THE LIGHTWAVE BLOG

The Lightwave editorial staff uses The Lightwave Blog to share their thoughts on optical communications and whatever else might be the current topic of conversation from cubicle to cubicle. Feel free to add your own opinions. If you'd like to become a guest blogger, contact Editorial Director Stephen Hardy at stephenh@pennwell.com

Archive for '2009'

    Nortel: OIF 100G components yes, modules probably not

    December 22, 2009 2:14 PM by Stephen Hardy

    In an interview last week in the wake of Verizon's commercial deployment of Nortel's 100-Gbps technology, Metro Ethernet Networks group VP of R&D Dino DiPerna talked with me about what he expects out of the Optical Internetworking Forum's efforts to create a supplier eco-system around dual-polarization quadrature phase-shift keying (DP-QPSK) with coherent detection.

    His views won't warm the hearts of module vendors.

    Nortel is probably in the best position to reap immediate benefits from the OIF's efforts, since it now has a commercial system based on the format the OIF has adopted.

    “We use two subcarriers, but it’s exactly that modulation scheme and that coherent detection. Obviously the specifics of the DSP algorithms and that will vary between vendors I imagine down the road,” he said. “But I don’t see a big disconnect between where they’re going and where we already are.”

    DiPerna is therefore eager to see the results of the OIF's work, particularly in the area of electro-optic subcomponents -- detectors, polarization combiners, and coherent mixers were three areas he mentioned specifically. "We’ll have access to more components and get the cost down, etc., etc. As opposed to the first time, [when] we had to build it ourselves,” he explained.

    He wasn't quite as optimistic about getting help immediately at the module level because of what he termed the "serious hurdles" such vendors face in developing useful products quickly. The electronic parts of coherent detection, particularly the algorithms associated with cleaning up signals, represent one major example.

    Nortel's algorithms are "one of our critical secret sauces," he said. "What we’ve built into our CMOS custom chips is exactly that -- the digital coherent reception, the high-speed analog-to-digital and digital-to-analog [converters], and then all of those algorithms. So right now I still believe this is one of our critical differentiators," he continued. "So they would certainly have to show that they’ve taken it to the next step beyond what we have at this point. And certainly there’s no evidence of that yet.”

     

     

    Motorola plans XG-PON field trials

    December 18, 2009 4:05 PM by Stephen Hardy

    In the wake of Verizon's recent XG-PON field trial with Huawei, Motorola's director of global marketing and communications for Access Networks, Floyd Wagoner, says that his company also has field trials of 10-Gbps PON technology on tap.

    Wagoner expects the trials to take place in the first quarter of next year. While he wouldn't confirm that the trials will be with Verizon (rather, "one of the largest deployers in the world"), that seems a pretty safe bet. Motorola is one of Verizon's current GPON suppliers.

    Wagoner says that current worldwide interest in 10G PON technology -- including 10G EPON -- is pretty much of the tire-kicking variety. He placed the number of carriers with even that much interest at less than 10.

    He believes 10G PON won't reach wide deployment for another three or four years, due to a combination of lack of need and a fairly large price tag.

     

    Ciena overcomes NSN protest to win Nortel MEN court approval

    December 3, 2009 8:50 AM by Stephen Hardy

    The bankruptcy courts overseeing Nortel's breakup turned aside objections from Nokia Siemens Networks yesterday and approved the sale of the Nortel Metro Ethernet Networks (MEN) division to Ciena.

    Apparently, the promise of $810 million was 11 days late and about $20 million short.

    Both Nortel and Ciena announced the result early this morning. Ciena now has full court approval to purchase essentially all of the MEN optical and Ethernet assets for $530 million in cash and $239 million in convertible securities. Ciena expects the deal to close in the first quarter of calendar 2010. Ciena has been granted early termination of the antitrust waiting period under the Hart-Scott-Rodino Act as well as termination of the applicable waiting period under the Canadian Competition Act. It still needs to clear some regional regulatory hurdles as well as statutory information-sharing and consultation processes with employee representatives in EMEA, and court approvals in France and Israel.

    In the asset auction, held November 20-22, NSN actually bid $1 million more than Ciena's $769 million total. However, a provision in the stalking horse bid from Ciena called for the systems vendor to receive a $21 million breakup fee should the assets eventually go to anyone else. Thus, NSN's $770 million bid represented a net weaker offer by $20 million.

    However, after the admitting defeat in a press release early on the morning of November 23, NSN decided to raise an objection during yesterday's hearings to approve the auction's outcome that since so much of Ciena's bid was based on securities, which inherently carry risk, its true value was uncertain. The objection called for the bidding to be reopened -- and NSN promised as an incentive that it would submit an $810 million all-cash bid that would cover the $21 million breakup fee and more.

    Details of this aspect of the hearing remain sketchy, although Reuters reports that the courts ruled that NSN and its bidding partner, One Equity Partners, "did not have standing to object to Ciena's bid."

    In fact, Reuters' report implies, Ciena and Nortel may have had more trouble from a parallel objection filed by a Nortel creditor. Matlinpatterson Global Investors asked the courts to demand further information about the securities for reasons similar to NSN's. Reuters reports that after hours of negotiation, Ciena agreed to change the pricing on its convertible securities under certain conditions and Matlinpatterson withdrew its objection.

     

     

    NSN takes one more run at Nortel MEN

    December 2, 2009 5:33 PM by Stephen Hardy

    UPDATED Reuters is reporting that Nokia Siemens Networks plans to petition the courts overseeing the Nortel bankruptcy proceedings to reject Ciena's winning bid for the Metro Ethernet Networks (MEN) group when they hold joint hearings today. And it's willing to put up $810 million in cash to make it worth the courts' consideration, according to the news service.

    Ciena was declared the winner of the auction for most of the optical and Ethernet assets within MEN with a bid of $769 million -- $530 million in cash and $239 million in convertible notes. The auction began on November 20 and lasted until the night of November 22.

    Reuters quotes NSN spokeman Barry French as asserting the fact that Ciena's notes carry some risk put the true value of the winning bid in question.

    Reuters and other media outlets also say that NSN bid $770 million for Nortel's MEN assets, which gives the initial appearance that Nortel and its creditors left $1 million on the table. However, Nortel's stalking horse agreement with Ciena provides Ciena with a $21 million breakup fee should another party end up with MEN. Thus, NSN would have had to exceed any Ciena bid by at least that amount to offer a better deal. An $810 million bid would do the trick.

    The court hearings are expected to begin at 11 AM EST in Delaware. However, the MEN assets are not the only sale on the courts' docket. Nortel's sale of its GSM/GSR assets to Ericsson and Kapsch CarrierCom AG also will be reviewed. Therefore, the session may not end until well into this afternoon.

     

     

     

    Ciena wins Nortel MEN auction

    November 22, 2009 11:42 PM by Stephen Hardy

    Reuters is reporting that Ciena has emerged victorious in the auction for most of Nortel's Metro Ethernet Networks (MEN) optical and Ethernet assets. Ciena will pay $769 million for the assets -- well above the $521 million it originally bid.

    Nokia Siemens Networks issued a statement just after midnight this morning confirming that "it did not submit the highest bid for Nortel’s optical networking and carrier Ethernet assets."

    The company statement added, "Nokia Siemens Networks believes that its final offer represented fair value for the assets, and further bidding could not be financially justified."

    The auction process started Friday morning and lasted until Sunday.

    Reuters quotes an anonymous source as revealing that Ciena will surrender $530 million in cash and $239 million in convertible notes.

    This is the second portion of Nortel that Nokia Siemens Networks attempted to buy without success. The company paired with One Equity Partners, a private equity firm, in pursuit of the MEN assets. The NSN/One Equity Partners pairing apparently was the only competition Ciena faced in the bidding.

    More details here in a separate article.

     

    Nortel's MEN on the auction block today

    November 20, 2009 9:00 AM by Stephen Hardy

    The auction for most of the optical and Ethernet assets of Nortel's Metro Etherent Networks (MEN) division was slated to start right about now (10 AM EST). We'll keep you posted on the action as details leak, leading up to the announcement of the winner. Be patient -- depending upon how many bidders are involved and how many rounds are necessary, this could take a while.

    The only known bidder is Ciena, although both Reuters and Bloomberg have named Nokia Siemens Networks, partnered with private equity firm One Equity Partners as a competitor. That said, speculation remains that others may be involved.

    Nortel has cleared the decks for this event, pushing back the auction of its GSM/GSM-R assets, originally scheduled for today, to some unspecified date in the future.

    UPDATE 11/23 12:53 AM EST Reuters says Ciena wins!

    UPDATE 4:00 PM EST Nothin' but crickets chirping so far. Meanwhile, here are a few words about One Equity Partners, from the firm's website:

    One Equity Partners acts as a lead equity investor in management-led buyouts, and growth capital financing with a particular emphasis on corporate partnerships and divestitures. OEP typically invests $50 million to $200 million per transaction but historical investments have ranged from $3 million to over $500 million.

    The firm has made investments in the communications space previously, principally Genband.

     

    Ciena has competition for Nortel's MEN assets

    November 18, 2009 3:40 PM by Stephen Hardy

    Ciena is going to have to pay more if it wants Nortel's optical and Ethernet assets.

    Nortel has announced this Friday, November 20, 2009, as the auction date for the assets for which Ciena earlier bid approximately $521 million. That means at least one other qualified bidder was found yesterday.

    No word yet on who the competition is -- Nortel source says it's a private auction, so their lips are sealed. Naturally, I'll keep digging. Meanwhile, care to make any guesses?

    UPDATE 11/19 11:00 AM EST Reuters is reporting that Nokia Siemens Networks paired with private equity firm One Equity Partners to submit a qualified bid. One Equity manages $8 billion for JPMorgan -- which is a lot of fire power for Ciena to overcome. Ciena's stock rose $0.40 to $14 in after-hours trading yesterday when it became clear that someone else might buy MEN. It will be interesting to see how NSN fairs today.

