All of a sudden, Dynamic Spectrum Management (DSM), a technology that helps DSL lines run faster, is hot news.

First, the Ismart consortium picked up a Light Reading Top Pick award for its DSM developments. (See Light Reading Reveals Its 2009 Top Picks and ECI, Actelis Validate DSM.)

Now Assia Inc. , the DSM pioneer led by DSL authority John Cioffi, has raised $10 million to fund new developments and expansion.

Assia has developed DSM Level 1 software that helps operators manage their DSL lines more efficiently (to increase speeds and reach). The company says its software helps carriers increase the average downstream speeds of their ADSL lines by 40 percent. (See Assia Makes DSL Greener.)

Now it's looking to advance that technology to make even greater efficiency gains in current and next-generation broadband networks that use VDSL2 technology.

That development is important. In order to compete with fiber-to-the-home and cable's Docsis 3.0 technology, DSL network operators need to find ways to offer downstream speeds of up to 100 Mbit/s on today's copper plant. Helping those DSL players represents a significant opportunity, as there are about 300 million DSL broadband lines in operation worldwide, representing about two-thirds of the world's broadband lines.

Assia's story is clearly capturing operators' attention, as it's largely the carrier community that's putting its money and faith behind the company. Along with the Mingly China Growth Fund, SFR Development, the financing arm of French carrier SFR , is the new backer in this round, which also includes prior investors Swisscom AG (NYSE: SCM) (Swisscom Ventures), T-Venture (the finance arm of Deutsche Telekom AG (NYSE: DT)), and Stanford University , where Cioffi, Assia's chairman and CEO, is a professor.

Assia isn't what you'd call a startup, though. It was formed in 2003 and has a number of customers in North America and Europe, including AT&T Inc. (NYSE: T) and the U.K.'s Sky , with 23 million DSL lines under the management of its DSM Level 1 software, called DSL Expresse. (See Sky Deploys Assia's DSM.)

"We had to convince the service providers we have something that can help with their broadband networks in the future. They're considering spending billions of dollars on their access infrastructure in the coming years... [Assia's] story can play if we have good credibility, which I think we do," Cioffi tells Light Reading.

Now, after a number of years of steady but conservative development, Cioffi feels it's time to up the pace, and he has another $10 million to $15 million in additional funding lined up, including investments from new carrier partners, should the company need it.

The new funds are being plowed into two specific developments. The first is DSM Level 3, or "vectoring," which, in theory, will help boost VDSL2 line speeds to 100 Mbit/s downstream and 50 Mbit/s upstream. Assia is already working with chip vendor Ikanos Communications Inc. (Nasdaq: IKAN) on that development, which is expected to result in commercial products in 2011 or 2012, "if everyone does the best they can." (See Ikanos Picks Partners.)

Cioffi notes that other companies, such as Broadcom Corp. (Nasdaq: BRCM) and Infineon Technologies AG (NYSE/Frankfurt: IFX), as well as the Ismart consortium, are also developing DSM Level 3 products, and he's encouraged by that because "what Assia does is slightly different -- we would manage the technologies those companies are developing. They're working on the hardware... We've had discussions about management interfaces" with those companies.

The second development is for software that helps manage DSL connections from the customer premises side rather than the network side that DSM addresses. Assia is developing a tool that enables operators to talk to DSL customer premises equipment (CPE) over the public Internet to identify and address problems that affect broadband line speeds. "About 80 percent of DSL problems are on the customer side, and those can't be solved with DSM," says Cioffi.

Those developments needed more money than DSL Expresse is currently generating: Assia is generating more than $10 million a year in revenues, and while the company is cashflow positive, the business wasn’t big enough to fund the next developments on its own, says Cioffi.

The new investment will help Assia grow from its current 45 headcount and open R&D facilities in Europe and possibly Asia/Pacific, as well as work more closely with its new partners and existing customers. Cioffi says his company's technology is already deployed in China, managing about 200,000 lines.

In the meantime, Cioffi says Assia's first product, which, effectively, remotely manages DSL lines for optimum performance by dynamically "re-profiling" them to deal with crosstalk and other interference, is set to be deployed on a much broader scale in the near term. "The installed base will grow from 23 million to more than 40 million in the next nine to 18 months. In a few years time there will be only a small percentage of DSL lines in North America that are not managed by Assia."

So is there any competition? Cioffi says Assia is "unique," yet he admits that he has had to compete in RFPs, and that a certain rival has "pushed down our prices, though we have won the deals."

It turns out that rival is Alcatel-Lucent (NYSE: ALU), which, while working on its own DSM developments behind the scenes, has been marketing its Smart DSL product as an alternative. (See AlcaLu Develops 'SmartDSL' and AlcaLu Paints Its MSAN Green.)

Cioffi is somewhat scathing about AlcaLu's efforts, and the 5530 Network Analyzer product that incorporates the Smart DSL capabilities. "It may become more of a competitor in the future, but I have heard from contacts that the 5530 is not yet functional and that it's tough to install," says the Assia man, before adding matter-of-factly that of all the lines Assia's technology currently manages, the vast majority are AlcaLu DSL lines.

— Ray Le Maistre, International News Editor, Light Reading