Monday, July 30, 2007

FCC Sets Rules for 700 MHz Spectrum

The FCC approved new rules for the 700 MHz band, which will become available for new services in 2009 as television broadcasters complete their DTV migration. In what is seen as a partial victory for Google and other Internet players, the FCC voted to require "open access" for devices and applications using services delivered in these bands, while not requiring carriers to sell wholesale capacity in the licensed spectrum. The FCC expects to commence an auction for this spectrum no later than January 2008.

The "open access" requirement would allow consumers to use the handset of their choice and download and use applications of their choice, subject to "reasonable network management requirements that allows the licensee to protect the network from harm."

The FCC also approved a framework for a 700 MHz Public Safety / Private Partnership between the licensee for one of the commercial spectrum blocks and the licensee for the public spectrum block. Under this arrangement, the Public Safety licensee will have priority access to the commercial spectrum in times of emergency, and the commercial licensee will have preemptible, secondary access to the public safety broadband spectrum.

Hammerhead Secures $18 Million for MultiService Switching

Hammerhead Systems secured $18 million Series D round of funding for its traffic aggregation and switching platform. Hammerhead said its HSX 6000 answers the need for traffic aggregation in a market in which Ethernet services are taking off and in which legacy services are also continuing to grow. Its single box solution offers dense Ethernet aggregation for both E-Line and E-LAN services, MPLS Pseudowire termination, VPLS, Leased Line IP Aggregation, Frame Relay and ATM/IMA support, and Any-to-Any Service Inter-working.

The new funding round was led by Foundation Capital and joined by all existing investors including Mayfield Fund, Enterprise Partners Venture Capital, Pequot Ventures, Silver Creek Ventures and Apex Venture Partners. Hammerhead Systems has raised $98 million in total capital to date.
  • In April, Hammerhead Systems announced plans for a PBT (Provider Backbone Transport) Service Gateway software capability for its HSX 6000 Layer 2.5 Aggregation Switch that will enable service providers to interwork PBT deployments with their MPLS backbones and growing VPLS installed base.

  • In April 2007, Hammerhead also enhanced its HSX 6000 platform with "Multi-Class" capabilities, enabling up to 6 different classes of service from a single customer VLAN attachment. Hammerhead's VPLS with Multi-Class is able to provide hierarchical QoS enforcement for segregating services. This enables service providers to more optimally match application requirements to pricing options at a fine-grained level.

Infinera Posts Q2 Revenue of $58.4 million

Infinera reported Q2 revenues of $58.4 million, compared to $49.2 million in the first quarter of 2007. Gross margins were 28% in Q2, compared to 24% in Q1. Including non-cash stock-based compensation and warrant revaluation expenses, the net loss was $26.1 million, or $1.10 per share, compared to a net loss of $19.8 million, or $2.62 per share, in the first quarter of 2007.

Infinera added five new customers in the quarter, bringing its total customer roster to 31.

"We are pleased with Infinera's second quarter performance -- our first quarter as a public company -- as it reflects our continued success in establishing ourselves as a leading systems company in the optical networking industry," said Jagdeep Singh, chief executive officer of Infinera.

Cox Selects Infinera for National Transport Backbone

Cox Communications, the third-largest cable company in the U.S., has selected an Infinera Digital Optical Network for its national transport network. The 12,000-mile Cox national build extends from coast to coast, supporting Cox's voice, video, data, and wireless services for residential and business customers. Financial terms were not disclosed.

Cox reports that traffic on its network has been doubling every 12 to 18 months.

Infinera said its DTN platform provides many benefits for multiple system cable operators (MSOs) seeking to move from traditional DWDM architectures to a converged network. These benefits include protection and digital multicast features, as well as digital ROADM functionality that integrates DWDM transport with sub-wavelength switching and reconfigurability. In addition, Infinera's GMPLS service intelligence promises operational savings in terms of cost and speed of network deployments.

Alcatel-Lucent Posts Q2 Revenue of EUR 4.33 Billion, Cites Integration Progress

Alcatel-Lucent reported Q2 revenues or EUR 4.326 billion, up 13% sequentially and 0.5% year-over year at a constant EUR/USD exchange rate. The adjusted gross profit was EUR 1,447 million, 33.4% of sales, including a positive impact of EU 34 million from a litigation settlement, compared to an adjusted pro-forma gross profit of EUR 1,711 million in the year-ago quarter. Adjusted operating income (loss) was EUR (19) million, (0.4)% of sales, compared with an adjusted pro-forma operating income (loss) of EUR 252 million in the year-ago quarter.