    UPDATE 11/19 9:41 AM EST Paul Bonenfant of Morgan Keegan issued a note on Opnext in light of a "reported NSN bid for Nortel optical business." He doesn't see a Nokia Siemens Networks acquistion of MEN as a positive for Opnext, since an outside supplier of 40G and 100G technology would no longer be necessary.

    Meanwhile, I'm in touch with Nortel media relations to find out just how this auction process works. Not surprisingly, the judge doesn't stand up with his/her gavel and start yodeling. In fact, the judge isn't involved at all in the actual bidding process. Apparently, ground rules are first set, then Nortel and the attending creditors identify the initial high bid. The other potential bidders decide how they want to respond. New bids are then assessed by Nortel and the creditors. Other rounds ensue as necessary. My media relations contact said that one of the previous auctions required six rounds "and that took all day." The judge gets involved a few days later at a hearing to approve the winning bid.

     

    Nortel MEN bid due date nears end

    November 17, 2009 4:36 PM by Stephen Hardy

    Today's the deadline for parties interested in pulling Nortel's MEN optical and Ethernet assets out from under Ciena. Nortel had extended the bid deadline last week.

    A Nortel source says that an auction for the assets would likely follow a few days from now "if there are other bidders." Ciena has submitted a stalking horse bid of approximately $521 million that will win the assets if no other bidders materialize.

    The company will likely issue an update tomorrow, November 18.

    UPDATE: 11:25 AM EST, November 18: "Short release" in works, says Nortel source.

    UPDATE: 2:55 PM EST Still nothing. Perhaps they're waiting for the market to close.

    UPDATE: 4:45 PM EST The auction is on for this Friday!

    SCTE Cable-Tec Reporter's Notebook, Day 3

    October 30, 2009 10:15 AM by Stephen Hardy

    10/30 11:15 AM: Wait -- what's that thing up in the sky? Is that the sun?

    Another new-to-me company here is InnoTrans Communications, which specializes in 1550-nm transmitters. its Chromadigm product can support a wide variety of cable architectures, from HFC cable deep to RFoG and PON. The product has seen application for node splitting and fiber reclamation via WDM (it can be configured for WDM support of 4 to 16 wavelengths), as well as upgrades from 1310 nm. The company's most recently announced customer is Cox Communications Northern Virginia for a 1-GHz optical transport upgrade project.

    NEC is also here in an attempt to get a foothold in the MSO space. Rich Moran says the company is leveraging its relationship with Transmode (which is also here at the show) to offer the Scandinavian company's WDM systems as well as its own packet transport platforms, particularly the recently announced MN Series. Large MSOs like to deal with large systems suppliers, Moran says, and that's where NEC comes in, particularly for equipment that supports business services delivery and wireless backhaul.

    SCTE Cable-Tec Reporter's Notebook, Day 2

    October 29, 2009 1:21 PM by Stephen Hardy

    10/29 12:30 PM: The snow is still coming down...

    In a workshop session this morning, Mark Pelligri, manager, transport networks, at Cox, provided an overview of Lambda Zone, a proposed method of accommodating multiple business services over the same fiber-based collection ring. Lambda Zone would see passive OADM filters placed on the collection ring, from which optical access rings would deliver services to customers. Cox hopes to trial the technique in the first quarter of next year. More details to come.

    ZTE USA through its hat in the DOCSIS PON ring this morning. The ZXA10 DOCSIS Mediation Server enables the company's existing EPON OLT to integrate with an MSOs DOCSIS management structure.

    Oplink is at SCTE Cable-Tec for the first time, hoping to raise its profile among manufacturers and their customers in the MSO market. Among other things, the company is showing off a liquid-crystal-based 1x2 WSS, pluggable VOAs in SFP format, a wide range of XFP and SFP+ modules for 10-Gbps applications, as well as SFP BiDis and other modules for EPON applications. Oplink is also showing off WDM subsystems for prospective ODM/OEM customers.

    Alcatel-Lucent is showing off routers, but not its GPON gear. GPON and MSOs are a bad mix, a source at the booth told me.

    4:35 PM: Cisco is showing off its D-PON technology in a corner of its booth. (See the video "Intro to DOCSIS PON" on our the Lightwave Channel's MSO Optics page for an introduction to Cisco's approach.) James Brannan, market manager, transport and access networks, told me that the company has changed its original plans for a standalone 3RU unit in the hub to a modular approach that sees transmitter and amplifier modules that fit into the Prisma II platform. Brannan said the corresponding ONT is a real differentiator; the "RFoG plus" capabilties include a proprietary FM scheme that gives the MSO the option of greater reach or more bandwidth. He says Cisco has customers for its D-PON technology in Europe and the U.S. (including Hawaii).

    Auxora's President and CEO Xin Zhang says his company is seeing success in the MSO space thanks to extended-temperature-range WDM products, which can be deployed in the outside plant.

    One of the good things about coming to shows is finding new (to me) companies. For example, Zycko is a Minnesota-based distributor of optical communications products. However, it has its own line of optical transceivers, branded as ProLabs. The line extends from 1 to 10 Gbps in the standard form factors. A source at the booth said that they think they can provide better quality control and customization when necessary through their own module line...Electroline is a Montreal-based company that's been in the RF business since the 1950s, but is now moving into the optical realm. The company recently was purchased by an investor group that includes Applied Optoelectronics. (The two companies bumped into each other when they used the same Chinese manufacturing facility.) The company's newest product is the very high density ELink Optical Transmission Platform, which can accommodate a wide range of optical services, including RFoG. The company has a companion RFoG micronode that can support PON overlay. Other items include a mini-node for MDU applications and a standalone transmitter unit....QAMnet also has a full fiber-optic line for MSOs. The line includes a variety of amplifiers and transmitters for HFC, FTTH, and RFoG applications. A lot of their work is custom, and their customers include several well-known government and academic research organizations.

    Pacific Broadband Networks (PBN) is attempting to mimic its Asian success in optical platforms for MSOs around the world. CTO Peter Saglietti reports the company is active in HFC, RFoG, and FTTH, with the modules that fit within the OCMR optical communications mainframe the cornerstone of PBNs optical approach. The OCMR modules provide support for HFC, 2.5G EPON, and Active Ethernet. The company also offers space-saving RFoG OSP nodes as well as micronodes (it has an OEM relationship with Hitachi for the latter). Saglietti says the company has at least 10 million deployments of its platforms and asserts the company is the #1 supplier in China -- as well as the lead supplier to Telstra. Customers can also be found in Taiwan, Korea, Europe, and the U.S.

     

    SCTE: Phooey on FiOS

    October 28, 2009 2:40 PM by Stephen Hardy

    10/28 12:30 PM: Welcome to Denver, where the snow is piling up to the point where locals are having a tough time attending SCTE Cable-Tec without the aid of sled dogs. I'm opening up the reporter's notebook again this week, so check back for updates.

    The title of this morning's Technology Leadership Roundtable was "Enough Already!" "Enough of what?" you ask. Answers the roundtable description: "Growing a little weary of all that FiOS in your face?" The short answer, not surprisingly, is yes. Roundtable moderator Leslie Ellis (Ellis Edits LLC) opened the discussion by asking whether the cable-TV community should be defensive about the fact that it hasn't fully embraced FTTH -- particularly since the industry invented video over fiber and carries more video over fiber than anyone else.

    Much pooh-poohing of FTTH and telcos ensued. Paul Liao, president and CEO of CableLabs, said that the MSOs are the big dogs when it comes to video and becoming big dogs in voice delivery -- and when you're a big dog, you're going to attract competitive attention.

    Dermot O'Carroll, SVP, engineering and network operations, at Rogers Cable Communications up in Canada, asserted that fiber "doesn't do much" for voice or video (I assume he meant fiber access versus HFC) and perhaps only a little bit when it comes to Internet access. This last shortfall should go away with deployment of DOCSIS 3.0, he said.

    Liao agreed that DOCSIS 3.0-enabled HFC should prove more than adequate for customer needs today and into the future, adding that DOCSIS 3.0 should enable more bandwidth than anyone will ever need. (This sounds like one of those "eat your words in 10 years or less" statements, but Liao is certainly smarter than I am and more versed in DOCSIS 3.0 capabilities.)

    Meanwhile, at least two workshops later in the week will discuss how to migrate HFC networks to FTTH. It doesn't hurt to hedge your bets, apparently. Getting a better understanding of how MSOs really feel about FTTH is one of my goals here.

    Other nuggets from the roundtable: Migration to IPv6 will be a bear, particularly since you'll still need to support IPv4 for a while and hopefully find a way for customers with older IPv4-only devices to access new IPv6-enabled services. IP in general (including, of course, IPTV) will be the key to enabling "anything to any device" services. And as cablecos offer such services, they'll have to shift their focus from marketing to households to marketing to individuals.

    7:15 PM: Back here at the hotel after exhibits closed. The show floor was significantly busier than last week's Supercomm event. Opinions in the exhibit hall regarding how much of a market for FTTH MSOs represent were all over the map. (This will either be a standalone story or I'll run through them Friday once I talk to more people.) Meanwhile...Stefan Murry, VP, global sales and marketing, at Applied Optoelectronics reports a trend away from transceiver-based ONT designs for GPON toward designs based on discrete components. There's not enough volume in GPON to generate savings from mass deployment, so ONT designers are coming up with proprietary designs to extract costs.

