• Last August, Sphera Optical Networks (previously Millennium Optical Networks) announced $70 million in funding from the Mayfield Fund, Soros Private Equity Partners, Pequot Capital Management, Oak Investments Partners and Worldview Technology Partners.
• Sphera Optical Networks is headed by Harold Grossnickle, who previously served as President of Global Crossing’s worldwide operations and maintenance organization.

FLAG TELECOM WITHDRAWS AS CO-DEVELOPER OF 7.8 TBPS TRANSPACIFIC CABLE
FLAG Telecom will withdraw as co-developer of a high-capacity transpacific cable network – a project originally launched in partnership with TyCom.  FLAG Telecom did not obtain financing for the project on satisfactory terms.  TyCom will proceed alone with deployment of the system as originally planned.  The ready-for-service date of TyCom Transpacific remains unchanged, with first commercial traffic expected by Q2 2002.  The network will span 24,100 km, connecting Japan with the west coast of the US and then returning to Asia via Hawaii and Guam.  The 8-fiber pair architecture will use both 64- and 96-channel DWDM transmission technology and provide a system design capacity of 7.8 Tbps.  The TyCom Global Network (TGN) will also connect to other Asian countries including South Korea, the Philippines, China, Singapore, Taiwan and Hong Kong.  http://www.tycomltd.com/press_80701.html
TyCom, August 7, 2001

DORADO TO DEVELOP BANDWIDTH TRADING/PROVISION SOFTWARE FOR ENRON BROADBAND SERVICES
Dorado Software will develop software for Enron Broadband Services that would help service providers to trade bandwidth, or trade the space available for content to be delivered over the Internet.  Enron will utilize Dorado Software's Redcell Provision Optical and Redcell B-Trade products for dynamic control of its bandwidth pooling points worldwide.  Dorado’s Redcell Provision will be used to execute the trades against the all-optical network infrastructure.  Dorado's products will initially include Redcell Device Drivers to control optical networking products from Sycamore and Lucent Technologies.  Financial terms were not disclosed.  http://www.doradosoftware.com
Dorado Software, August 7, 2001

RSA SECURITY UNVEILS CRYPTOGRAPHIC SOFTWARE FOR CABLE MODEMS AND SET-TOP BOXES
RSA Security introduced cryptographic software designed for cable broadband devices -- including cable modems, set-top boxes and multimedia terminal adapters.  The software would allow manufacturers to embed public key infrastructure (PKI) and encryption technology into cable broadband devices to meet the authentication and confidentiality requirements for CableLabs DOCSIS 1.1 certification.  http://www.rsasecurity.com/news/pr/010807.html
RSA Security, August 7, 2001

GOTHAM TO USE XILINX FPGAS FOR ITS “SWITCHLESS SWITCH”
Gotham Networks is using Xilinx’s Virtex Platform FPGAs rather than ASICs for its software-configurable switching and routing products.  Gotham uses the FPGAs for data path, control logic, SAR functions, classification, header manipulation and QoS.  http://www.xilinx.com/prs_rls/0168gotham.htm
Xilinx, August 7, 2001

• Gotham’s “Switchless Switch” architecture differs from conventional edge routers/switches by eliminating the need for a centralized switching fabric.  Instead, the design uses a distributed, fully interconnected, non-blocking mesh architecture where every card in the chassis is connected to every other card.  Gotham’s key design element is a Universal Service Card that provides switching, control, and protocol processing all on a single, multi-function board.  The carrier-class platform supports both WAN and LAN interfaces; Layer 2 switching for ATM, Frame Relay, permanent and switched virtual circuits; and Layer 3 routing for RIP, OSPF, BGP and MPLS.