The gross margin was lower than expected, as it was negatively impacted by continued significant investments in key markets, an unfavorable product and geographic mix as well as some impact from product related transition costs as customers migrate their networks. However, the company forecast sequential revenue growth as the year progresses, which implies a strong ramp-up in the second half 2007.

Some highlights:

  • Revenue for the carrier business segment was Euro 3,104 million compared to Euro 3,367 million in the year-ago quarter, a 5% decline at a constant Euro/USD exchange rate, or an 8% decline at current rate.

  • Revenue for the wireline business group was Euro 1,505 million compared to Euro 1,460 million in the year-ago quarter, a 7% increase at a constant Euro/USD exchange rate, or a 3% increase at current rate.

  • Revenue for the wireless business group was Euro 1,237 million compared to Euro 1,396 million in the year-ago quarter, a 8% decline at a constant Euro/USD exchange rate, or a 11% decline at current rate.

  • Revenue for the convergence business group was Euro 362 million compared to Euro 511 million in the year-ago quarter, a 27% decline at a constant Euro/USD exchange rate, or a 29% decline at current rate.

  • Revenue for the enterprise business segment was Euro 376 million compared to Euro 368 million in the year-ago quarter, a 5% increase at a constant Euro/USD exchange rate, or a 2% increase at current rate.

  • Revenue for the services business segment was Euro 750 million compared to Euro 699 million in the year-ago quarter, a 11% increase at a constant Euro/USD exchange rate, or a 7% increase at current rate.

AT&T Launches "eMusic" Mobile Download Service

AT&T launched an over-the-air music download service with eMusic, a leading retailer of independent music. The eMusic over-the-air (OTA) service has a catalog of 2.7 million songs. Purchases are immediately sent to the user's wireless handset, and a duplicate copy is available for download to the user's PC at no charge. AT&T customers can subscribe to download five tracks a month for $7.49.

AT&T said the new service complements its existing mobile music offerings, which include the ability to transfer songs from a PC to a wireless handset from popular music subscription services such as Napster. And of course AT&T is supporting the iTunes store through its exclusive offering of the Apple iPhone.

Level 3 Provides Core Backbone for Leap's 3G Network

Level 3 Communications is providing core network backbone services for Leap Wireless' "Cricket" 3G service. This includes intercity private line trunks, voice termination and colocation facilities.

Specifically, Leap's Cricket service is using Level 3's Voice Termination service and Level 3 Intercity Private Line Services to connect its mobile switching centers to transport voice and data traffic over a single network. Additionally, Level 3 delivers this private line solution to Leap with cost effective Ethernet handoffs.

UTStarcom Verifies the Security of its IPTV DRM

UTStarcom completed a security audit of its IPTV DRM System. The security audit was commissioned by UTStarcom in June 2006 and completed in April 2007 by Merdan Group, Inc.

UTStarcom said the security audit concluded that all areas of its IPTV DRM System are robust at the "Criminal Enterprise Level," the highest rating, with the exception of one area involving the Set Top Box installation that was rated at the second highest rating of "University Challenge Level."

UTStarcom has no current plan to offer its DRM solution as a standalone product.

Ditech Improves Voice Quality for Brazil's "Oi"

Oi, the Brazilian carrier formerly known as Telemar, deployed Ditech Networks' Voice Quality Assurance (VQA) platform to ensure voice quality for users of its mobile phone network during the recent 2007 Pan American Games in Rio De Janeiro, Brazil. Ditech's VQA solution reduces background noise and echo on every call while simultaneously adjusting voice levels. Additionally, it allows Oi to better utilize speech compression technology, which is a cost-effective method to increase network capacity to support a surge in mobile phone users during the Games. More than 40,000 sports fans from around the world attended the Games.

Oi ("Hello" in Portuguese) provides mobile phone service to over 13.4 million customers throughout 16 states.
  • Telemar adopted the "Oi" brand in March 2007.

SyChip Launches 802.16e-2005 WiMAX Chip Module

SyChip, a subsidiary of Murata Manufacturing, launched its first mobile WiMAX (IEEE 802.16e- 2005) chip scale module for handheld manufacturers seeking to add WiMax functionality to devices such as handsets, ultra mobile personal computers, personal media players and personal navigational devices. SyChip is providing a BaseBand/MAC IC, a Radio Frequency (RF) transceiver, a Power Amplifier (PA) and on-board memory and matching components. The software suite includes drivers and Application Layer interfaces that will allow content providers, manufacturers and original equipment manufacturers to optimize their respective applications (VoIP, Video/Audio streaming), host interfaces (SDIO, SPI, Half Mini-card) and Operating Systems (Windows Mobile, Linux).

