RICHARDSON, Texas -- Covaro Networks Inc., an 18-month old company here, has some familiar faces and an interesting scheme to make Ethernet more manageable for service providers.

The company says its Etherjack technology, a combination of access hardware and management software, will create a demarcation point -- a line in the sand between the carrier providing service and the enterprise receiving it.

Carriers that provide Ethernet services have no such demarcation point now, and that creates a support headache when the connection between the CPE and the central office goes down, according to Hamid Rezaie, Covaro's VP of product planning.

To solve the problem, Covaro's building the CC-16000, an access box that extends Ethernet service into campuses, multitenant units, remote cabinets, etc. Covaro isn't providing technical specifics yet, but it seems the CC-16000 plugs into whatever TDM interface a carrier has, with Ethernet coming out the customer side.

While the CC-16000 is aimed at providing aggregated Ethernet links over fiber, Covaro is also building a smaller device called the CC-101, which works with the CC-16000 to extend Ethernet over Category 3 twisted pairs.

Both boxes will support software that gives carriers a means of monitoring and testing the connections to customer sites remotely.

Covaro says it is exploring the idea of making its technology available as an industry standard, once it starts selling its gear on a large scale. Or, it might pursue a way to license it to other vendors.

That's about all Covaro will divulge at this point. The company’s backers -- Sevin Rosen Funds, Center Point Venture Partners, and InterWest Partners -- are excited that they have an experienced crew at a post-bubble startup. "At this point in the company, there's almost a hyper-pragmatism," says John Adler, an InterWest partner on Covaro's board.

Covaro's staff includes several expatriates of Fujitsu Network Communications Inc. (FNC), Nortel Networks Corp. (NYSE/Toronto: NT), Alcatel SA (NYSE: ALA; Paris: CGEP:PA), and other companies in the Richardson Telecom Corridor (see Covaro Selects Operations VP). The company is led by Joe Bass, who was the CEO of Monterey Networks before it was sold to Cisco Systems Inc. (Nasdaq: CSCO) and ground into Alpo. Board member Jon Bayless was most recently CEO of Xtera Communications Inc., which still has a working Website.

About a year ago, the company raised a $16.7 million Series A funding round as Arriso Networks, but opted to change its name as it was too similar to Arris Group Inc. (Nasdaq: ARRS) (see Arriso Grabs $16.7M). Rumors abound as to how the company came up with the name "Covaro" -- most stories posit a sotted mispronunciation of "Cuervo," a popular tequila.

Covaro executives won't confirm the story. "Let's just say it took a lot of late nights to come up with a name," says Rezaie.

— Phil Harvey, Senior Editor, Light Reading