SIEMENS TO RESELL ADVA’S FIBER SERVICE PLATFORM
Siemens Information and Communication Networks (ICN) agreed to resell ADVA's Fiber Service Platform under its own TransXpress WaveLine brand.  In particular, ADVA's FSP 3000 will be branded as part of Siemens’ next-generation Waveline product range for metro service providers and enterprises.  All current and future FSP products are included in this agreement, which expands on previous resale partnerships between the firms. http://www.advaoptical.com/adva_press.asp?id=66&action=view&msgid=89
ADVA, August 7, 2001

LIGHTCROSS RAISES $30 MILLION FOR PASSIVE OPTICAL COMPONENTS
LightCross, a start-up based in Monterey Park, California, closed $30 million in second round venture financing to support its development of integrated optical components.  The company is developing high-performance and monolithically integrated passive and tunable optical networking components and subsystems using standard IC equipment and facilities.  The funding was led by UMC Capital, the venture capital arm of United Microelectronics Corporation (UMC) of Taiwan.  LightCross has also agreed to use UMC’s proprietary technology to manufacture integrated photonics components and subsystems at UMC's advanced foundry facilities.  Additional investors include ComVentures, ARCH Venture Partners, JP Morgan Partners, Asia Optical Technology Co., RiTEK Corporation, and a number of prominent individuals from the telecom and semiconductor industries.  http://www.lightcross.com
LightCross, August 7, 2001

• LightCross was founded by Dr. Chi Wu, who was previously a researcher with the Jet Propulsion Laboratories and the California Institute of Technology, and Dr. Wenhua Lin, who previously was in the Optical Networking group at Bell Labs.

KENETEC SECURES $12 MILLION FOR BROADBAND ACCESS SYSTEMS
Kenetec, a start-up based in Naugatuck, Connecticut, raised $12 million in its second institutional round of funding for its development of broadband access systems.  The company is working on an IP and ATM-based access platform for the multi-tenant unit (MTU) market.  http://www.kenetec.com
Kenetec, August 7, 2001

• Kenetec is headed by Dr. Kuldip Bains, who formerly served with General DataComm.

COVAD TO FILE FOR CHAPTER 11, ELIMINATE DEBT AND SEEK NEW FUNDING
Covad Communications Group plans to file a pre-negotiated plan of reorganization and voluntary petition to reorganize under Chapter 11 of the U.S. Bankruptcy Code by mid-August 2001.  The company is negotiating with its bondholders to eliminate approximately $1.4 billion of existing debt.  Bondholders representing a majority of the outstanding accreted value of the bonds have agreed to terms of a proposed debt restructuring.  Under the terms of the proposed restructuring, the bondholders would exchange their bonds for a combination of cash and preferred stock.  The cash portion consists of $0.19 on the dollar for the face amount of the accreted value of both high-yield and convertible bonds.  In addition, the company expects to return all of the approximately $26.5 million in restricted cash reserved to the holders of its 12.5% bonds.  After a cash payout of $283 million, Covad would have approximately $250 million in cash, which is expected to fund the company's operations into the beginning of 2002.  Covad believes it would need an additional $200 million more in cash to get to a positive cash flow position, which it forecasts by Q3 2003.  http://www.covad.com
Covad Communications, August 7, 2001

CISCO REPORTS QUARTERLY SALES OF $4.3 BILLION, DOWN 25% FROM LAST YEAR
Cisco Systems reported quarterly net sales of $4.3 billion, down 9% from the $4.7 billion of the preceding quarter, and down 25% compared with $5.7 billion for the same period last year.  Pro forma net income for the quarter was $163 million or $0.02 per share, down 86% compared with pro forma net income of $1.2 billion or $0.16 per share for the same period last year.  For Cisco’s full fiscal year 2001 net sales were $22.3 billion, up 18% compared with $18.9 billion for fiscal 2000.  Actual net loss for fiscal 2001 was $1 billion or $0.14 per share. http://www.cisco.com
Cisco Systems, August 7, 2001

A web cast of Cisco Systems’ quarterly conference call, including industry outlook and financial guidance, is available online at http://investor.cisco.com/ireye/ir_site.zhtml?ticker=CSCO&script=1100

Some highlights of Cisco's comments from the conference call:

• Cisco does not believe the industry has “hit bottom” yet, although it is cautiously optimistic that things will start to improve in the US in the next 2 quarters.  In Europe and Asia things could get worse before they get better.

• The service provider market is rapidly consolidating from thousands of players to a handful of providers in each market. 

• Cisco expects revenue growth for next quarter to be flat to down 5%.

• Cisco significantly reduced its inventory of excess components.