Lucent and WinStar to build $2-billion fiber and wireless network

Lucent and WinStar to build $2-billion fiber and wireless network

By KATHLEEN RICHARDS

WinStar Communications Inc. (New York City) announced it has awarded a $2-billion equipment and finance agreement with Lucent Technologies (Murray Hill, NJ). The tele commun ications manu facturer will build WinStar`s fixed wireless broadband networks in 100 U.S. and international markets using fiber as the backbone. WinStar is a competitive local-exchange carrier (CLEC) that currently offers facilities-based local, long-distance, and Internet access services in 27 national markets and expects to enter three additional markets-Miami, St. Louis, and Cleveland-by the end of 1998.

Winstar expects the ability of the fiber network backbone to support multiple voice and data communications well into the future will give the CLEC an edge in bandwidth. A total of six backbone fibers, used to connect cities and central offices between metropolitan areas, is owned by WinStar or leased--via indefeasible right of use (IRU) transactions--from a variety of sources. In July, WinStar announced an IRU agreement with Metromedia Fiber that covers seven intercity backbones to link the cities of Chicago; New York City; Oakland, San Jose, and San Francisco, CA; Washington, D.C.; and Philadelphia. Another fiber backbone services the East Coast from Stamford, CT to New York; Newark, NJ; Philadelphia, Baltimore, MD; and Washington, DC. According to WinStar, 51% of its traffic originates on these routes.

WinStar will use Lucent`s WaveStar OLS 400G, a dense wavelength-division multiplexing (DWDM) system that allows service providers to offer up to 80 channels of voice, data, and video information simultaneously over one fiber. Channel capacity is 400 Gbits/sec with a low error rate over a distance of up to 640 km. Able to support up to eight fibers, the 400G system offers a maximum bandwidth of 3.2 Tbits/sec. One fiber can support mixed rates of 2.5- and 10-Gbit/sec Synchronous Optical Network/Synchronous Digital Hierarchy channels. The 400G system works with other vendors` equipment and applications that transmit at a mix of these rates.

"It`s a surprise that a new CLEC building a new network would immediately jump to 80-wavelength technology, and to be honest, it surprised us," says Kathy Szelag, vice president of Lucent`s optical-networking group.

Lucent`s other DWDM system, the WaveStar OLS 40G, which supports up to 16 channels, was also an option for WinStar. But the high bandwidth capacity and the modular "pay as you grow" pricing structure of the 400G convinced the carrier to choose the high-end system, explains Szelag. The 400G`s scaleable architecture allows carriers to add DWDM circuit packs in two-channel increments up to the full 80 channels.

Such scaleability also applies to the network amplifiers. "An amplifier sits at each end of the fiber, every 100 km as you go down the fiber," says Szelag. Amplifiers represent a significant part of the network cost--and an 80-wavelength amp is expensive. However, Lucent is offering the 400G amplifiers in 20-wavelength increments, "priced like a 20-wavelength chunk," notes Szelag. When the carrier compares the cost of a 20-wavelength "chunk" to the cost of a 16-channel system that isn`t scaleable, a "pay as you grow" plan puts the ability to quadruple the capacity within a service provider`s economic reach.

WinStar is still finalizing the initial number of channels per market, asserts Szelag. "Forty cities are involved in the build," she says. "What we`ll need from [WinStar] is their traffic projections. I expect some to be very full and some to be lightly loaded from day one."

The carrier currently offers between five and 10 channels in 15 markets with an average bandwidth of more than 750 GHz. Twelve markets are beyond 10 channels and require bandwidth of more than 1000 GHz.

The fiber backbone will also use Lucent`s Port Master remote-access technology, access concentrators, AnyMedia fast-access products, and 5ESS AnyMedia switches. WinStar is eyeing some of Lucent`s as yet unannounced "high-tech" products, according to Szelag.

Winstar, which has a five-year history with Lucent, already uses 23 of Lucent`s 5ESS switches, designed to be upgraded to handle any combination of data and voice. Lucent`s customer-premises equipment is also in WinStar`s networks because it is the standard, says William J. Rouhana, Jr., WinStar`s chairman and chief executive.

The last mile of the global network will use WinStar`s wireless broadband technology to communicate between customer facilities and the fiber-backbone hub. The company is licensed to operate in the 28- and 38-GHz band. A 15-inch antenna, placed on the clients` buildings within the line of site of the hub, signals the network. Marketed as "wireless fiber" technology, WinStar`s last-mile fiber alternative offers comparable reliability, data transmission quality, and bandwidth, according to the company. It is also less expensive and faster to implement than fiber.

WinStar has building-access rights to 3500 sites (10,000 customers). The carrier expects to have access rights to a minimum of 8000 buildings by the end of 1999.

To date, WinStar`s radio equipment is provided by several small manufacturers. Lucent is likely to become the supplier in the future, asserts Rouhana.

Lucent will provide up to $2 billion in financing to fund the completion of the buildout of the broadband network, available to WinStar in $500-million tranches. WinStar has a half-billion dollars of its own money to supplement Lucent`s funding, according to Rouhana.

In addition to financing, Lucent will provide network design, systems integration, and a range of products and technologies over a five-year period. Lucent will also develop additional equipment and applications, or integrate products from other manufacturers as part of the "best of breed" agreement. Under the agreement, WinStar retains final design authority and is responsible for the day-to-day operations of the networks.

Lucent`s expertise and resources will allow WinStar to enter global markets, says Rouhana. The strategic partnership will also enable WinStar to boost its marketing efforts. The carrier will especially pursue commercial-building customers that do not have access to fiber. q