    Hitachi is showing off three new ONUs for the company's DOCSIS PON offering, which carries the Salira label. (See the video interview from the recent FTTH Conference entitled "DOCSIS-based FTTH Options" for the company's take on the market.) The ONUs and the rest of the DePON gear leverages "multi-wavelength" (four of them, to be precise), which company sources have repeatedly emphasized isn't the same as WDM-PON. The company also has an SFP-based ONU (developed by Broadway) for enterprise applications...Motorola fresh off of announcing a customer for its RFoG gear (see -- someone is buying this stuff!) and expansion of its CablePON and fiber deep portfolios, also displayed an EPON ONU from Alloptic, with whom the company has a relationship. Moto's Floyd Wagoner suggested that MSOs are starting to show a preference for EPON over the GPON Motorola currently offers, and the company wants to be part of those conversations -- although a companion EPON blade for Motorola's OLT doesn't yet have a firm place on the company's product roadmap...Aurora Networks also announced expansion of a product line that already spans HFC, fiber deep, RFoG, and RFPON (the last an RFoG/EPON hybrid; see "RFoG plus PON – Enabling cable’s ‘all-IP’ future?"). VP of Marketing John Dahlquist says Aurora has more than 50 customers using fiber deep gear at about 30 using RFoG, with significant overlap among those two customer lists.

    Finally, Corning Cable Systems showed off new All-Fiber Access Network segmented-split OSP gear designed to mimic their HFC counterparts. The complete offering includs the FlexNAP technology Corning is already offering to telcos for FTTH.

    A few notes from Supercomm

    October 23, 2009 11:42 AM by Stephen Hardy

    Wednesday the traffic was okay; Thursday it wasn't as good. Now, on Friday, it's a ghost town, with exhibitors itching to tear their booths down because the unions don't work on the weekend and they need to be out by the end of the day. Welcome to Supercomm 2009!

    Major optically related themes here at the show are mobile backhaul (synchronization capabilities based on 1588v2 and Synchronous Ethernet -- both providing them and testing them -- are big), service management, and packet optical transport. A fair amount of discussion about 100G, particularly when it might be deployed in more than one link. Estimates range from 2011 to years afterward.

    For you numbers junkies, Cisco issued some interesting statistics via its Visual Networking Index Usage study. They estimate that the average broadband connection generates 11.4 Gbytes of Internet traffic a month. They see overall broadband Internet usage climbing 5X between 2008 and 2013. However, they say carriers will have to engineer their networks to handle 7X for peak usage, which generally occurs between 9 PM and 1 AM.

    Ciena updates MEN shopping list

    October 20, 2009 11:17 AM by Stephen Hardy

    On October 8, I reported on a conversation I had with John Marson, vice president of industry and strategic marketing at Ciena, regarding what his company wouldn't be buying as part of its proposed deal to acquire Nortel's optical and metro Ethernet assets. If you read the article, you'll recall that Marson wasn't entirely sure what Nortel products were on his company's shopping list.

    I recently received an email from Marty Querzoli of the Davies Murphy Group, which does PR for Ciena. Marty provided clarification of some of Marson's comments. According to Marty, Ciena indeed doesn't hope to acquire the Ethernet Access Service Terminal, the WDM-PON platform that's part of the LG-Nortel joint venture. The company does want Nortel's Optical Multiservice Edge 1000 family, as well as the HDX crossconnect family.

    Of course, wanting the products and actually acquiring them will be more complicated than your average M&A activity, thanks to Nortel's bankruptcy. Ciena's $521 million offering merely serves as the opening bid for an auction of the assets, which is scheduled to begin November 13 at 9:30 AM ET. The deadline for initial submission of qualified bids is November 9 at 4:00 PM ET. The US and Canadian court hearing to approve the successful bid is slated to follow November 19 at 1:00 PM ET.

     

    Congratulations to fiber pioneer on Nobel nod

    October 7, 2009 10:33 AM by Stephen Hardy

    As you may have read recently, Charles K. Kao, one of the pioneers of optical fiber, received the Nobel Prize in Physics. (He's actually sharing the prize with two Bell Labs researchers for their work developing CCD sensors, but let's not quibble.) Not surprisingly, Kao was recognized "for groundbreaking achievements concerning the transmission of light in fibers for optical communication."

    The Nobel committee described Kao's work as follows:

    "In 1966, Charles K. Kao made a discovery that led to a breakthrough in fiber optics. He carefully calculated how to transmit light over long distances via optical glass fibers. With a fiber of purest glass it would be possible to transmit light signals over 100 kilometers, compared to only 20 meters for the fibers available in the 1960s. Kao's enthusiasm inspired other researchers to share his vision of the future potential of fiber optics. The first ultrapure fiber was successfully fabricated just four years later, in 1970."

    The Nobel Prize is but the latest recognition of Kao's work; the list includes the Draper Award from the National Academy of Engineering in 2000. Based on the email I've received since the award was announced, Kao's achievement has cast a reflective glow across the entire optical communications community.

    Congratulations to Dr. Kao -- and to fiber optics in general.

     

    A few notes from the FTTH Conference

    October 5, 2009 10:04 AM by Stephen Hardy

    I'm reviewing my notebook from last week's FTTH Conference, and here are some of the tidbits that haven't already appeared on the site...For all the talk about how many broadband stimulus proposals were filed, several carriers at the show who might have filed decided not to because of "too many strings" attached to the potential funding...DSM Desotech beat the drum loudly for the microbend standard they're attempting to put together with Telcordia. You'll see a video interview about it on our site in the near future...Telco Systems touted video surveillance as a service supported by the company's Active Ethernet approach. Telco Systems acquired the service technology when it bought Vigilant Technologies. City security services are a big pull, I'm told...Not surprisingly, bend-insensitive fiber cabling for MDU applications remained a point of emphasis across the show floor. Corning showed off its Rapid Pass drop cables, OFS crowed about its selection for Verizon applications, and Draka highlighted its new 300-lb drop cable...OFS, meanwhile, is urging the ITU to come up with a C version of G.657 for "ultra" bend-insensitve fiber...LG-Nortel showed off 3D TV as a bandwidth driver for its WDM-PON gear...Sumitomo Electric Lightwave says it has a big-name customer for its indoor/outdoor ribbon drop cable...Gustavo Welkner, CTO at Chilean carrier GTD Manquehue, SA, estimated that there are 450,000 homes passed by FTTH technology in Latin America; 80% of these are in Brazil. His company is doing its part with a deployment in Santiago, Chile...

    Rural telco offers clever parry to incumbent pricing scheme

    September 30, 2009 9:06 AM by Stephen Hardy

    War stories of the competition between upstart rural or municipal FTTH service providers and the local incumbent MSO or telco are staples of the FTTH Conference. This year's event in Houston, wrapping up today, is no exception. I heard one such story yesterday that was fairly amusing.

    EATEL is a small carrier in Louisiana that, like the Lafayette Utilities System in nearby Lafayette, was attempting to get its FTTH-based services off the ground in the face of competition from Cox.  As commonly happens, Cox aggressively dropped its service prices in EATEL's territory to hold onto its customers. However, the MSO's marketing strategy made it subject to a state regulation that the price structure had to be honored elsewhere in its footprint, which included not only Lafayette but also Baton Rouge.

    So EATEL took out ads in Lafayette newspapers and on radio stations (and had sympathetic bloggers spread the word as well) to alert the citizens of Lafayette that Cox was selling communications services in EATEL's territory for a much lower price than was being offered in Lafayette -- but if they called Cox and cited the state regulation, they could get that same bargain price.

    Needless to say, Cox wasn't pleased -- particularly with the implication that EATEL would undoubtedly be willing to do the same thing in Baton Rouge.

    Cox didn't raise its prices (it changed its approach to remove the obligation to offer the low prices outside of EATEL's territory) but, according to EATEL's president, it "got their attention" and "took some of the pressure off." Sometimes tweaking the tiger's tail is victory enough.

    ECOC Reporter's Notebook -- Day 3

    September 23, 2009 2:36 AM by Stephen Hardy

    [8:36 AM CET] Sitting in the press room before the final day of the show begins, saying last rites for my cell phone and watch batteries, both of which are about to die. Should make keeping appointments an interesting challenge. Meanwhile, here are a few stray notes from yesterday I didn't have a chance to cover...Opnext is showing off a prototype 100G CFP for LR4. They're also highlighting a 40G DQPSK module in 300-pin format and an SFF VSR module. The DQPSK module has begun shipping to customers and complements the continuously optimized DPSK technology introduced at OFC. The latter is good for applications involving lots of ROADMs, the former for links where fiber impairments are the primary impediment to reach...Along with MergeOptics (see the Day 1 blog) and Yenista (whom I neglected to mention in yesterday's test roundup) Proximion is another European company claiming to be going great guns despite the economy. The company is doing well with its tunable optical dispersion compensators for 40G, and is showing off a  compensator in a patch cord format introduced in June. The company's fiber grating expertise enables the design... 3S Photonics of France (ex-Alcatel Optronics, ex-Avanex) is highlighting its pump lasers, including a new, uncooled device for submarine applications, as well as laser technology for OFDM...Sumitomo Electric Device Innovations is quietly touting a tunable XFP-E which company sources say should beging sampling the fourth quarter of this year. Meanwhile, a 40GbE CFP module will sample in Q2 2010 and a 100GbE version the folowing quarter, if current plans hold...

    [8:00 PM CET] The exhibition and the poster sessions are over, but this blog isn't...The 100G test conversations continued today.  Daniel van der Weide, vice president of engineering at Optametra, asked to meet me to make the case for the real-time approaches on which his company's offering (as well as Agilent's) is based, versus the EXFO approach he had seen highlighted in this blog yesterday. van der Weide suggested that people who are evaluating 100G test platforms should look closely at bandwidth claims and focus on informational bandwidth. He said that real-time approaches can more closely follow what's going on in a signal, since it's tracking all the bits, as opposed to analyzing optical samples. Among the benefits of the real-time approach is a greater capability to provide accuragte BER measurements, he asserted. You can bet we'll here more about this in the near future...van der Weide also expressed the hope that oscilloscope manufacturers would increase the bandwidth of their systems...Meanwhile, Aragon Photonics of Spain is also taking an optical approach to 100G and related testing. However, their approach leverages stimulated Brillouin scattering...Synthesys Research demonstrated brand new (as in "We just finished this box before we got on the plane to Vienna") capabilities to do stressed eye testing at 28.7812 Gbps, plus other capabilities for 100GbE requirements. The demonstration occurred in EXFO's booth, as the companies' equipment complements each other. Official announcement of the new capabilties (and, perhaps, details of the relationship with EXFO?) should occur around OFC next March...I neglected to mention yesterday that JDSU displayed its full range of 100GbE test gear as well.

