NGN2000:  WHERE THE NET IS GOING NEXT
Speaking at the annual Next Generation Networks (NGN2000) conference in Washington D.C., Dr. John McQuillan said the developments of the past year mark the “end of the beginning” for the construction of the broadband Internet. The recent volatility for networking stocks is one indicator that the industry is increasingly driven by the financial cycles of capital markets. Fear that service providers will not be able to afford the capital expenditures of a next generation network build-out are held in check by investor greed in gauging the enormous potential of what lies ahead.  McQuillan noted that venture funding now accounts for 40% of all R&D in the US (more for networking firms), up from 4% in 1995.  Among this year’s predictions, McQuillan expects that incumbent service providers will pull ahead, as it becomes harder for new service providers to raise money or go public. The result will be network consolidations.  Meanwhile, acquisition frenzy among network chip companies will continue.  Start-up system companies will give the first strong challenge to the incumbent network equipment vendors in years.  And as usual, the integration of multiple technologies will continue to be a real hassle for buyers.
October 31, 2000

NGN2000:  THE INTERNET SCALABILITY CRISIS
The key to Internet scalability is to preserve the best features of IP while integrating the best features of the telephony world, said Judy Estrin, President and CEO of Packet Design Inc.  In her view, the best architectural element of IP is the open and connection-less, “cloud” paradigm of the Internet.  Its weaknesses include poor deployment tools and overall system immaturity.  Telephony enjoys excellent provisioning and accounting, but relies on a connection-oriented architecture that is not well suited to current traffic characteristics.  Estrin’s company is working to evolve the routing algorithms of IP without losing its key attributes.  She sees MPLS as a transitional traffic-engineering tool for certain environments and believes that the fundamental problems it addresses can be solved with IP.  Packet Design is not ready to disclose its proposal.

Desh Deshpande, Chairman and Founder of Sycamore Networks, said that Internet trunks are being upgraded to 10 Gbps rates, but that moving beyond this speed will be difficult because of technical limitations in processing packets at these high rates.  Rather than terabit capacity links, he expects networks will evolve to have dozens or hundreds of 10 Gbps pipes.  Deshpande believes the next stage of network evolution will be driven by fast provisioning of these big pipes, enabling bandwidth intensive applications to bypass the core by setting up their own optical virtual circuits.

Bill Norton, co-founder and Chief Technical Liaison of Equinix, places the core bottleneck of Internet scalability at the inefficient interconnection strategy between ISPs.  The congestion points created at the first generation NAPs have now been replaced by a haphazard arrangement of private peering agreements between ISPs.  The limited factor is that companies must wait weeks or months for each new OC-12 circuit they agree to share.  Norton argues that by moving their facilities to a common next generation Internet exchange, the ISPs could peer across the easily provisioned dark fiber inside the building.
October 31, 2000

NGN2000 KEYNOTE:  UUNET’S JOHN SIDGMORE
UUNET's backbone traffic continues to grow at an annual 10x (1000%) rate, said John Sidgmore, WorldCom's Vice Chairman.  And no slow down in demand or bandwidth glut is anywhere on the horizon.  With the onslaught of broadband users, new streaming media content, wireless data users and voice-enable Web browsing, Sidgmore said UUNET’s strategy continues to be “expand the network as fast as possible with everything you’ve got.”  However, with the crash of the dotcoms and the market skepticism over everything telecom, Sidgmore said that we’ve learned a lot.  Internet growth will be driven by those with access to capital, innovation, speed to market and a real business model.   For his company, drivers to success are not based only on networking technology.  The cost of data switching and the cost long-haul fiber accounts for only 16% of the overall bill for data service, and these are on a sharp decline.  In comparison, local access accounts for up to 40% of WorldCom's costs, while general sales/marketing/billing operations account for roughly 30% of their overhead.  True advantages are gained by improving the company's operating efficiency, such as by moving to Web-enabled customer service and sales.  An announcement on the company’s restructuring is expected on Wednesday.
October 31, 2000