Intel Licenses SiRF's Location Technology for Mobile Devices

SiRF Technology signed a license and joint development agreement with Intel on certain future product platforms to help location and wireless connectivity become more mainstream in next generation mobile devices. As part of this agreement, SiRF has licensed certain technologies to Intel and will help co-develop certain future products that will be available for incorporation into Intel mobile platforms. The two companies also agreed to cooperate in the marketing and selling of these future products to customers developing a wide range of mobile devices worldwide.

SiRF develops semiconductors and software for location-awareness utilizing GPS and other location technologies, enhanced by wireless connectivity capabilities such as Bluetooth, for high-volume mobile consumer devices and commercial applications.

Apple's iTunes Store Tops Three Billion Songs

More than three billion songs have been purchased and downloaded from Apple's iTunes store, which now features a catalog of over five million songs, 550 television shows and 500 movies. Apple noted that iTunes recently surpassed Amazon and Target to become the third largest music retailer in the US.
  • In January 2007, Apple announced these milestones for its iTunes store: more than two billion songs, 50 million television episodes and over 1.3 million feature-length films have been purchased and downloaded.

AT&T to Invest $350 Million for Fiber Upgrades in North Carolina

AT&T announced plans to invest approximately $350 million throughout the next several years in fiber network upgrades, further broadband deployment and Internet-based technologies in North Carolina. The announcement does not change AT&T's capital expenditure guidance for 2007 and 2008. AT&T said it is in the process of implementing the AT&T U-verse network in the Southeast region and plans to provide a comprehensive update later this year.

ShoreTel Files Counterclaims Against Mitel

ShoreTel announced that it has filed counterclaims against Mitel Networks Corp. in response to Mitel's patent infringement lawsuit against ShoreTel.

In addition to denying all of Mitel's claims of patent infringement, ShoreTel alleges that Mitel's IP phone systems, including the Mitel 3300 IP Communications Platform, infringes ShoreTel's U.S. Patent No. 7,167,486 B2 entitled "Voice Traffic Through a Firewall." ShoreTel also filed claims for approximately $10 million in damages and an injunction against Mitel in Ontario Superior Court for making false or misleading statements about ShoreTel's alleged infringement, which were made on the eve of ShoreTel's initial public offering.
  • Last week, Mitel Networks announced that it had filed a lawsuit against ShoreTel Inc. in the U.S. District Court for the Eastern District of Texas, alleging infringement of four Mitel patents.

AT&T Launches Managed Firewall Service for SMBs

AT&T has begun offering a premises-based Cisco ASA option for its Managed Firewall portfolio. The service, which is aimed at small and medium-sized businesses, combines AT&T's firewall software solutions with scalable, end-to-end management, monitoring and maintenance. The customer can locate services such as those for Web access and electronic mail in the protected network and can control access to those servers.

The service is available through the AT&T BusinessDirect Web portal, which provides a single point to manage the customer's perimeter. The fully managed firewall service makes enforcement of customer's security policy an inherent part of the network across Intranet-, Extranet-, and Internet-based communications. The AT&T Premises -- Based Cisco ASA Firewall Option is available bundled with AT&T's Managed Internet Service or as a stand alone service to use on any internet service provider's connection.

Industry Reaction to FCC Decision

CTIA's Steve Largent" "The FCC's considerable deliberation over the 700 MHz auction rules has left us pleased in a number of respects and still concerned in others. Specifically, we believe the Commission has taken the appropriate approach by recognizing the importance of not restricting the number of auction entrants, nor requiring them to fulfill wholesale licensing requirements or requiring geographic build-out on all the licenses....At the same time, we are disappointed that a significant portion of this valuable spectrum will be encumbered with mandates that could significantly reduce the number of interested bidders. We remain committed to the principle that wireless consumers and American taxpayers are best served when such a valuable commodity is auctioned in a fair and competitive manner with no strings attached."

Consumer Electronics Association's (CEA's) Gary Shapiro: "With today's decision, consumers will soon enjoy the right to attach devices and download applications of their choosing to a portion of this spectrum. We urge the Commission to ensure that the auction of this spectrum remains on track so that consumers can quickly begin enjoying the benefits realized by the timely conclusion of the DTV transition."

Nokia's Olli-Pekka Kallasvuo: "Nokia believes that the Commission's rules are an important step towards meeting consumer demand and driving further innovation as mobility and the Internet converge. We commend the FCC and Chairman Martin for taking the initiative to promote even greater competition and innovation in the U.S. wireless industry."