    On the transceiver front, Finisar has joined the CFP party, with a demonstration of a prototype 40G LR4. It also touted the capabilities of its Edge Wavelength Processor, a 1x2 WSS based on the company's liquid crystal on silicon technology...Gigalight of China has a range of 10G ZR (80 km) transceivers that should be available over the next two months. These include XENPAK, X2, and DWDM XFP. A company source asserted that Gigalight is one of the few Chinese module vendors with its own SFP+; the company hopes to offer an ER module in this form factor next year.

     Inphi touted its differential 2811DZ 40G DQPSK modulator drivers in surface-mount packages. The company has demostrated interoperability of these devices with the SMT versions of Sierra Monolithics' 40G mux/demux devices. Loi Nguyen, vice president of broadband analog products for Inphi, expressed a sense of vindication that the company pursued DQPSK when many others were betting on DPSK for 40G. He said that the extremely small package sizes of the drivers might obviate the need for quad chips, at least from an economic perspective...Narda, meanwhile, touted its modulator drivers for 40G VSR, ODB, DPSK, and DQPSK drivers in GPPO packages. A source at the booth confirmed the obvious sense of playing in the 100G market.

    And speaking of 100G, sources at the Discovery Semiconductor booth reported the company is making good progress on shrinking its KittyHawk coherent transmitter/receiver technology into something smaller than a rack unit. The hope, the sources said, is to come up with a line card that might be of interest to systems companies. Meanwhile, the company spread the word about its new 100GbE (4x25G) quad PIN-TIA optical receiver for LR and ER applications.

    ECOC Reporter's Notebook -- Day 2

    September 22, 2009 6:41 AM by Stephen Hardy

    [12:45 PM CET] First, some leftovers from yesterday. JDSU European Director Sales Sinclair Vass expanded on the company's tunability announcement by saying that the company will sell the ITLA and even the TOSA that enable their tunable XFP, but only to "select people" -- mostly those that would use them in non-telecom applications. The tunable XFP is aimed first at replacing fixed-wavelength XFPs, with unseating 300-pin transceivers next. A tunable SFP remains in the works. Sinclair also offered his opinions on coherent technology at 40G as well as the company's strategy for coming up with the coverter, DSP, and algorithms for coherent detection, which I hope to include in a separate story on 100G strategies (so stay tuned)...Speaking this morning, Javed Patel, CEO of Sierra Monolithics, is confident in his company's competitive position at 100G. When it comes to the receiver electronics, he sees two camps -- all CMOS (such as Fujitsu Microelectronics Europe is pursuing) and SiGe for the front end and CMOS for the rest, which is what his company is doing in its partnership with IBM. He expects to be working mainly with systems companies rather than transceiver vendors because the first generation of coherent receivers will by ASIC based -- and the ASICs will come from the systems houses....

     [3:35 PM CET] And now, a round up of what's new here in test. The major thrust, not surprisingly, is in 40G/100G test capabilities. Agilent has expanded the capabilities of its optical modulation analyzer by including BER functionality. The feature is designed to complement other BER measurements to enable users to not only detect the fact that errors occur, but what part of the system is causing them...EXFO, meanwhile, is leveraging its Picosolve acquisition to offer its own optical modulation analyzer as competition. Peter Andrekson, who joined EXFO upon the acquistion and heads the company's activities in its Swedish facilities (as well as teaching at the Chalmers University of Technology), touts the fact that the PSO-200 is based on an all-optical sampling system (versus the real-time, electrically based approaches of companies like Agilent and Optametra). Among other benefits, the all-optical approach enables the testing of higher-speed and/or more complex modulation approaches. So, for example, the instrument is already able to handle 400-Gbps DQPSK as well as 16QAM...Anritsu is demonstrating that it has increased the performance of its MP1800A Signal Quality Analyzer Series. The unit now offers signal generation and analysis up to 56 Gbps. Mux/demux options enable testing of 100G applications as well...In other test applications, mdi says that Optus, SingTel's division in Australia, has decided to deploy the company's eyeD 360 network monitor. The company has also developed a version of the eyeD for lab applications...Luna Technologies is showing off its OVA 5000 Optical Vector Analyzer, introduced earlier this month

     

     

    ECOC Reporter's Notebook -- Day 1

    September 21, 2009 9:28 AM by Stephen Hardy

    The Reporter's Notebook returns, this time for ECOC in Vienna. Check back regularly, as I'll be adding to the notebook as the day progresses. (Twitter? Who needs Twitter?)

    [3:30 PM CET] Skipped opening address by George Gilder, based on first experience hearing him speak at this year's Executive Forum. Apparently, he is a true oracle -- because, without a high priestess to interpret his pronouncements, I couldn't follow what he was saying. Went to exhibit floor instead, where 85% of the vendors were still setting up their booths...u2t had its act together, which featured an integrated 43G DPSK receiver demo with two devices, from Kylia and Optoplex, respectively. u2t supplies the amplifier, photodiode, and related technology, and their opto customers add the delay line interferometer, etc. A lot of this work ends up being custom, they tell me; they have several such projects underway. Meanwhile, they're looking at integrated 40G DQPSK receivers, since the technology requirement is doubled. While a fully integrated receiver would be ideal, they may offer integrated versions of the two main parts as an initial, interim step. Oh -- and then there's the MSA-compliant 100G receiver prototype...Molex featured a connector with an integrated SFP, a relatively old offering that may find applications in LTE equipment. The arrangement removes the SFP cage from the PCB, enabling space savings as well as more flexibility in terms of where the interface can be located. The company also is finding success with its I-Pass connector technology. Standardized by the InfiniBand community, the I-Pass also shows promise for CXP applications, the source at the stand believes. He added that he sees the CXP significantly eating into the market for QSFP devices....Speaking of parallel interfaces, MergeOptics is going into parallel applications in a big way, particularly active optical cables (AOCs). These include 120G cables using both CXPs (featuring the I-Pass technology) and QSFPs. Company CEO Dag Neumeuer says that business is up 30% to 40% from last year, due primarily to the AOCs. Neumeuer sees QSFPs eroding demand for SFP+ devices (apparently before QSFPs give way to CXPs, if you follow Molex's thinking). MergeOptics has parallel products for the consumer space on the drawing board as well, Neumeuer hinted...JGR Services was showing off a pair of custom-built products they hope have wider appeal. They built the Functional Modular Platform, an eight-slot modular test platform, for Alcatel-Lucent for systems test. Meanwhile, they built a field-level backreflection measurement platform with 72 ports for AT&T...

    [5:00 PM CET] Exhbition closing down. After slow start, attendance picked up dramatically this afternoon...RED-C Networks reports increasing interest in hybrid Raman/EDFA amplifiers with uptick in 40G deployments. Raman acts as a pre-amp, the EDFA as a booster...CoreOptics offering 40G SerDes so that Sierra Monolithics finally has some competition. Also debuted second-generation 40G VSR transponder. But the major source of conversation was the use of coherent detection for 40G applications. More on this to come separately...NeoPhotonics showing off coherent mixer (shipping for 40G applications but applicable to 100G) and second-gen DQPSK demodulator. By reducing birefringence problems with their PLC-based approach, they feel the new DQPSK demodulator equals the performance of free-space-based demodulators and outshine them in all other aspects. Meanwhile, they acknowledge that customers will want to see detectors and TIAs integrated into the mixer, and they're working on it...ADVA Optical Networking's 100G priorities, according to CTO Christoph Glingener, in descending order of importance (but increasing order of cost): four wavelengths of 28G, their DPSK-3ASK modulation format, and the OIF's 2Pol-QPSK with coherent detection. It's the cost aspect that has set these priorities, he says. Meanwhile, he says the company's push into WDM-PON has netted three trials so far. He notes that their implementation of WDM-PON technology, which is targeted at metro apps such as wireless backhaul, can be ring-based as well as tree or point-to-point. The company is pondering offering a residential version in the next few years. Finally, he also see ADVA targeting cloud computing applications via its FSP 3000...

     

    What do you know -- IPOs!

    August 21, 2009 11:00 AM by Stephen Hardy

    Here's something you probably didn't think you'd see again anytime soon: a pair of successful IPOs in the optical communications space.

    Avago Technologies started the ball rolling earlier this month when it offered 43,200,000 ordinary shares on NASDAQ at a public price of $15.00 per share. (Underwriters purchased an additional 6,480,000 ordinary shares from selling shareholders via the underwriters' over-allotment option.) The shares, under the listing AVGO, are trading at $17.78 as I write this at about 2:15 EDT.

    Meanwhile, on the other side of the world, Accelink launched its IPO today on the Shenzhen Stock Exchange. The initial asking price for the shares, trading under the number SZSE 002281, was approximately $2.34. However, online sources suggest it opened at $3.95 a share and closed at approximately $4.36.

    Not bad for an industry that's supposed to be hurting, eh? While one can point to the last round of optical IPOs and assert that early exuberance will quickly fade, I still think it's encouraging that the offerings even took place, never mind that the stocks are trading above the initial asking price.

    Ron Martin redux

    August 5, 2009 9:40 AM by Stephen Hardy
    Posted by Stephen Hardy

    UPDATE: So having belatedly blogged about Ron Martin's departure from ADVA Optical Networking Wednesday, it comes to light Thursday that he has a new job: vice president for worldwide sales at Infinera. (Scott Chandler and Howard Lukens remain at the Digital Optical Networking company.) As always, timing is everything in the media business...

