LIGHTCONNECT DEVELOPS DIFFRACTIVE MEMS FOR HIGH PERFORMANCE, DYNAMIC OPTICAL APPLICATIONS
LIGHTCONNECT, a start-up based in Newark, California, introduced a proprietary “diffractive-MEMS” (micro electro-mechanical systems) technology that it plans to leverage for a series of high performance optical components, including Variable Optical Attenuators (VOA) and dynamic gain equalizers.  Unlike mirror-based MEMS that require large movements of small mirrors, LIGHTCONNECT’s diffractive MEMS approach requires motion of less than 0.4 microns of a ribbon surface built in standard CMOS.  The small movement or the ribbon yields a change in the wave properties of light.  The non-contact technology initially will be used in a single and 8-channel voltage controlled Variable Optical Attenuator (VOA) that is 1,000 times faster and nearly 90% smaller than current industry standard devices.  In addition, LIGHTCONNECT said its device would offer significant improvements in optical performance (response times, insertion loss, polarization dependent loss, polarization mode dispersion, power consumption etc.) and would be able to surpass trillions of attenuation cycles without any degradation.  LIGHTCONNECT will also use the technology in a dynamic gain equalizer for long haul DWDM systems.  The device would provide an electronically programmable continuous wavelength dependent attenuation to adjust all of the channels simultaneously.  The company plans to outsource high volume manufacturing of the diffractive MEMS devices to a standard silicon foundry.  LIGHTCONNECT is presently sampling the products to selected customers.  http://www.lightconnect.com
LIGHTCONNECT, July 2, 2001

• Diffractive MEMS technology was originally developed at Stanford University by Dr. David Bloom.  LIGHTCONNECT has been in stealth mode since it was founded in 1999.
   
• LIGHTCONNECT is headed by Dr. Peter Clark, who formerly served as President and CEO of Hitachi Semiconductor.
   
• In June, LIGHTCONNECT raised $8.4 million in series A financing from Sevin Rosen Funds, US Venture Partners, Morgenthaler, Intel Capital, Optical Capital Group, Supertex, Milton Change and Incubic.

TERABURST AND SYNERGY COMBINE WAVELENGTH SWITCHING WITH FREE-SPACE OPTICS
TeraBurst, a start-up based in Sunnyvale, California, announced a resale agreement with Virginia-based Synergy Telecommunications covering TeraBurst’s optical core switches and management system.  TeraBurst’s OMS systems complement Syntelco’s product line of free-space optics-based connectivity solutions for the optical last mile.  Syntelco’s free-space optics system offers capacities of up to 1.25 Gbps and does not require FCC licensing.  http://www.teraburst.com  http://www.syntelco.com
TeraBurst, July 2, 2001

• TeraBurst is developing a waveform switching technology that combines the benefits of OEO and OOO cross-connect technologies.  Its OMS 2200 platform is designed to switch wavelengths at line rates from OC-3 to OC-192.  The product will offer system capacity of up to 640 Gbps in a half-rack footprint.  TeraBurst’s OMS 2100 is a smaller version of the platform and features 200 Gbps capacity in a one-third rack footprint. 
   
• In March, TeraBurst raised $32.4 million in third round funding, bringing total financing to $51.4 million since it was founded in January 2000.  Investors include Tyco Ventures, Raza Ventures, Merrill Lynch Ventures LLC, Labrador Ventures and Satwik Fund. 
   
• TeraBurst is led by Ashok Jain, who previously was the founder and CEO of Internet Devices Inc., a developer of high-performance, data policy management systems, now a division of Alcatel.

SPECTRASWITCH INTRODUCES 2X2 LCD OPTICAL SWITCH
SpectraSwitch, a start-up based in Santa Rosa, California, introduced a 2x2 liquid crystal based optical switch.  The device features solid-state operation, bi-directional operation, non-blocking signal paths and fast switching speeds.  SpectraSwitch is already shipping the switch to major networking OEMs for trials.  http://www.spectraswitch.com/news_events/press_releases/6_28_01_2x2.htm
SpectraSwitch, June 28, 2001

• In March, SpectraSwitch introduced a 1x2 liquid crystal based optical switch suitable for provisioning, protection, and monitoring applications in fiber networks.  The solid-state, non-stick switch operates transparently to network protocols and bit rates.  The company said liquid-crystal technology provides competitive advantages in terms of reliability, low insertion loss, low polarization dependent loss (PDL), low cross talk over temperature and wavelength, and faster switching speeds than other technologies. 
   