ALCATEL INVESTS $1 BILLION IN 360NETWORKS, SIGNS UNDERSEA CABLE PROJECTS
Alcatel will purchase up to $1 billion of 360networks convertible preferred stock.  In return, 360networks will award Alcatel contracts for two new undersea networks.  The cables include 360pacific, a $1.1 billion transpacific cable linking the US, Canada and Japan.  The 22,000 km, six-fiber pair cable will have a capacity of 4.8 Tbps and is expected to enter service in April 2002.  Alcatel will also supply equipment for an additional transatlantic cable, 360atlantic2, to mesh with 360atlantic, a 1.92 Tbps cable scheduled for completion in March 2001.  Alcatel will also supply $100 million in optical networking equipment for the company’s terrestrial networks.  The companies are also partners on the 360americas project, a 29,000 km network linking North and South America. The first segment between the US and Brazil was completed last month.
http://www.alcatel.com/vpr/?body=/latestnews/31102000_2uk
Alcatel, October 31, 2000

• In July, 360networks announced plans to use Sycamore Networks' SN 16000 intelligent optical switch, SN 8000 intelligent optical transport products and SILVX optical network management system to create a flexible optical mesh architecture for its global network.  The design would use a combination OSPF routing and MPLS signaling and Sycamore’s soft optics to route lightpaths across the network. 

EPIK TAPS SYCAMORE NETWORKS FOR TRANSPORT EQUIPMENT
EPIK Communications, a "carriers' carrier'' providing dark fiber and high-bandwidth services throughout the Southeastern US, selected Sycamore Networks’ SN 8000 Intelligent Optical Transport platform for its long haul network. Deployment will begin next month.  Financial terms were not disclosed.  EPIK is developing a national fiber footprint through fiber swaps.  http://www.sycamorenet.com/about/news/pressreleases.cfm?news_item_id=349
Sycamore Networks, October 31, 2000

BELLSOUTH SELECTS CISCO TO DEVELOP OPTICAL-BASED INTERNET EXCHANGE
BellSouth named Cisco Systems as a primary vendor to build out its "Florida Multimedia Internet eXchange" (FloridaMIX).  The next generation Network Access Point (NAP), which will be located in South Florida, will use Cisco's GSR 12016, ONS 15454 optical transport platform, Catalyst 6500 switch and the company’s MPLS software implementation.   FloridaMIX will provide a range of DS-3 to OC-192 optical connectivity between Tier 3 and Tier 1 ISPs, as well as connect fiber routes between the US, Latin America, the Caribbean, Africa and Western Europe.  http://www.cisco.com/warp/public/146/pressroom/2000/oct00/sp_103100.htm  http://www.bellsouth.com/ 
Cisco Systems, October 31, 2000

• Last month, BellSouth selected Sycamore's SN 16000 intelligent optical switches and SN 8000 intelligent optical transport platform for its forthcoming "Florida Multimedia Internet eXchange" (FloridaMIX) network.  Participants committed to FloridaMIX so far include FPL Fibernet, Intermedia, NETRAIL, Qwest, International Wire Communications (IWC), Diveo and UUNET.  BellSouth will also offer multiple optical connection points throughout Miami-Dade, Broward and Palm Beach Counties to provide local ISPs will direct connections into the exchange.  
  

• In June, Metromedia Fiber Network, AT&T, EPIK Communications, Global Crossing, Level 3 Communications and NetRail, agreed to participate in Internet Coast Network Access Point (NAP) of the Americas in downtown Miami.  The NAP of the Americas facility would also be in close proximity to undersea cable termination stations.

QWEST SIGNS WHOLESALE CONTRACT WORTH $600 MILLION WITH MCLEODUSA 
Qwest Communications will provide wholesale voice and data service to McLeodUSA under a contract worth approximately $600 million over three years.  The deal enables McLeodUSA to offer its customers DSL and voice messaging and creates an incentive for McLeodUSA to use Qwest's high-speed broadband network along with its own facilities.  McLeod operates a CLEC in Midwestern and Rocky Mountain states.  http://www.qwest.com/about/media/story.asp?id=343
http://www.mcleodusa.com/
Qwest, October 31, 2000

• In January, McLeodUSA acquired Splitrock Services Inc., which operated a nationwide data network with ATM switches in over 325 POPs in all 50 states.
  
• In May, McLeodUSA secured a bank credit facility of $1.3 billion to expand its network and fund its business plan.

CENTERPOINT CLOSES $130 MILLION FOR ITS SUBCARRIER MULTIPLEXING OPTICAL TRANSPORT
Centerpoint Broadband Technologies, a start-up developing optical transport and aggregation systems, raised approximately $130 million in its mezzanine round of financing.  The company is preparing to bring its unique Subcarrier Multiplexing (SCM) technology to commercial production.  http://www.centerpoint.com
Centerpoint, October 31, 2000

• Centerpoint’s patent-pending Subcarrier Multiplexing (SCM) technology aggregates multiple signals into a single wavelength by modulating digital input into radio frequency (RF) signals.  Centerpoint said its system can accept inputs in their native form, making it possible to connect legacy systems to the network without having to multiplex the signal to match existing network speeds.  The system transmits data at up to 40 Gbps on a single wavelength.
  