    Here's the Wednesday post:

    In the midst of announcing the results for the second quarter of 2009, ADVA Optical Networking also revealed that Ron Martin, who had joined the company in November 2007 as chief marketing and strategy officer with a focus on expanding ADVA Optical Networking's North American customer base, left the company at the end of June. Brian Protiva, company CEO, positioned the departure as a cost-cutting move arrived at "by mutual agreement."

    Here's an interview I did with Martin at last year's NXTcomm in which he explained what he hoped to achieve.

    NSN: How to take down Cisco

    July 22, 2009 1:38 PM by Stephen Hardy
    Posted by Stephen Hardy

    Today's news of Juniper's OEM agreement with IBM puts me in mind of the switch/router vendor's link with Nokia Siemens Networks (NSN) for an integrated approach to IP over DWDM -- a concept practically owned by Cisco .

    I spoke earlier this month to Pathmal Gunawardana, director of business development at NSN, who explained why the combination of NSN and Juniper could beat Cisco at its own telco network game. While he declined to make a feature-to-feature comparison of Juniper's boxes with Cisco's, he was much more willing to suggest that NSN provided the stronger DWDM portfolio.

    Specifically, said Gunawardana:

    • NSN has a broader, more scalable DWDM offering. While Cisco's gear is principally targeted at the metro, in Gunawardana's view, NSN can offer metro, long-haul, and ultra-long haul platforms, he said.
    • Since NSN was the market leader in 40-Gbps sales in 2008, the company would be better able than Cisco to leverage volume to create a cost-effective 40-Gbps interface -- not to mention a future 100-Gbps interface.

    Speaking of these interfaces, Gunawardana said that the 40-Gbps interface would likely leverage the company's current DPSK offerings, at least initially. The company has targeted what he called "CP-QPSK" -- for "coherent polarized QPSK" -- as the technology of choice for the 100-Gbps interface. CP-QPSK will be similar, if not identical, to the dual-polarization QPSK with coherent detection the OIF is currently working on. Once perfected, the technology would likely be used for 40 Gbps as well, he predicted.

    Gunawardana said that both interfaces should be available within the next 18-24 months, although he hinted that the 40-Gbps capability would likely appear in the early part of that window and the 100-Gbps technology toward the end. Since the interface will be integrated into the Juniper hardware, Gunawardana conceded that it could be used with DWDM equipment not from NSN. However, such a pairing would likely fall short of the performance a Juniper/NSN combination would provide, he asserted.

    Commerce waives broadband 'Buy American' provision

    June 30, 2009 10:23 AM by Stephen Hardy
    Posted by Stephen Hardy

    The Secretary of Commerce on June 19 granted a limited waiver of the American Recovery and Reinvestment Act's "Buy American" provision to most of the broadband equipment that would likely be purchased under the Broadband Technology Opportunities Program (BTOP). The sigh of relief coming from potential BTOP applicants -- not to mention their potential suppliers -- could almost be heard in every corner of the United States (and a few places outside of the country as well).

    The BTOP represents the lion's share of the money set aside for telecommunications projects under the Obama Administration's economic stimulus program. ($4.7 billion; the Department of Agriculture's Rural Utilities Service will oversee the dispersal of an additional $2.5 billion.) The "Buy American" provision in the Recovery Act states that no funds, including those earmarked for the BTOP, "may be used for a project for the construction, alteration, maintenance, or repair of a public building or public work unless all of the iron, steel, and manufactured goods used in the project are produced in the United States." Fortunately, the act also provides the head of a federal department or agency with the authority to waive this provision for any of three reasons, including a determination that applying the "Buy American" criterion would be against the public interest.

    That's exactly what the Department of Commerce decided. I'd make the case for why this action was necessary, but I don't have to -- the Department has done it for me within its waiver notice (which you can find here ). The provision would put an unreasonable burden on potential applicants to prove that the hardware required to build its network was made from materials from U.S. sources, the Department concluded. There are several reasons for this, according to the notice:

    1) Much of the equipment used to manage and operate broadband networks is manufactured outside of the United States, using complicated and constantly varying supply chains.
    2) The waiver will facilitate the roll out of modern broadband networks incorporating the latest technology, which is a large part of the BTOP's purpose.
    3) As such networks are built and operated, jobs will be created.
    4) While the Office of Management and Budget "has clarified which countries would be exempt rom the Buy American provision, some of the key countries that produce broadband equipment would not be exempt."
    5) The broadband industry is "very dynamic and global" according to the notice, and therefore the equipment used in a project can change in the midst of network rollout.

    The waiver covers broadband switching equipment, routing equipment, transport equipment, access equipment, CPE and end-user devices, and billing/operations systems. It does not cover fiber and cable, the notice emphasizes. However, applicants can apply for a special waiver as part of their applications should they feel it necessary.

    It's gratifying that the Department of Commerce has shown some common sense in determing how best to meet the twin goals of aiding U.S. businesses and bringing broadband capabilties to currently underserved areas of the country. Now if we could just get the application process rolling...

    Verizon expects 100G by end of year

    June 22, 2009 9:56 AM by Stephen Hardy
    Posted by Stephen Hardy

    Speaking to a group of media and analysts after last Friday's OIF interoperability demo at Verizon's Waltham, MA, facility, the carrier's vice president of network architecture, Stuart Elby, said he expects that at least one of his current vendors, and perhaps as many as three, will deliver tenable 100-Gbps networking platforms by the end of this year. He added that he expects the platforms will be based on technology "like" the dual-polarized QPSK with coherent detection around which the OIF has rallied the industry (including Verizon), saying he believes the platforms will be "as close to that as exists" at the time.

    Elby also said he expects that Verizon will deploy some of the equipment it receives, but not in large numbers. As was the case with 40G, he expects the first generation of 100G platforms will be extremely expensive, and greater deployment will wait until further iterations of the technology reduce 100G's price tag. He said he had doubts that 40G prices would ever reach a level 2.5 times that of 10G, partly because the price of 10G technology continues to shrink. He said that 100G might enjoy a more aggressive downward cost run than 40G, due to greater deployment in data center environments.

    AT&T mum on potential procurement strategy changes

    June 11, 2009 3:54 PM by Stephen Hardy
    Posted by Stephen Hardy

    AT&T's response to inquiries regarding Morgan Keegan & Co.'s note yesterday regarding a plan to reduce its supplier count to two for each of about 14 technology domains: "We have no comment on this."

    Simon Leopold, communications equipment analyst and managing director at the broker-dealer, issued a note yesterday saying he was starting to take seriously information he had received regarding a potential AT&T plan to drastically reduce the number of equipment vendors with which the company does business. The goal, based on what Leopold said he had heard, was to have only two supplier in each of "roughly" 14 technology domains. (Leopold did not list the domains in the note.) Naturally, it seems likely that AT&T would end up with fewer than 28 suppliers, on the assumption that some suppliers would remain viable in multiple domains.

    The initiative has three goals, according to the note: cost savings, risk reduction (particularly in the face of Nortel's bankruptcy filing), and streamlining of major projects. AT&T's success with Alcatel-Lucent on the U-Verse roll out served as a proof point of this last element, Leopold suggests.

    While Leopold asserts, "[w]e consider it premature to panic," this news, if true, clearly would make systems suppliers nervous -- particularly smaller ones whose narrower product lines would potentially lessen their opportunities to stay engaged.

    As I've indicated above, AT&T isn't shedding light on Leopold's report. (The quote above came courtesy of Jenny Bridges, who handles trade media inquiries at the carrier.) If anyone has any further info, I'm all ears.

    Ciena: Things may look better -- but aren't yet

    June 4, 2009 12:13 PM by Stephen Hardy
    Posted by Stephen Hardy

    Ciena announced unaudited results for fiscal second quarter 2009 today. Not surprisingly, the company reported down revenue; what was perhaps unexpected was a whopping GAAP net loss of $503.2 million, most of which was a non-cash charge of $455.7 million for impairment of goodwill.

    The magnitude of the loss may have obscured the somewhat hopeful note of the commentary:

    "Our fiscal second quarter was particularly challenging, reflecting the difficult macro and industry environment and continued delays in customer spending," said Gary Smith, Ciena's CEO and president. "While recent service providers' public commentary about expected annual capital expenditures has given the industry reason to be more optimistic about the second half of the year, our customers continue to spend cautiously, and as a result, our visibility remains limited. However, based on our direct conversations with customers and supported by trends we are seeing currently in the business, including recently improved order flow, we expect to deliver sequential revenue growth in our fiscal third quarter."

    The question, of course, is whether that rebound will occur and will it be significant. Simon Leopold, communications equipment analyst at Morgan Keegan & Co., still thinks Ciena is a good bet. "We maintain our Outperform rating on Ciena," he wrote in a note issued today. "Despite the poor April quarter, good sequential improvement leaves us optimistic. Challenging visibility remains, but sequential improvement, a new product cycle, net cash per share near $3 and a CY10 EV to sales of 1.0x suggests the stock has upside potential. One could argue for a fair value near $15 based on an EV/Sales ratio of 1.5x."

    IEEE P802.3ba chief talks optics

    May 21, 2009 3:42 PM by Stephen Hardy
    Posted by Stephen Hardy

    As part of my research for a June issue article on 100G semiconductors (When will we see them?), I spoke with John D'Ambrosia in his role as a spokesman for the Ethernet Alliance. John also happens to be the head of the IEEE P802.3ba task force charged with developing the 40- and 100-Gigabit Ethernet specifications. While talking about chips, John also had a few things to say about optics for these emerging applications. Herewith a sampling:

    On keeping 40GbE and 100GbE optical specs as simple as possible: "If you look back at the 10-gig optics, what initially came out of the group was more complicated than desirable, because most of the interfaces were XAUI based and you basically wound up having several layers that you put into your optics solution -- which quickly evolved to 'take all that stuff out.' And now we have simple solutions like the XFP or SFP+."