• In December, SpectraSwitch named Lindsay Austin as its president and CEO.  Austin previously was vice-president and general manager of JDS Uniphase's Commercial Lasers Division.

UK REGULATORS TAKE FURTHER MEASURES TO SUPPORT LOCAL LOOP UNBUNDLING
OFTEL, the official regulator for the UK telecom industry, proposed four additional measures help reduce telecom competitors’ installation costs and clarify BT’s provision of facilities for local loop unbundling.  The four measures are:

• following a competitor's request, BT shall be required to install the competitor's equipment in any operational part of a BT exchange.
• a prohibition on BT from charging separately for site clearance when preparing co-location spaces in its exchanges.
• detailed guidelines on the co-location facilities including space that BT is obliged to provide and how BT should assess the availability of these facilities for other operators’ use; and
• prices for shared access to BT’s local loop. OFTEL is proposing an annual rental of £68 and connection charge of £127 per shared loop.
  http://www.oftel.co.uk/press/releases/2001/pr43_01.htm

OFTEL, June 27, 2001

• In March, OFTEL ordered BT to negotiate new wholesale leased line arrangements allowing other carriers to provide a wide range of dedicated telecommunications services.  Operators will be able to gain access to BT's leased lines network and therefore compete more effectively with BT and each other.  The order refers to ten operators that BT must negotiate new wholesale leased lines arrangements with, including Energis Communications, Cable & Wireless (Mercury), MCI WorldCom, Fibrenet (UK), Thus, Global Crossing (UK), GTS Network (Ireland), COLT Telecommunications, NeosCorp and MML Telecommunications.
   
• In February, BT published terms and conditions for local loop unbundling, including prices for the use of the local copper loop and the method for allocating space at BT exchanges.

WORLDCOM AND INTERMEDIA COMPLETE MERGER
WorldCom closed its acquisition of Intermedia Communications, which operates the “Digex” enterprise web-hosting business.  http://www.worldcom.com/about_the_company/press_releases/display.phtml?cr/20010701
WorldCom, July 1, 2001

• The WorldCom/Intermedia merger was first announced in September 2000.  The deal was valued at approximately $6 billion ($3 billion in equity and $3 billion in debt and preferred stock, Septermber 5, 2000 prices). 
   
• Intermedia operates one of the largest Frame Relay networks in the US, with more than 164 data switches in operation.  Its network uses Lucent/Ascend/Cascade ATM switches.  Intermedia has also begun deploying packet telephony from Sonus Networks, enabling it to handle wholesale, IP-based long distance traffic from international carriers.  At the time the merger was first announced, Digex had 673 corporate customers and 3,647 managed servers in operation, with average monthly revenue per server at $3,780.  Digex is a Cisco-Powered Network Application Infrastructure Provider.

GLOBAL CROSSING COMPLETES SALE OF ITS ILEC BUSINESS FOR $3B
Global Crossing completed the previously announced sale of its incumbent local exchange carrier (ILEC) business to Citizens Communications for approximately $3 billion in cash (after tax).  The business controlled approximately 1.1 million telephone access lines.  Global Crossing said the new funding further strengthens it financial position.  http://www.globalcrossing.com/pressreleases/pr_062901.htm
Global Crossing, June 29, 2001

• In June, Global Crossing completed its core network linking 27 countries and over 200 major cities in Europe, North America, South America and Asia.

AGERE SYSTEMS ANNOUNCES RESTRUCTURING
Citing the severe downturn in the semiconductor industry, Agere Systems announced a corporate restructuring that includes up to $900 million in charges for rationalizing manufacturing and a layoff of an additional 4,000 employees.  The company had previously announced a layoff or 2,000 employees in April. Agere's total workforce in March was approximately 18,500 employees.  The company now expects its Q2 revenues to be approximately $920 million, slightly below the lower end of the guidance, $950 million, provided in April.  http://www.agere.com/investor/webcast
Agere Systems, June 29, 2001