• Centerpoint's technology relies on twelve key patent and patent disclosures that were licensed from Lockheed Martin on an exclusive basis.  The technology is used in government communication systems.  The company is led by Dana Waldman, who previously served as director of Lockeed Martin's Advanced Communications Systems (ACS).  The company is based in San Jose, California.

KYMATA SECURES ADDITIONAL $67 MILLION FOR ITS PLANAR OPTICAL COMPONENTS
Kymata, a developer of planar optical components and subsystems, secured an additional $67 million in funding, which includes asset financing, a venture loan and additional equity fundraising.  The company has raised $162 million over the past two years.  Investors include European Venture Partners, GATX European Technology Ventures, RBS Mezzanine Limited, Chase H&Q, Comdisco Ventures, FNI Venture Capital, RBS Mezzanine Limited, William Jones & Associates, 3i Group, ACT Venture Capital, Bowman Capital, BT, ComVentures, Kleiner Perkins Caufield & Byers, Telesoft Partners, the University of Glasgow, and the University of Southampton.  http://www.kymata.com
Kymata, October 31, 2000

• Kymata's portfolio includes 40-Channel Arrayed Waveguide Gratings, Variable Optical Attenuators, Thermo-Optic Switches and Optical Wavelength Power Monitors, which integrate a 40-channel AWG and an array of photo detectors. The integrated optical components use a silica-on-silicon process technology.  Kymata is based in Livingston, Scotland.  
  
• Last month, Kymata acquired Total Micro Products (TMP), a developer of micro-electromechanical systems (MEMS) technology.  TMP’s products include cross-connect and silicon optical bench components, and pressure and flow sensors.   
  
• In September, Kymata announced a multi-million dollar optical component order from Marconi Communications.  The Kymata components are being used in Marconi's SmartPhotoniX DWDM systems for long haul, regional and metropolitan networks.

AT&T TO TEST NEC 160 CHANNEL DWDM SYSTEM
AT&T will test the NEC SpectralWave 160 as its next generation DWDM platform.  AT&T plans to begin deploying the system in Q2 2001, subject to successful completion of the trial.  The SpectralWave 160 will be capable of carrying up to 160 wavelengths of OC-192 for a total capacity of 1.6 Tbps on a single fiber.  http://www.nec.com/   http://www.att.com/
NEC, October 31, 2000

CINTA NAMES TELLABS EXEC AS CEO
Cinta, a startup developing optical networking systems, named John E. Vaughan as president and CEO.  Vaughan was most recently president of Tellabs Global Sales and Service.  He succeeds founding CEO Dr. Chien-Yu Kuo who now becomes the company's executive vice president and chief technology officer.  The company is based in San Jose, California.
http://www.cinta-corp.com
Cinta, October 31, 2000

• Cinta was founded in June 1999 by Dr. Chien-Yu Kuo and Dr. Tai Chen.  Its board of directors also includes Wu-Fu Chen.

INTEGRAL ACCESS NAMES LUCENT EXEC AS CEO
Integral Access, a start-up based in Chelmsford, Mass., named Jack Cicon as president and CEO.  Cicon most recently was responsible for managing Lucent Technologies’ strategic multi-service access products business unit. Integral Access founder Jeff Wake will now serve as full-time Chairman.  http://www.integralaccess.com/pr_10_30_00.htm
Integral Access, October 30, 2000

• Integral Access offers a “PurePacket" access system that supports circuit-switched voice, digital voice (PABX), Voice over DSL and Voice over IP (VoIP).  The system consists of a single- or multi-shelf solution for the Central Office or PoP that accommodates up to 1,000 DSL lines or 500 T1/E1 lines.  The system will support a range of interfaces, including POTS, xDSL, ISDN, DS-1, E1, NxDS-1 (MultiLink), NxE1 (MultiLink), DS-3, E3, STS-1, OC-3, STM-1, OC-12, STM-4, 10/100BaseT and Gigabit Ethernet.  The switch offers TR-08, GR-303, V5.2 connections.
  
• The company also plans to add optical interfaces to the system. The PurePacket platform will leverage an MPLS-based architecture to inter-operate with the control plane of DWDM core networks using the emerging Multi Protocol Lambda Switching standard.