    Which doesn't mean you won't see functions pulled out second- and third-generation 100GbE modules: He foresees three stages of module evolution. which are spelled out in a whitepaper on the Ethernet Alliance site .

    On the recently announced 40GbE serial effort: "For this new effort, people are looking at doing a serial-type interface at 40-gig. And the carrier people are really driving this one. They really want to see a 40-gig serial interface that will allow them to coexist easier with their OC-768 equipment....I don't know where they're going to go with the electrical interfaces on that yet, and I think that remains to be seen for that project. I think that they'll probably leverage in the short term off of the same NAUI-type interface that we're talking about [for the current singlemode-based specs], and then have your internal muxes."

    On the prospects for on-time ratification of the task force's current standards work: "At this point, I don't really see anything that's going to throw us off of schedule."

    European cablecos get special treatment

    May 19, 2009 1:31 PM by Stephen Hardy
    Posted by Stephen Hardy

    Aurora Networks today announced the NC2000 , a new optical platform it developed for the European cable-TV market. In a pre-briefing I received on the announcement, I asked what was so European about it. The answers to that question provided an insight into the European cableco market.

    Not surprisingly, the NC2000 is based on Aurora Networks' existing NC4000 platform. However, it needed to be repackaged for the European market. The company's vice president of marketing, John Dahlquist, says that most European cablecos have buried plant and the NC4000 was designed primarly for pole mounting. So the platform had to be packaged to so that most of the outputs were on one end of a shorter, more compact package that could be vertically mounted. Naturally, the trend in new housing developments in the U.S. is toward underground cabling, so Dahlquist says Aurora plans to offer a similar configuration to U.S. cablecos in the future. The other major difference is that European cablecos operate in different wavelength bands than their U.S. counterparts.

    Meanwhile, Aurora Networks will offer its RFoG, RF PON, and related FTTH and "Fiber Deep" capabilities. Dahlquist says that European cablecos have expressed interest in RFoG and wouldn't necessarily insist on starting the standards process for such a capability from scratch. The fact that the current SCTE efforts are going to be PON friendly should make for a smooth transition to the European marketplace, he believes.

    Dahlquist says the platform was developed by specific customer requirements and that deployment announcements should come in the near future. It will be interesting to see how close to the customer those carriers run fiber.

    Nortel breakup imminent?

    April 30, 2009 1:32 PM by Stephen Hardy
    Posted by Stephen Hardy

    The Financial Post of Canada has a story on its website today suggesting that Nortel could announce the first major asset sale tomorrow, with others following in the near future.

    The enterprise business group will be the first to go, the Financial Post reports, perhaps as soon as tomorrow and no later than next week. The Post identifies Avaya and Siemens Enterprise Communications as the chief competitors for the prize.

    Meanwhile, the MEN group could be sold in as soon as five weeks; the Post says the group was on the point of being sold when Nortel filed for bankruptcy. Huawei, Alcatel-Lucent, Fujitsu, "and at least one private equity firm" are said to be vying for the group.

    You can read the story on the Post's site .

    If Nortel does go the breakup route, it will be a huge blow to the Canadian optical communications industry. Besides being the country's flagship fiber-optics company, Nortel has been home to many of the technologists and executives responsible for the other Canadian companies in the space. If the company that acquires MEN pulls the group's resources out of Canada, the vibrancy of Ontario's photonics community will diminish significantly.

    Oclaro: What's in a name?

    April 28, 2009 9:41 AM by Stephen Hardy
    Posted by Stephen Hardy

    I'm always curious about how companies come up with their names, particularly in this age when nothing escapes the scrutiny of the spin doctors. So I asked Howard Jones, who does PR for what used to be Bookham, how the Bookham/Avanex combine came up with "Oclaro." He sent me the following, which I was told to consider as straight from the mouth of CEO Alain Couder:

      "The name Oclaro was created as a combination of 'Optical' and 'Clarity.' The word communicates our clarity of vision, with an emphasis on knowing where we are going with a clear direction in the photonics market.

      "The new tagline, 'Shining Light on Photonic Innovation,' further emphasizes our dedication to innovation, leveraging our components, modules, and systems-level expertise in photonics."

    I have to admit that when I first saw it I immediately thought of a compact car (as in "...the new Ford Oclaro!"). That said, like any new name, it probably just needs a bit of time to settle in.

    What do you think?

    Saw taken to NoCal fiber optic cable?

    April 13, 2009 1:20 PM by Stephen Hardy
    Posted by Stephen Hardy

    In case you missed it -- which means you don't live in Northern California -- someone (or more than one) apparently took a hacksaw to AT&T and Sprint Nextel cables in four locations near San Jose and San Carlos early Thursday morning. The police are currently investigating, and no suspects or motives have been identified publicly.

    "We didn't do it," the AP quoted Libby Sayre, area director for the California chapter of the Communications Workers of America, as saying. The union currently is in contract negotiations with AT&T.

    Service was restored in about 24 hours .

    The affected cable ran in underground conduits about 10 feet below ground level, the AP reports.

    AT&T has upped its reward offer from $100,000 to $250,000 for information leading to the arrest and conviction of anyone involved.

    More info on Australia's NBN

    April 8, 2009 10:13 AM by Stephen Hardy
    Posted by Stephen Hardy

    A few stray bits of info to add to the story on the most recent twist in Australia's National Broadband Network (NBN) plans that I posted yesterday :

    • The Australian Government has posted a whitepaper entitled "National Broadband Network: Regulatory Reform for 21st Century Broadband" that lays out more details of what it has up its sleeve. You can find it here.
    • One interesting tidbit contained in the paper that I neglected to include in my story is that FTTH will be mandated for greenfield developments starting in July 2010.
    • Some have stated that the Government's new plan is a positive outcome for Telstra, since it potentially provides a way for the incumbent carrier to participate in the NBN after being shut out of the original RFP. However, the document makes clear that the Government plans to put the squeeze on Telstra to further open its network to competitors -- and this outcome was one of the major reasons Telstra balked at submitting a complete response to the RFP. The document also ponders the possibility of limiting the types of businesses Telstra could acquire or forcing it to divest its hybrid fiber/coax network.
    • Reaction from the companies involved in the RFP were mixed. Telstra and Singtel Optus appear ready to make the best of things, while TransACT is "disappointed."

    One good place to follow the action is Australian FTTH News , a blog by consultant Stephen Davies.

    MSO PONs now or later?

    April 3, 2009 3:10 PM by Stephen Hardy
    Posted by Stephen Hardy

    The NCTA Cable Show in Washington, DC, this week inspired a few announcements targeting the use of FTTH technology by MSOs, based either on RFoG, PON (here and here ), or both .

    But while many have speculated that RFoG is merely a waypoint on the path to PONs , John Dalquist, vice president of marketing at Aurora Networks, says MSOs aren't exactly stampeding toward the use of PON for residential applications. Most of his customers that are thinking about serving homes with fiber are going the RFoG route, he says. PON, for the most part, is being reserved right now for the delivery of commercial services to businesses.

    The exception is in Europe, where there's interest in what Dalquist called a "blast and split" approach that looks a lot like Verizon's combination of RF broadcast and IP services via PON.

    OFC Reporter's Notebook 3

    March 26, 2009 1:45 AM by Stephen Hardy
    Posted by Stephen Hardy

    I can tell it's the second day of exhibits by the fact that my handwriting has gotten appreciably more difficult to read. The over/under on the time at which my brain completes its transformation to cottage cheese has been set at 2:41 PM on Thursday.

    Meanwhile...

    • The folks at EXFO are very happy with the reception of some of their new products, in particular their FTB-5600 Distributed PMD Analyzer that measures PMD in a manner reminiscent of an OTDR. However, given the current economic environment, there are a significant number of potential customers who would like access to the capabilities but can't afford to buy the box. EXFO is currently contemplating how to address this issue. The impression I got was that they're leaning towards enabling some sort of test service offering, either directly or through partners. It's all part of a new corporate strategy that I'm guessing we'll see roll out later this year.
    • If you're feeling nostalgic for iolon's old MEMS-based tunable laser, Luna Technologies will sell you one--or more than one, since they've set a minimum lot size for the device, which they acquired from Coherent. Meanwhile, they've incorporated the laser into a line of tunable light sources with very fast sweep rates, with the Phoenix 1200 the most recent (and most compact) example.
    • In discussions regarding ADVA's announcement of a phase-based modulation format as an alternative to the dual-polarization QPSK the OIF favors for 100G, there seems to be concensus on the show floor that the long haul and metro will indeed see the application of different modulation schemes, at least initially.
    • Harry Bosco, who will move from president and CEO of Opnext to chairman at the end of the month, suggests the company could take the opportunity provided by the downturn to do a bit of vertical integration via M&A.
    • Oh yeah -- I'm doing videos, too.

