Update

Tellium (Oceanport, NJ), provider of optical-switching technology, and Zhone Technologies (Oakland), a privately held company dedicated to developing access equipment, signed a definitive merger agreement. Under the proposed stock-for-stock transaction, the security holders of Zhone would receive 60% and the security holders of Tellium would continue to hold the remaining 40% of the combined company's outstanding fully converted shares as of closing. Mory Ejabat, current chairman and CEO of Zhone and former chief executive of Ascend Communications, will become chairman and CEO of the combined company, which will operate under the name Zhone Technologies. The transaction is subject to the approval of each company's security holders, a regulatory review, and other customary closing conditions. The deal is expected to close before year's end.

The IEEE 802.17 Working Group approved the latest working ballot of the resilient-packet-ring (RPR) standard, Draft 2.3. Members are now working to resolve the outstanding technical comments and publish Draft 2.4. Pending acceptance of the changes to resolve the technical comments, the RPR standard will move to sponsor ballot for approval. Sponsor ballot requires approval of the 802.17 RPR standard by IEEE members who have been accepted into the IEEE sponsor ballot pool.

ASIP (Somerset, NJ), provider of photonic ICs, raised $16 million in the initial installment of its Series C financing round. Nokia Venture Partners led the Series C round and was joined by other new investors, Finaventures and Intel Capital (Intel's strategic investment program), as well as original investor Redpoint Ventures. That brings the total equity investment in ASIP to $23.5 million. Redpoint Ventures and Multilink provided the Series A and B investments totaling $7.5 million, which were announced in July 2000. ASIP is supplying high-speed, integrated lasers to companies developing the next-generation of small-form-factor transceivers such as XFP, X2, and XPAK. All of ASIP's products are built on its patented Asymmetric TwinGuide technology platform. The company will use the proceeds of this financing to enable the fulfillment of customer commitments to further development of its manufacturing infrastructure and continue product innovation.

Tellabs (Naperville, IL) will outsource manufacturing of its North American products to Sanmina-SCI, resulting in the layoff of about 325 employees. Tellabs plans to move remaining employees from its main building in Bolingbrook, IL, to its Naperville headquarters and sell the 545,000-square-ft Bolingbrook main building. Manufacturing operations in Bolingbrook are expected to cease by year's end.

Intel (Santa Clara, CA) acquired West Bay Semiconductor (Vancouver, British Columbia) in a cash for assets transaction. Financial terms of the deal were not disclosed. West Bay's advanced chip architecture enables high-density designs for networking chips. In future products, Intel intends to combine this architectural and design efficiency with its 90-nm silicon manufacturing process. These combined efficiencies are expected to reduce the cost, power consumption, and complexity of optical-networking equipment that uses these chips.

Optical Ethernet systems provider Atrica (Santa Clara, CA) raised $17 million in the first close of its fourth round of funding. The first close includes funding from existing investors—Accel Partners, Ascend Technology Ventures, Benchmark Capital, Challenge Fund, Innovacom (the venture capital subsidiary of France Telecom), Gemini Israel Fund, Investor Growth Capital, JK&B Capital, and St. Paul Venture Capital—and from new investors such as Intel Capital, Intel's strategic investment program. Atrica will use the fourth round investment as working capital to meet demand for its systems worldwide, especially in Asia.

Ciena (Linthicum, MD) entered the government and educational markets. Argonne National Laboratory, one of the U.S. Department of Energy's largest research centers, is deploying Ciena's ONLINE Metro DWDM platform in two separate networks, including the TeraGrid project, the fastest dedicated optical backplane network for distributed computing resources. Ciena's metro platform provides Argonne with connectivity solutions in the form of OC-48 and OC-192 channels between the laboratory located 25 miles southwest of Chicago, the National Center for Supercomputing Applications (NCSA) in Champaign, IL, and several Illinois research and education institutions. The system is also providing OC-48/OC-192 links between locations in the TeraGrid and Illinois Wired/Wireless Infrastructure for Research and Education (I-WIRE) networks, including StarLight, a global experimental optical-network exchange facility.

Specially enhanced versions of Marconi's (London) MSH family of optical switches have been selected by Deutsche Telekom AG to form the intelligent core of its Global Seamless Network (GSN) research and demonstration project. The GSN is used by Deutsche Telekom to investigate possible architectures for future core optical-network deployments. It is a fully operational multivendor demonstrator that involves the latest core optical transmission technology. Marconi has provided Deutsche Telekom's Innovation Management with enhanced versions of its core, optical switches on a free-trial basis to prove the cost-saving potential of the GSN, and its ability to interwork with Ethernet and IP solutions on which the operator's end-user services are based.

CableRunner North America, LLC (Boca Raton, FL), a public/private business venture partly owned and operated by the Vienna (Austria) Sewer Department (CableRunner Europe, a.k.a. WKA), a fiber-optic infrastructure provider, announced that its sister company, WKA/CableRunner Austria, has acquired Global Metro Networks' Austrian operations, including a 92-km dark fiber ring in the Vienna. Financial terms were not disclosed. The acquisition allows CableRunner Austria to provide dark fiber rings in addition to its last mile deployment solutions. It also positions CableRunner Austria as a major dark fiber provider and opens opportunities for the company to acquire other city network operations and dark fiber rings throughout Europe and North America. Under terms of the agreement, Global Metro's Austrian operations will be fully integrated into CableRunner Austria. The company will become a dark fiber provider performing installations, support, and back office services for fiber management. Vienna plans to use its own CableRunner technology for deployment projects.

