LuxN Inc. has won a deal with Yipes Communications Inc., one month after it announced a multimillion dollar deal with Time Warner Inc. (NYSE: TWX) (see LuxN: New Customer, New Product).

Yipes has aggreed to buy LuxN's metro and access optical transport equipment. The decision was largely driven by LuxN's management software, the Optical Service Level Management (OSLM) platform, according to Yipes officials.

OLSM is based on what LuxN calls ColorSIM technology, a patented and proprietary scheme for taking out samples of an optical signal and monitoring the bits traveling through the connection.

Ron Young, a founder of Yipes and its chief marketing officer, says that other WDM (wavelength-division multiplexing) equipment doesn't monitor traffic once it is has been converted to light -- it has to convert it back to electrical signals to measure the bits. Constant measurement of traffic is crucial to service providers because it allows them to charge customers according to what they have used.

“Nobody else can do this. They are measuring bits on a wavelength without having to go out of band,” says Young.Terms of the deal haven’t been disclosed, but Young says the two companies have been working together for several months and will continue to jointly develop technology. Yipes, which has expanded its network to 20 cities in 21 months, will use LuxN’s WDM transport equipment, including its WS 3234 (WavStation), WS3217 (WavFarer), and WS 3208 products, to add more capacity to its regional Ethernet networks.

Yipes leases fiber from a local provider in a given market and then builds an Ethernet infrastructure using the leased fiber, which it sells as a service to customers. Until now, Yipes has not used WDM at all to add capacity. But Young says the time is approaching for Yipes to evaluate it as a way to conserve the fiber strands already on its network.

Some analysts are skeptical of LuxN's technology. "It’s hard to believe that you can measure bit error rate, when you’re not actually measuring bits,” says Ron Kline a senior analyst for optical transport with RHK Inc.. "I’ve never quite been able to grasp how LuxN is able to do it. But if it works, it is a significant breakthrough; no one else is doing this.”

Yipes is currently still testing the LuxN gear and the management platform and expects to deploy them both for commercial use by mid-year. As for LuxN’s ColorSIM technology, the company says it is looking into leasing the patent to competitors as well as testing companies.

- Marguerite Reardon, Senior Editor, Light Reading
http://www.lightreading.com