    OFC Reporter's Notebook 2

    March 24, 2009 11:26 PM by Stephen Hardy
    Posted by Stephen Hardy

    Here's a look at what people told me today:

    • JDSU introduced its tunable XFP, based on its integrated laser and Mach-Zehnder (ILMZ) modulator. The ILMZ is packaged in a special TOSA. The device also features a JDSU-designed controller ASIC. In addition to the module, a JDSU spokesman said the company will offer the TOSA and ASIC as separate products.
    • EMCORE also unveiled plans for a tunable XFP. However, ExceLight Communications, the US arm of Sumitomo Electric Industries (SEI), thinks there will still be demand for the tunable XFP-E it has on display. The XFP-E will be a more capable replacement for very high performance 300-pin transceivers than your average XFP, said SEI staffers at the booth. Replied a JDSU spokesman, it sounds like SEI is targeting ultra-long-haul applications -- and if SEI thinks they can make a living off of those applications, good luck to them.
    • Execs at Ignis Photonyx, which makes WDM-PON subsystems (among other things), foresee strong pull from business service applications for WDM-PON.
    • AMCC's extremely flexible Yahara 10GbE framer/mapper/PHY can be used in metro packet optical transport platforms as well as 100G applications. But AMCC sources said they'd need to develop new chips to meet the requirements of the long-haul packet optical transport platform Verizon is talking up.
    • At a press luncheon, University of Minnesota Andrew Odlyzko suggested that the current "bandwidth is growing at 50% annually" rule of thumb could be overshooting the mark by about 15% if you're talking worldwide figures.
    • OFS is now in the splicer and optical components business, thanks to a North American reorganization its parent, Furukawa Electric Co., Ltd., has initiated. OFS will now market pump lasers, signal lasers, connector parts, and other components, as well as the fusion splicers, under the Fitel name. In addition to publicizing a tunable dispersion compensator, OFS also highlighted a reconfigurable dispersion compensation module, which comprises multiple lengths of dispersion compensating fiber and a small switch.
    • They're hiring in the market research space. Andrew Schmitt has shut down Nyquist Capital (where he authored one of the more interesting blogs in the space) to join Infonetics Research as directing analyst for optical. Meanwhile, LightCounting has hired Brad Smith as senior VP. Smith will be responsible for the development of LightCounting's new market coverage in transceiver-related semiconductor and optical markets and for managing the company's consulting operations.


    OFC Reporter's Notebook I

    March 24, 2009 1:39 AM by Stephen Hardy
    Posted by Stephen Hardy

    With all due modesty, the OSA/Lightwave Executive Forum was the place to be on the first day of OFC/NFOEC week. In addition to Verizon's pitch for a long-haul packet optical transport platform , the day featured several interesting tidbits:

    • What's the killer app? Keynoter Surya Panditi, vice president and general manager of Cisco's Access and Transport Technology Group, touted video. However, Steve Carlton, VP of planning and product management at Fujitsu Network Communications, suggested that applications such as medical imaging, which require terabits of capacity at a time, will have an even greater impact. But closer to home, Joseph Huggins, director, access and transport technology management at Qwest, said not to forget about online gaming.
    • Kou Miyake, director, NTT Service Integration Laboratories, revealed that it will take 20 million subscribers for NTT to make money with its FTTH services. The company hopes to reach that figure by the end of fiscal 2010.
    • Vik Saxena, senior director, network architecture, office of the CTO at Comcast Cable, said his company would deploy 100GbE technology today if it were available, driven more by operational efficiencies than pure bandwidth demand. However, Verizon's Elby said he expects that it will take two or three generations of 100G technology development before the technology meets the necessary price points for wide acceptance.
    • Despite a darker economic environment than at this time in 2008, the Component Vendors panelists weren't nearly as cranky as they were last year. A wag in the audience suggested that's because they were in shock. However, I think that last year, component execs felt that they hadn't derived the rewards they thought were due them from a rebounded market. In the current environment, depressed margins and company valuations make more sense.
    • Along these lines, Source Photonics chief Near Margalit suggested that a significant percentage of optical components vendors should get used to the idea that their margins will never exceed 25%.
    • The panelists on our M&A panel don't expect a big play along the lines of the Finisar/Optium merger this year. With credit tight, cash will be precious -- and won't be spent without an extremely good reason. That said, private companies' expected valuations appear to be going down to increasingly tempting levels. But no one is interested in buying market share. Acquisitions must increase product breadth or meet some other strategic objective.

    Why Meghan won't be at OFC/NFOEC

    March 12, 2009 2:57 PM by Stephen Hardy
    Posted by Stephen Hardy

    If I may be allowed a digression from the usual line of conversation in this space, it is my honor to announce that Senior Editor Meghan Fuller Hanna gave birth last night to the Red Sox' 2027 first round draft choice. John "Trip" Hanna III entered the world at 9:34 PM weighing 5 lbs and measuring 18 inches. (I'm assuming that's head to toe.)

    Now it just so happens that yesterday was my birthday as well. Is the timing of Trip's birth a coincidence in light of the fact that, in addition to Trip, Meghan also delivered a partially finished Tech Trends article for our April issue that I'm now on the hook to complete? You decide.

    Needless to say, you won't see Meghan at OFC/NFOEC in a couple of weeks. Sadly, you also won't see her byline here on the site or in the magazine for a few months. Our expectation is that she'll have time for us again in June -- assuming she's not too busy hitting grounders to #1 Son.

    We'll have pics when they're available. In the meantime, please join me in congratulating Meghan on her new product introduction.

    Menara Networks, one year later

    March 6, 2009 1:31 PM by Stephen Hardy
    Posted by Stephen Hardy

    A year after debuting its "OTN in a module" concept at OFC/NFOEC 2008, Menara Networks plans to use this year's event to highlight its electronic dispersion compensation (EDC) technology, company founder, president, and CEO Siraj Nour ElAhmadi told me earlier this week.

    ElAhmadi says that the company has garnered six design wins for its upcoming XFP device, which he expects will reach general availability in either the second or third quarter of this year. Like Menara Network's other 10G modules, the XFPs leverage the company's ASIC technology to incorporate the electronic functions required to support OTN capabilities within the transceiver, rather than on the board.

    Menara Networks produces devices for both long-haul and short-reach applications. The long-haul market was the first target; the company successfully completed a 1300-km trial in Sweden, ElAhmadi says. However, the company also sees interest in its technology for intra-CO applications, which are normally dark spots for OTN-based network management. He sees a role for Menara Networks' technology for OTN-based service demarcation as well.

    Both switch/router vendors and telecom equipment developers are working with the Menara Networks' modules, ElAhmadi reveals. The company also has seen interest from service providers, including cable companies, he adds.

    In addition to fully implementing its EDC technology, Menara Networks also has full C-Band tunability on its development roadmap. ElAhmadi hopes to have both capabilities available sometime next year.

    But perhaps the company's most noteworthy achievement was landing third-round funding last November. ElAhmadi terms the pursuit "extremely difficult -- we were lucky." He says this round should take the company through break even or cash positive.

    OpVista on the chopping block?

    February 24, 2009 9:09 AM by Stephen Hardy
    Posted by Stephen Hardy

    Paul Bonenfant, communications components analyst at Morgan Keegan & Co., released a note today saying his sources suggest that DWDM supplier OpVista may be on its last legs. Bonenfant says "industry chatter" indicates that the company has furloughed staff and is searching for a buyer; if it doesn't find one, it could close as early as this week. Bonenfant suggests that Emcore is the company most likely to snap up OpVista's assets.

    Contacted for comment, an OpVista source offered an interview with President and CEO Karl May scheduled for tomorrow, February 25, at noon EST. (February 25 update: Read the results of the interview .)

    OpVista has seen most of its success in the cable-TV space; it includes Cox Communications and Time Warner Cable on its international roster of customers. Its differentiation is the ability to cram multiple wavelengths into the space normally required for one. The company leveraged this technology last year to introduce its CX8 optical networking system , a 40-Gbps platform that used what the company called "Dense Multi-Carrier" technology to transmit four 10-Gbps wavelengths in each window of the ITU-T grid. The transmission would therefore act much like a 10-Gbps transmission, which would enable carriers to maintain their current 10-Gbps network design rules and obviate concerns about such impairments as polarization mode dispersion.

    The company also offers ROADM capabilities .

    You can see a video interview with Karl May on the Lightwave Channel.

    Ovum: European FTTH needs governmental role

    February 13, 2009 3:44 PM by Stephen Hardy
    Posted by Stephen Hardy

    Inspired by his attendance at this week's FTTH Council Europe conference in Copenhagen, Ovum Senior Analyst Charlie Davies has issued a few thoughts on the catalysts necessary for FTTH to grow more rapidly on The Continent.

    Noting that a busy exhibition floor highlighted the growing importance placed on next-generation access (NGA) infrastructures, Davies added that "there was an equal recognition that for fibre to flower, it needs a lot more nurturing: from private investors, governments and regulators alike." However, governments in particular will have a primary role to play, he said. For example:

      "The pragmatic approach of Danish incumbent TDC – rolling out fibre as and when the market requires it and when there is a clear business case to do so – would seem sensible to many commercial companies. But at a time when governments and business leaders posit the fundamental importance of a robust NGA infrastructure to the economy/recovery/future of their respective countries, this approach leaves a considerable chasm. This is making the prospect of 'patchwork quilts' of NGA access unfolding out over Europe a distinct possibility with top down (large telcos/cablecos/private-funding) meeting bottom up (utility/community/public & private funding.

      "Key to the 'bottom up' is a more active role by regional and local authorities who have a much more vested interest in their region’s overall economic and social progress. So rather than being purely operator driven broadband rollout, with an eye on NGA access and more ubiquitous coverage comes under the wing of the region, working in partnership with private companies. This approach has been key to rollout of fibre in Sweden and is being replicated elsewhere in Europe on a larger scale. A number of regions including South-West France (Pyrenees-Atlantiques) and Southern Spain (Catalonia) are embarking down this road."

    Davies notes that regulators can either help or hurt this process -- particularly as they attempt to encourage private investment. "We expect the next 6 months to be crucial as regulators at both an EU and a national level get to grips with a complex, changing, but at least vibrant landscape," he concluded.

    Bookham/Avanex: Why now?

    January 28, 2009 1:44 PM by Stephen Hardy

    Posted by Stephen Hardy

    One of the more interesting aspects of yesterday's announcement that Bookham and Avanex had agreed to merge was the timing -- what took so long?

    Alain Couder and Giovanni Barbarossa were asked during yesterday's conference call about the merger's timing. While Couder answered that there was no reason to wait out the downturn before consumating the deal, Barbarossa piped in with "My question was why we didn't do it yesterday!"

