Warning: Tunable lasers are just the start

May 1, 2003

Riding the escalator together to an OFC session on tunable lasers, I quipped to John Clark, president of iolon, that tunable-laser makers like him were the happiest folks at an otherwise sober show. He laughed and shot back, "We're delusional!" But I know he was only joking. In fact, tunable lasers are finding their way into field deployment, primarily for sparing and remote provisioning. More important, service providers see tunable lasers as key tools for driving a future return to profitability.

Service providers clearly face a broken business model in which bandwidth demand continues to grow at 50-100% per year, but revenues remain flat at best and profitability looks difficult to achieve. Additionally, business opportunity has shifted from long-haul to more competitive metro, access, and enterprise networks—arenas where the types of services offered are critical to success. As most companies now recognize, this business climate means that technology is less important than economics, so the value proposition of a product and the premium it commands are closely scrutinized.

Stuart Elby, executive director of next-generation architecture at Verizon, says that wavelength tunability affords lower capital and operational expenditures, in addition to the network flexibility needed to meet a steady flow of new orders, especially for 10-Gbit/sec transmission. He estimates that a dynamic network, enabled by tunability, could provide capital-expenditure savings of 35%, although it may take several years to see the benefits.

Speaking at an OFC Market Watch session, Elby went down the standard list of applications for tunable lasers, including sparing, dynamic wavelength provisioning, and protection switches. But the one application that stood out for me was reconfigurable optical add/drop multiplexers (ROADMs) (see Tech Trends, page 33). These subsystems allow flexible provisioning from carrier nodes, with some wavelength bands passed through and some dropped or added. In addition, they can be implemented incrementally and may displace the need for more expensive optical crossconnects.

The rub for component makers is that Elby wants wideband tunable lasers for no more than a 10-15% premium over fixed-wavelength lasers and associated electronics. That is not the scenario investors and startups had in mind for tunable lasers several years ago. An initial high premium was expected for tunable capabilities, and costs would drop as volume rose. However, service providers like Verizon are now in a position to squeeze suppliers on price. In addition, they're not willing to pay much of a premium for a technology that, while beneficial, requires substantial investment in related electronics and system controls. So it turns out that for tunable lasers to succeed, more than just the laser has to be tunable.

For their part, tunable-laser companies have been making every effort to accommodate their customers and create a stable design and manufacturing infrastructure. Prices for both wideband and narrowband tunable lasers have become more competitive with fixed-wavelength lasers, multisource agreements (MSAs) have been signed by numerous companies for transceivers and transponders, and the Optical Internetworking Forum is coming to agreement on numerous specifications. MSA participants like Agility Communications, which launched what it says is the first tunable-laser transponder at OFC in March, are able to deal with their customers either within the MSA agreements or by unique specifications. The aggressive move into the field by Intel is hailed as a strong indicator that tunable lasers are here to stay.

These developments, however, are not yet enough to spark widespread deployment in dynamic networks. The links still developing include the ROADMs that Verizon seeks, along with related components such as dynamic gain equalizers, variable optical attenuators, and tunable dispersion compensators. And wideband tunable filters, the last piece, are just coming into their own as commercial products.

Tunable filters can be based on Fabry-Perot etalons, temperature- or mechanically tuned fiber Bragg gratings, diffraction gratings, tilt-interference filters, or linear variable filters. For example, at OFC, Aegis Semiconductor launched a tunable filter that relies on optical thin-film interference coatings.

Some tunable-laser manufacturers have realized that they should produce a tunable filter to complement their lasers and provide a complete solution for service providers. Iolon uses its tunable-laser platform for a newly launched family of widely tunable optical bandpass filters.

It would be nice to think that all the innovation and investment that have gone into creating tunable lasers—and tunable-laser companies—will directly translate into value for customers and financial rewards. But instead of proving to be an immediately disruptive technology, tunable lasers now look like the harbinger of a progressively growing fabric of tunable components and subsystems that in fact will provide the value for which customers pay a premium.

Conard Holton is chief editor of WDM Solutions and executive editor of Laser Focus World. Based on his years of experience covering optoelectronics and telecommunications, this column examines the component technologies and trends that drive optical networking. He can be reached at 603-891-9161 or [email protected].

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