As service providers look for economical ways to feed the growing bandwidth requirements of their small and medium-sized business customers (SMBs), optical mesh vendor ClearMesh Networks today released its first product set. The Pasadena-based company says its Metro Grid solution will allow service providers to roll out cost-effective wireless networks offering speeds of 5 Mbit/s to 100 Mbit/s to small enterprises that are bumping against the limits of their current DSL or T1 connections.

"With high-bandwidth applications like VOIP or transparent LAN services, the overall requirements for bandwidth coming in to these small businesses is exceeding their T1 capacity," says ClearMesh senior vice president of sales and customer service Hitendra "Sonny" Soni. "Then the next step is either multiple T1s or you jump up to T3, which gets expensive very fast."

To date, serving this type of customer -- which represents a huge underserved market -- did not make financial sense with existing technology. "The demand for these high-bandwidth connections is absolutely understood and identified by the service providers both large and small. But the cost to bring that bandwidth to the customer, versus the revenue they could derive from the SMB customer, is very high."

Founded in 2001, ClearMesh is backed by Idealab and has Idealab founder Bill Gross on its board of directors. Suresh Nihalani, the president and CEO, was a founder and the CEO of broadband equipment vendor Accelerated Networks Inc. , which went public in 2000.

In order to avoid interference issues while providing high bandwidth levels, the company has focused on infrared frequencies rather than radio-frequency wireless technology, which serve the bulk of mesh networks including WiFi. Using optical wireless carries with it some limitations -- namely that all nodes must have line-of-sight connections to their neighboring nodes. ClearMesh specifies a range of 250 meters between nodes on its network, meaning that the system works best in dense deployments such as downtown city buildings and industrial parks.

"Weather affects the system," acknowledges ClearMesh senior vice president of marketing Fima Vaisman. "Rain does not affect it, neither does snow, but fog does, and that's why we've limited the range to 250 meters. This system can operate effectively in quarter-mile visibility, which shuts down airports."

Free-space optics providers like ClearMesh have had a tough go of establishing wireless networks, mostly due to a combination of high prices, complex implementation challenges, and inconsistent demand. ClearMesh has attempted to solve those problems by keeping prices low -- an installed node will cost around $5,000, according to Vaisman: "With that kind of pricing the service providers can compete with incumbent T1 services, but with a much higher bandwidth service."

"ClearMesh seems to address a couple of those early shortcomings," says Heavy Reading chief analyst Scott Clavenna, "namely by getting the price down under $6,000, basing the switching on Ethernet, and implementing a mesh-based algorithm that lets a service provider build a network with these rather than just extending links."

That being said, ClearMesh officials stress that their system is complementary to current fiber optic and WiFi networks as well as emerging WiMax technology.

"We believe that WiMax provides an excellent solution for multiple T1 replacement," says Soni. "It's well and good for wider coverage areas -- WiMax is more for reach than bandwidth, while our solution is more for bandwidth than for reach."

One implementation foreseen by ClearMesh is using a building with fiber to the premises as an effective point-of-presence, from which the metro grid network can feed other nearby buildings with high-bandwidth connections, wirelessly. The cost of establishing a ClearMesh network is a fraction of digging trenches and stringing buildings with fiber optic cable.

ClearMesh faces stiff competition from cable MSOs offering hybrid fiber-coax networks, as well as service providers offering wireline solutions such as "bonded" DSL or low-cost T1 and T3 lines. The experience of ClearMesh itself in establishing a high-speed connection to its office in Pasadena is indicative of the market opportunity, however.

"We went to Time Warner Telecom and said, 'We have 40 people, and we could really use 20 Mbits,' " says Vaisman. "They said, 'Hey you're in luck, we've got fiber just three blocks away, it'll take us three months and $120,000 to do that. So you give us $3,000 a month for a four-year commitment and we'll start digging.'

"We said, 'We're a small company, not a bank!' "

— Richard Martin, Senior Editor, Unstrung