 

In the modern equivalent of the 19th century railroad rush, dozens of companies have laid nearly 40 million miles of fiber-optic cable in the United States, spending about $90 billion in the past five years alone. 

The light-filled threads of glass were supposed to be the foundation of the new economy, promising lightning-fast communications and big profits. 

But the companies that built out the network amassed massive debt. Prices were set to attract the next sale, not necessarily to maximize profits. 

“Enormous amounts of debt need to be serviced. To do that, you need cash flow,” said Russ McGuire, chief strategist at the consulting firm TeleChoice. 

But there wasn’t enough business from the core market of the Internet providers, large corporations and long-distance carriers. 

And the climate isn’t improving. Data transmission costs continue to plummet by as much as 80 percent annually. Last year, the price of a New York-London contract for transporting data shrunk sixfold, according to bandwidth brokerage RateXChange. 

The pricing is exacerbated by technological improvements that allow more data to flow through a fiber. A single strand that handled 625,000 simultaneous telephone conversations in 1996 can — at least in labs — now handle 150 million. 

In recent months, many optical network companies collapsed as their expectations of demand were obliterated. 

Two of the largest, Global Crossing and 360networks, have filed for bankruptcy protection. Level 3 recently said it might violate a bank covenant if sales remain weak. Williams Communications Group said it will not file for bankruptcy despite a warning from banks that it may have defaulted on terms of a credit agreement. 

Equipment makers also have been ailing. 

JDS Uniphase Corp., which makes network components, set corporate records last year when it posted a $56 billion annual loss. And Corning, the largest maker of the fiber itself, has idled its plants and laid off 12,000 workers. 

Is a glut from overbuilding to blame? 

One figure released by Merrill Lynch last year would seem to explain the industry’s predicament: Less than 9 percent of fiber worldwide is being utilized. 

But some analysts contend that proponents of the glut theory are counting unlit fiber that was laid for future use — so streets wouldn’t have to be dug up again. 

An assessment should really be based on the fiber on major transmission routes currently in use, they say. 

“There’s not enough lit capacity to meet the demand that’s out there,” said Nancee Ruzicka, an analyst at the Yankee Group. “If you look at the big carriers, some of those will have exhausted their fiber within the next three years.” 

Key to that prediction is how quickly businesses adopt faster networking technologies, such as gigabit Ethernet usage by large businesses, McGuire said. 

Home broadband, though still growing, is not much of a factor during overall peak usage hours, which occur typically during the day. 

Last year, TeleChoice looked at 22 major routes connecting the top 12 cities in the United States. Fourteen of those routes are at or above what is considered the optimal performance load for optical networks. 

“Only four of the 22 routes are anywhere close to a (bandwidth) glut situation,” McGuire said. 

Upstarts such as Global Crossing were particularly hard hit because they offered mainly data transport services that failed to differentiate their offerings from the competition. 

Williams Communications has had some success in moving from plain access to more specialized services, such as quickly setting up reliable, high-quality bandwidth to handle feeds from television networks. 

“Our business is not based on selling big fat dumb cheap pipes,” said Jason Martin, director of technology at Williams Communications. “You can easily be displaced by someone who sells a faster pipe. We want to become an integral part of a customer’s business.” 

The major carriers — including AT&T, Sprint and WorldCom — also benefit from the fact that even though their networks may not be the latest and greatest, they have built-in customers from their long-distance businesses. 

“There are other carriers out there that played the ’Field of Dreams’ game — ’If they build it they would come,’ ” said AT&T spokesman Dave Johnson. “We never played that game because our customers are already here.”