Celite Scores $10M More

Celite Systems Inc. announced today that it has bagged a $10 million Series B funding round (see Celite Systems Gets $10M). The Austin-based access equipment maker is still attracting funds for its broadband scheme, which borrows from the economics of cable TV service while using the infrastructure of traditional DSL.

The company is somewhat controversial in its approach, but that hasn't scared off investors. Celite has raised more than $26 million since it was founded in July 2001 by CEO Roger Dorf and chief technology officer Celite Milbrandt.

The startup's solution requires a carrier to install one of Celite's DSL Headends at its serving area interface (SAI) -- the cabinet or remote box that connects a carrier's central office lines to the wires that lead to the customer's premises. The DSL Headend connects to the central office gear using several bonded ADSL uplinks or T1 uplinks. On the customer premises end, Celite's solution requires a specially made modem for each broadband subscriber served by the DSL Headend.

To provide the broadband service itself, Celite is making use of its own technology, called broadcast DSL (BDSL). Celite's gear provisions broadband service to an entire neighborhood (or multi-dwelling unit) at one time, as would a cable headend (see Celite Provisions DSL to MDUs). The difference is that it all happens over a traditional telecom infrastructure. The Celite-provided broadband contrasts with ADSL, which requires a dedicated DSLAM or NGDLC port, a new crossconnect jumper wire, and some software provisioning just to provide each subscriber with service.

While ADSL costs the same to provision for the thousandth subscriber as it does for the tenth, Celite's marketing materials suggest that its broadband service gets cheaper as more people are served from the same DSL Headend. In other words, they claim to have found a way to achieve cable MSO economics over a copper-pair plant.

In addition to making broadband service cheaper to deploy in large numbers, Celite argues its solution gives carriers a broader menu of services. Theoretically, carriers can charge less for the best-effort broadband service offered through the DSL Headend platforms, while those subscribers willing to pay a premium for faster, dedicated connections can continue to be served over the existing ADSL infrastructure, which Celite's equipment apparently doesn't interfere with.

Of course, there are several drawbacks with Celite's approach. First of all, the company has no reference accounts it can speak of yet, so it can't say for sure what carriers can really save (and charge) using its gear. Also, the proprietary technology connecting the DSL Headend and the customer premises, as well as the requirement for a proprietary modem, is sure to be a clay pigeon that broadband DLC makers will enjoy shooting at.

That said, Celite does claim to have "lab and field trials in place in the U.S., Latin America, and Europe," according to a press release. Unfortunately, after issuing a press release and actively seeking publicity, Celite's managers were too busy to actually talk to the press, so Light Reading was unable to get many more details than that.

— Phil Harvey, Senior Editor, Light Reading