Amidst the wreckage of Nortel Networks Ltd. 's bankruptcy, a technology green shoot was cultivated to create a new company specializing in wireless backhaul for Long Term Evolution (LTE) small cells.

That startup is BLiNQ Networks Inc. (See Startups Rush to Small-Cell Backhaul .)

Founded in June 2010, the company was extracted from Nortel's bankruptcy process, which involved getting legal clearance from various courts in Canada, France, the U.K., and U.S. Because it was a small deal -- that is, compared to the billions generated from the sale of Nortel assets to Avaya Inc. , Ciena Corp. (NYSE: CIEN), Ericsson AB (Nasdaq: ERIC) and Genband Inc. -- it was able to avoid getting tangled up in the bankruptcy asset auctions.

Indeed, BLiNQ was established much in the same way that other startups are carved out and spun off from big technology companies. But in BLiNQ's case, Nortel's bankruptcy and asset sales added a lot of complexity and legal effort to get the company started.

The origin of BLiNQ's wireless backhaul system was a project that started around 2007 in Nortel's WiMax technology development. Back then, the Canadian vendor was working on the potential for combined access and backhaul WiMax products (also known as in-band backhaul) and had concluded that out-of-band backhaul was a better solution.

"At the same time, the WiMax writing was on the wall," said Carleton (Mickey) Miller, BLiNQ's co-founder, president and CEO. Following that, Nortel filed for bankruptcy protection in January 2009.

It was just at that time that Nortel's M&A team got involved and brought in New Venture Partners LLC about the potential to commercialize the backhaul technology project. In the end, New Venture Partners, along with Summerhill Venture Partners and the Business Development Bank of Canada , provided US$7.4 million in Series A funding to BLiNQ, which was announced in February this year. (See BLiNQ Secures $7.4M .)

BLiNQ has 30 employees, of which about 11 are from the original Nortel team. "We wanted to take the key employees from Nortel, but we didn't want to recreate Nortel," said Miller.

As for Nortel's IPR, BLiNQ didn't get any of that, but it has licenses to some patents in the portfolio that was auctioned for $4.5 billion to the consortium comprising Apple Inc. (Nasdaq: AAPL), EMC Corp. (NYSE: EMC), Ericsson, Microsoft Corp. (Nasdaq: MSFT), BlackBerry and Sony Corp. (NYSE: SNE). (See Nortel Sells Patents for $4.5B.)

The pitch
BLiNQ's answer to small cell backhaul for LTE is a point-to-multipoint non-line-of-site wireless system that uses time division duplex (TDD) frequencies below 6GHz, which is spectrum that was originally earmarked for WiMax services. Such frequency bands include 2.3GHz, 2.5GHz or 3.5GHz. (See BLiNQ Backhauls Small Cells and BLiNQ Optimizes Backhaul.)

"It allows carriers to take a wasteland of spectrum and turn it into ... beachfront property," said Miller.

The system also has self-organizing network (SON) capabilities, such as interference management, through a technology the company calls Managed Adaptive Resource Allocation (MARA)..

Miller said BLiNQ plans to run a live trial of the system on its campus in Ottawa and hopes to start trials with operators later this year.

But there are likely to be some regulatory hurdles for BLiNQ's system. In some countries, spectrum such as 2.5GHz or 3.5GHz was licensed only for the purpose of providing broadband access services. Using these frequencies for backhaul may not be allowed in some markets. This is the case in Italy for the 3.5GHz band, for example.

— Michelle Donegan, European Editor, Light Reading Mobile