Ciena Backs Off BLCs

Ciena Corp. (Nasdaq: CIEN) is backing off the broadband loop carrier market, but the company isn't abandoning broadband altogether.

What is happening is that the company is placing a lot less emphasis these days on the monstrous CN1000, the broadband loop carrier it got when Ciena bought Catena Networks for more than $480 million in stock. (See Ciena Buys More Than Catena .) That product combined a DSLAM, a fiber multiplexer, a VOIP media gateway into one big box that could provide triple-play services over a carrier's existing copper network.

This time last year Ciena was aiming to make inroads with the RBOCs with the product and it was hoping to get some interest from carriers overseas as well. What a difference a year makes.

Last week, Ciena told analysts it would cap further investment in the CN1000 and it would narrow the product's focus to targeting U.S.-based CLECs, especially those collocating inside an RBOC's territory.

Those CLECs are now reselling services through an incumbent carrier's facilities, but are also building out their own access networks. They can use a device like the CN1000 to switch customers from the old network to the new, line by line, according to Malcolm Loro, director of product marketing at Ciena. Those carriers can also use the CN1000 to introduce VOIP services line by line without changing any gear at the customer's premises.

"The big carriers have not adopted a BLC architecture in their next-generation network planning," Loro explains. "But we're not discontinuing the product."

Sources close to Ciena say the CN1000 never lived up to its billing from a technology standpoint. "It was not an IP or Ethernet-based technology," says one source. And, despite the CN1000's initial billing as a triple-play device, one source says the product's switch fabric "just wasn't built to support video."

But even though the CN1000 was a bust, Ciena still has inroads into carrier access networks via its CNX-5, a line card that DSL-enables old digital loop carriers. Originally, the CNX-5PLus was called the CNX-100. (See Ciena Debuts New Look, New Message.)

The CNX-5Plus is a DSLAM that can fit in a cabinet with a DLC to extend the life of the device and provide high-rate DSL to customers. The CNX-5Plus is an ATM DSLAM, but with a card upgrade carriers can add a gigabit Ethernet interface, Ciena says.

Ciena's change of heart in broadband access is being reflected in the company's corporate structure, too. According to insiders, the Broadband Access group, which brought in $26 million in revenues during Q3, now reports to CTO Steve Alexander. James Frodsham, who was the senior VP and general manager of the broadband access group has been reassigned.

And, though not everyone in Ciena's Ottawa office works in broadband access, the company did cull 119 from an Ottawa facility over the summer. (See Ciena Boasts French Fancier.)

— Phil Harvey, News Editor, Light Reading