France Telecom (FT—Paris) will launch a backbone point of presence (PoP) in Prague by the first quarter of next year to respond to demand for telecommunications services from local companies and support strong economic growth in the Czech Republic. The new PoP will provide Czech carriers and Internet service providers (ISPs) with direct access to competitive transit and interconnection services as well as extend the coverage provided to worldwide customers of FT's Open Transit wholesale solutions. The France Telecom group is not a newcomer to the Czech Republic, already providing services through Equant, provider of data and IP services for multinational businesses. FT will also open a PoP in Warsaw during next year's first quarter. With these two new customer access points, FT will be well-positioned to satisfy demand for high-capacity transit from competitive carriers and ISPs in Central Europe as broadband and next-generation mobile services take off. In addition, FT won a contract to provide international IP transit to NTL, the United Kingdom's largest cable operator and broadband provider. Through the deal, FT will connect NTL to its global backbone network via two PoPs, one in London and a new one in Bristol (UK).

Indonesian telecommunications company Indosat commissioned Pirelli (Milan, Italy) and Siemens Information and Communications Networks (Munich, Germany) as a consortium to deliver a high-speed optical-fiber network. The three subnetworks in East Java, Jakarta-Bandung, and Sumatra cover a total of more than 1,376 km. They form the backbone for nationwide transport of both fixed-network and mobile telephony data. The contract is worth about 20 million euros. Siemens, the consortium leader, will provide the transmission equipment as well as the relevant cable and equipment installation, with plans to install the project in just half a year. Pirelli will deliver the terrestrial cable, equipped with 24 new Pirelli SM Light fibers. The project strengthens the two-year partnership between Pirelli and Siemens.

Lucent Technologies (Murray Hill, NJ) won two contracts in China with Guangdong Eastern Fibernet Co. (GEFC). Lucent's technology will be used for the expansion of GEFC's SDH and DWDM networks in Guangdong province. Shanghai Tiantong Telecommunications Equipment Co., a Lucent Business Partner, has provided presales support on both projects and will deliver the equipment to GEFC. For the project, Lucent's LambdaUnite multiservice switches will be deployed to form the core ring of the SDH network in Guangzhou, JiangMen, and Shenzhen. That will connect the metro rings formed by Lucent's Metropolis ADM in Zhaoqing, Zhanjiang, Jieyang, Shantou, and Huizhou. Lucent also will deploy the WaveStar ITM-SC network management system to help GEFC integrate its hardware into the existing SDH network. The WaveStar OLS 1.6T and Metropolis EON will be deployed in the major cities of Guangdong province to manage broadband traffic growth and provide data services to customers.

Alcatel (Paris) has been awarded a multimillion-dollar project to provide fully integrated telecommunications solutions for an 800-km-long oil pipeline for the Pak-Arab Pipeline Company (PAPCO) in Pakistan. Alcatel will design, integrate, install, and commission all telecom applications, including an optical transmission backbone, covering all 18 sites along the pipeline. The project was awarded by China Petroleum Engineering & Construction Corp. (CPECC), one of the largest international contractors in China. CPECC is building the pipeline for PAPCO, spanning from Mohmood Kot in the north to Karachi in the south of Pakistan. The oil and gas telecom solution comprises next-generation optical multiservice nodes, a private automatic branch exchange, VHF and UHF trunking, a hotline telephone system, radio paging, optical Ethernet switching, a power system, secured connectivity to SCADA components, public announcement, and centralized network management. Upon completion of the project next year, PAPCO will be able to provide unmanned automatic communications services along the entire pipeline, including voice, data, and video services.

Great Wall Broadband Network Service Co. (GWBN—Shanghai), an Internet service provider (ISP) in China, will extend its broadband network in 15 cities throughout China with free-space optics systems from Terabeam (Redmond, WA). The ISP will accelerate the construction of its network for broadband Internet services with about 250 Terabeam links in the next two years. Terms were not disclosed. The first several Terabeam links for GWBN are in Shanghai and the Chongqing metropolitan area, one of the faster growing district cities in China. GWBN will use Terabeam's initial wireless links to extend its MAN across the Yangtze and Jialing rivers.

Salira Optical Network Systems (Santa Clara, CA), provider of optical access systems, announced that China Netcom Corp. (CNC) has partnered with Salira Shanghai to cooperate in the enhancement of the service provider's facilities-based telecommunications networks. CNC has agreed to deploy the Salira 2000 platform in Beijing and in Changsha City in Hunan province. These systems will be used to deliver advanced voice, video, and data services to business customers in a variety of fiber to the premises deployments. CNC will use the Salira 2000 platform to connect customers to existing SDH rings to deliver traditional E1 TDM services. CNC will also deploy the system to facilitate Layer 2 tunneling protocol for virtual-private-network services that will deliver broadband to distributed enterprise locations.

FlexLight Networks (Atlanta, GA, and Kfar Saba, Israel), a gigabit passive-optical-network (GPON) equipment provider, received an additional $900,000 investment on behalf of the Office of the Chief Scientist, the research and development arm of the Israeli Ministry of Industry and Trade. This tranche of investment recognizes the International Telecommunication Union's decision to confirm GPON as a standard. Founded in September 2000, FlexLight is developing the Optimate suite of GPON optical access products. The Ministry of Industry and Trade aids in the expansion of the technological base of the Israeli industry through a wide range of support programs, including this fund, aimed at supporting startups in Israel.