XO Communications (Reston, VA) is the winning bidder for substantially all the assets of Allegiance Telecom (Dallas) and its subsidiaries, except for Allegiance's customer premises equipment sales and maintenance business, its managed modem business, and certain other Allegiance assets and operations. XO will pay about $311 million in cash and 45.38 million shares of XO common stock for the assets. With the acquisition of substantially all of Allegiance's network assets and customer base, XO says it will become the nation's largest independent provider of national local telecommunications and broadband services with approximately 330,000 customers and more than $1.6 billion in revenue. The company will have the largest network of nationwide connections to RBOCs' networks of any other CLEC and double the points of presence within the 36 markets where both XO and Allegiance operate.

The Optical Internetworking Forum (OIF—Fremont, CA) announced the creation of a new user working group to address physical layer technology at its recent quarterly meeting in San Diego. The Physical Layer User Working Group will bring equipment manufacturers and system vendors together in a collective environment to provide technical advice and perspective to the Physical and Link Layer (PLL) Working Group. The Physical Layer User Working Group will develop requirements and guidelines for components, modules, subsystems, and communications links used in networking equipment, providing common direction to the PLL vendor community and other OIF working groups. In addition, the PLL Working Group announced a third tunable-laser multisource agreement, the Small Form Factor Integratable Tunable Laser Assembly Multi Source Agreement, which responds to network equipment vendors' desire to reduce size and power.

Manufacturing equipment provider Sagitta (Hauppauge, NY) signed an agreement with Corning Cable Systems (Hickory, NC) to exclusively license its automated manufacturing technology for fiber-optic patch-cord termination. The technology encompasses an advanced automated optical-fiber connector terminating line. Sagitta will add its expertise in machine vision, submicron polishing, and adaptive process control to create a line of robust and cost-effective optical-connector assembly manufacturing cells to augment its Gemini Cx machine, which integrates polishing, cleaning, and inspection in one manufacturing cell for simplex and multifiber optical connectors achieving high throughput at very high yields.

Picolight (Boulder, CO), a supplier of oxide VCSEL-based transceivers and VCSEL subassemblies, entered into a cross-licensing agreement with the Honeywell VCSEL Optical Products business (Richardson, TX) for laser-related intellectual property. The agreement, signed last November, applies to four Picolight patents and one Honeywell patent, which pertain to "oxide-confined" VCSEL designs. In January, Honeywell and Finisar (Sunnyvale, CA) announced a definitive agreement by which Finisar has agreed to acquire the VCSEL Optical Products business. The cross-licensing agreement will transfer to Finisar when the transaction closes during the first quarter.

Interconnect company Xanoptix (Merrimack, NH) has completed the acquisition of AraLight, manufacturer of high-density optoelectronic components. The acquisition strengthens Xanoptix's multichip hybridization and parallel optics intellectual property portfolio and its position in high-channel-density 850-nm parallel optics transceivers. Xanoptix received all the rights to AraLight's issued, pending, and assigned patents and trademarks as well as product designs.

Network operator Embratel (Sao Paulo, Brazil) is migrating to MPLS using the Tellabs 6300 managed SDH transport system, which supports Ethernet private networks and Ethernet private line and will allow the carrier to provide differentiated voice and data services to its corporate customers. Installation will initially comprise the Tellabs 6350 switch node. The second phase will see the deployment of the Tellabs 6345 switch node. The Tellabs' solutions will serve Embratel networks in Rio de Janeiro, Porto Alegre, Curitiba, Florianopolis, Sao Paulo, Sao Jose dos Campos, Campinas, Santos, Belo Horizonte, and Brasilia.

Via a strategic partnership with Scottish Water, Fibrelink (Cheshire, UK) will conduct a pilot project at the new Europarc at Rosyth in Fife to use Scotland's existing network of sewers to install high-speed broadband cable technology using Fibrelink's Sewer Cable System. The pilot will be a testbed for a possible rollout across Scotland. The first cables were scheduled to be deployed last month. Scottish Water will lease the sewer network, while Fibrelink contracts with telecom providers to deliver the broadband connection.

Alcatel (Paris) and Draka (Amsterdam) announced their intention to combine their global optical fiber and communications cable businesses into a jointly owned company. Draka would own 50.1% of the new company and Alcatel 49.9%. Alcatel will contribute all its optical fiber, including TeraLight, and fiber cable assets, to the new company, which would be accounted for as an equity company. Draka would bring its proprietary Plasma Chemical Vapour Deposition process as well as a LAN/premises fiber solution, led by the MaxCap product family and JETnet networking systems. In optical-fiber and fiber cables, the combined business would be undisputed number one in China, through the combination of Alcatel's assets with Draka's interest in YOFC, the leading Chinese optical-fiber and fiber-cable manufacturer.

China Netcom (CNC—Beijing) has purchased full control of Asia Netcom (Hong Kong), a company founded one year ago by a consortium lead by CNC, which included Newbridge Capital and Softbank Asia Infrastructure Fund. In its first year of operation since the consortium took over key assets of the former Asia Global Crossing, Asia Netcom has become one of Asia-Pacific's leading providers of IP-based network solutions. The partners recently agreed to exit the consortium to support CNC in facilitating its restructuring process. Since its launch last year, Asia Netcom's business has been managed as a stand-alone entity. There are no immediate plans to fully integrate Asia Netcom into China Netcom's mainland operations.

Startup Glimmerglass (Hayward, CA), and Nissho Electronics (Tokyo), a distributor and systems integrator, announced a strategic alliance in which Nissho will introduce Glimmerglass's photonic-switching subsystems to customers in Japan.

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