    Given that has been pretty much the sentiment among most observers of the space, I got through to Yves LeMaitre (thanks Howard!), currently Bookham's vice president of telecommunication sales and vice president of corporate marketing and future head of the combined company's non-telecom business, and posed the question to him.

    According to LeMaitre, the timing had a lot to do with the current macro-economic environment. The time is right for consolidation in the industry, he feels. Also, the companies' current valuations increased the feasibility of a merger. Finally, LeMaitre echoed a story Couder told during the call about a "trial run" interaction between the executives of the two firms that convinced the Bookham president and CEO that the two companies could work compatibility together.

    One has to wonder at this point whether the departure of Jo Major as Avanex president and CEO last July was the result of a difference of opinion within the senior management ranks about whether it was time to find a buyer. Given Barbarossa's enthusiasm for the deal, it certainly appears he's happy with what has taken place.

    The Avanex/Bookham merger is on!

    January 27, 2009 5:02 PM by Stephen Hardy
    Posted by Stephen Hardy

    The long-rumored merger of Avanex and Bookham is a rumor no longer. I'm on hold as I write this, waiting for the conference call to start.

    According to someone at Bookham's PR firm, it's believed that Bookham will own a majority stake in the combined company, something like 53.25%. Bookham also will have a 4-3 majority on the board.

    More soon...the conference is starting now.

    How do you like us now?

    January 22, 2009 9:33 AM by Stephen Hardy
    Posted by Stephen Hardy

    As you may remember, I highlighted back in August the fact that Lightwave magazine was undergoing a redesign. The fruits of our labors have finally been unleashed on the world -- and I'm curious about what the world thinks.

    Those of you who subscribe to the magazine should have received an email yesterday from me offering links to both HTML and PDF versions of the January issue. If you know us only from this website, you can check out the 'zine here .

    My editorial in the December issue described what we were hoping to accomplish. Basically, we've tried to combine the readability of a printed magazine (you can print out the articles easily if you really like paper) with the multimedia and interactive aspects of websites.

    How did we do? You can comment below or go to our corner of the Interconnection World community on our sister site, Connector Specifier.

    Ovum: Nortel's move may result in more balanced industry

    January 16, 2009 12:47 PM by Meghan Fuller Hanna
    Posted by Meghan Fuller Hanna

    Ovum analysts Dana Cooperson and Matt Walker believe that Nortel's bankruptcy filing may result in a more balanced industry structure for communications equipment.

    In a comment issued this morning, Cooperson and Walker note that when the latest phase of Nortel's downward spiral took shape four months ago--with the announcement that it would explore divestiture of its Metro Ethernet Networks (MEN) division--they argued that "a more radical approach than divestiture was needed to cure the company's woes."

    While the bankruptcy filing is radical, the analysts believe it will also be exploited by the company's competitors, who are "now in a strong position to remind customers that Nortel can no longer give assurances of continued development of any specific products, which will surely impede Nortel's ability to bring in new business."

    In fact, say Cooperson and Walker, Nortel's bankruptcy may open the door for broader industry rebalancing. They cite four specific examples, excerpted here:


    Taking on Cisco
    In data networking, Cisco remains dominant in every region and in most product segments . . . . For a company targeting Cisco, bits and pieces of Nortel's Enterprise and MEN units are clearly attractive. Juniper, Tellabs, and Ciena would benefit from looking carefully at Nortel. All have some experience with growth through M&A, and have geographic and cultural similarities. They also have some product overlap, but buying a competitor just to get them out of the market is not an unheard of strategy. More important, Nortel has channel depth outside of North America, which is of high value to these companies.

    40G/100G jumpstart
    The MEN's 40G/100G business, which Nortel now puts at 42 customer wins--defined as purchase orders or contracts that include 40G, not deployments--is an attractive focal point for a slimmed down Nortel or a competitor looking to limit its own R&D and jumpstart its customer list. Nortel has done a good job promoting its solution's viability over competitors' networks, so virtually all its competitors should be interested in this asset.

    Diversification through acquisition
    Ericsson's purchase of Marconi and Redback--after their respective bankruptcies-- provides a blueprint for what is likely to be the ultimate outcome for Nortel: acquisition by a firm looking to fill out its equipment product line. For example, Ericsson and Nokia Siemens Networks both have gaps in their wireline portfolios and little position in enterprise. Acquiring significant chunks of Nortel may be attractive to both, and their relatively high cash reserves could make it possible; as of September 2008, both vendors had just under $10 billion in cash and short-term investments.

    Evolution to 4G
    Nortel's mobile infrastructure business is now focused on LTE/SAE (long term evolution/system architecture evolution). It is working hard to develop a strong LTE/SAE ecosystem, including LG Electronics, LG Nortel, and other partners. It is doing its best to demonstrate its capabilities through trials (e.g., Verizon and T-Mobile Germany) and announcements (e.g., a deal with KDDI) and expects some commercial launches in 2009. Its LTE assets (part of the Carrier division) may be attractive for another player, perhaps Alcatel-Lucent, NEC, or ZTE.


    Finally, Cooperson and Walker concede that Nortel's decision to file for bankruptcy now, when it still has $2.6 billion in cash reserve, may enable it to re-emerge as a smaller, more focused version of itself. However, they believe the scenarios they mapped out above, in which "rivals use Nortel's bankruptcy as a chance to reshuffle the supplier landscape dramatically to their benefit, seem more likely."

    Industry reaction to Nortel's bankruptcy filing

    January 15, 2009 2:58 PM by Meghan Fuller Hanna
    Posted by Meghan Fuller Hanna

    Nortel yesterday announced that it was filing for bankruptcy, a move that did not exactly come as a surprise, given the rumors swirling around the industry over the last several months.

    In September, Nortel announced that it would explore a divestiture of its Metro Ethernet Networks (MEN) Business , including its optical and Carrier Ethernet portfolios. Its most frequently cited suitors included Huawei, Cisco, and Nokia Siemens Networks, with Alcatel-Lucent and Motorola considered long shots as both struggle with problems of their own.

    In December, The Toronto Globe and Mail reported that Nortel had received offers from "three serious bidders" and was considering selling off additional assets in lieu of seeking bankruptcy protection. In the meantime, the company continued to burn cash, the value of its shares continued their free-fall, and the company inched closer to NYSE delisting. In late December, news broke that the company was, in fact, exploring bankruptcy as an option, and several analysts argued that this could be its best course of action. In a research note dated December 19, 2008, UBS analyst Nikos Theodosopoulos offered the following viewpoint:


    NT has an interest payment of $100-$120 million due on Jan 15. We believe a likely challenging 4Q08, weakening '09 outlook, and tightening DIP financing may cause NT to withhold its interest payment and possibly pursue an early bankruptcy. If the company cannot sell its MEN division or get additional assistance from the Canadian government, an early bankruptcy may make sense to maximize franchise value.


    And now the deed is done, leaving the telecom industry to ponder what may be next for the Canadian telecom giant. Will the company emerge from bankruptcy stronger than ever, or will it be forced to sell assets in what could amount to a fire-sale?

    In an article from yesterday's New York Times , "Nortel Seeks Bankruptcy Protection" , Ian Austen cites several analysts who believe that the company is likely headed for liquidation. If they are correct, he writes,


    . . . the end of Nortel would be one of largest failures in the telecommunications equipment business . . . . Nortel's demise would also be among the biggest business failures in Canadian history. During the zenith of the technology boom, Nortel's market value accounted for about a third of all equity traded on the Toronto Stock Exchange.


    A news article in yesterday's Wall Street Journal quoted telecom analyst Ping Zhao of CreditSights, who "gave Nortel little hope of emerging from bankruptcy. 'They were already out of favor due to their weak finances,' [she said,] 'but for any of the new projects, they are definitely out of the picture' due to the filing."

    Today's Toronto Globe and Mail argues that "Nortel needs a plan, fast ." Writers Simon Avery, Jacquie McNish, and Shawn McCarthy note that Nortel has not yet formulated "a master plan on how to re-emerge a stronger company."


    An approved agenda will most likely include the sale of assets, but whether that disposition leaves the Nortel brand alive or amounts to a full liquidation of the century-old company remains hotly debated.

    "A breakup is not a top priority for the business. On the contrary, it's to be able to come out the other side as a nimbler, more focused, successful technology company," Mike Zafirovski, [Nortel's] president and chief executive officer, said in an interview. "There is no announcement today regarding strategy."


    Over at Bloomberg.com , reporter Amy Thomson notes that some of Nortel's customers, including Verizon, are vowing to stick around, but they may already be weighing their options.


    Verizon, the largest U.S. phone company and Nortel's biggest customer, "isn't doing . . . anything different about Nortel today than yesterday," spokesman Eric Rabe said. The company accounted for 11 percent of Nortel's $10.9 billion in 2007 sales. Rabe said Verizon probably won’t change its relationship with Nortel in the short term.

    Should Nortel be dissolved, Verizon has agreements with other network providers, including Cisco, for the parts it needs, Rabe said. Verizon has already moved some of its business to Cisco to meet demands for new technology, he said.


    Finally, Toronto Globe and Mail columnist Derek DeCloet argues in today's edition that Nortel should not rely on a government bailout but instead needs to refine--or perhaps redefine--its corporate vision:


    It's too early for government help. Nortel must first undergo a corporate soul-searching exercise: What does the company want to be? Where does it want to compete, and where does it want to give up? Assuming it is not dismantled entirely, the future Nortel will certainly be smaller, and focused on perhaps one or two lines of business.


    So what do you think? Does bankruptcy represent Nortel's best path forward?

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Stephen Hardy

Stephen has covered fiber optics for more than a dozen years, and communications and technology for more than 25 years. He is responsible for establishing and executing Lightwave's editorial strategy across its digital magazine, website, newsletters, research and other information products. He has won multiple awards for his writing.

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