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AFC Stokes Up Startups

From the looks of its latest product announcements, Advanced Fibre Communications Inc. (AFC)'s (Nasdaq: AFCI) business development team has been busier than a one-armed stripper. Rather than take their time developing their own products to enter new markets, AFC's wheeler-dealers have sniffed out promising startups and secured reseller agreements or strategic investments in hopes of revenues down the road.

Indeed, their paw marks are all over AFC's partnership with Redfern Broadband Networks (RBN), through which AFC entered the optical access market this week by unveiling its new TransMAX 1500.

The TransMAX 1500 was designed and built by Redfern, which is an Australian-based startup backed by Corvis Corp. (Nasdaq: CORV) and several other investors. RBN supplies the product to AFC, which says it plans to manufacture the product itself in the future.

The new box is a tough, tiny optical add/drop multiplexer (ADM) that uses CWDM (coarse Wavelength Division Multiplexing (WDM)) technology to help carriers add capacity to their access networks (see AFC Takes On Access). The product was built to withstand the extreme temperatures of outside plants. RBN says the box can operate in temperatures as low as -40° Fahrenheit and as high as 149°.

This marks the second major product in a row from AFC that was initially developed by a startup. The company's Telliant 5000 box -- which combines ATM switching and DSL capabilities at the network edge -- was first built at AccessLan, a startup AFC invested in and later acquired (see AFC Acquires AccessLAN).

Similarly, AFC is an investor in Turin Networks Inc., a startup that is thought by many to have a bright future in the metro market. And AFC amassed a sizable war chest with its early investment in Cerent Corp., which resulted in a windfall of 5 million shares of Cisco Systems Inc. (Nasdaq: CSCO) when Cisco bought Cerent in 1999.

CWDM is a technology that can transport data economically because the optics used are less expensive than those in DWDM (dense WDM) systems. The tradeoff is that it can only shuttle data over shorter distances. That and the low cost makes CWDM-powered transport boxes ideal for access networks.

Besides the TransMAX 1500, RBN and AFC share another common link in John Schofield. [Ed. note: Blimey! RBN and Schofield both hail from Australia, the country that brought us Midnight Oil, Violet Crumble candy bars, and Paul Hogan. Well, two outta three ain't bad.] For about a year, beginning in March 2000, AFC president and CEO John Schofield sat on RBN's board, according to AFC. RBN won't comment on why Schofield left the board.

Though important for AFC, the TransMAX launch is a much bigger deal to RBN, which counts AFC as its first customer. RBN's business model is one where it distributes its technology through OEM partners. Neither AFC nor RBN would talk about how much money each company gets from the sale of every TransMAX system.

It's worth noting, too, that the deal with AFC isn't exclusive. Both AFC and RBN will be separately exhibiting the same basic technology under different names at NFOEC. And, as RBN gets more customers, other companies will be interested in reselling the product. RBN says it is targeting an Asian company as its next distributor but declined to give details.

But the TransMAX could be an important piece in AFC's portfolio. As RBN announced at Supercomm 2002 in June, the box can send up to 10 Gbit/s of data for a distance of about 40 kilometers. It supports up to four protected OC48 wavelengths on a single fiber or eight unprotected wavelengths on a fiber pair.

The TransMAX 1500 is 12 inches deep and about 1.75 inches high, so it fits in a single telco rack. It competes with similar products from White Rock Networks, LuxN Inc., and Ciena Corp. (Nasdaq: CIEN), though AFC says its box is more operationally similar to working with a Sonet ADM, making it easier to install and maintain.

AFC has real customers to back up its product claims. Volcano Telephone Company, an independent local exchange carrier in Pine Grove, Calif., is running the TransMAX on a four-node ring, three of which are in outside plant cabinets in the High Sierra mountains, where the average temperatures range from 32° degrees to 91° degrees Fahrenheit throughout the year.

Toledo, Ohio-based Buckeye TeleSystem Inc. is also using the TransMAX to provide point-to-point Gigabit Ethernet service over an existing fiber link between two nodes. It was the first Gigabit Ethernet deployment for AFC, according to Dan Parson, a senior manager in product planning for AFC. "That marked a nice milestone for us," he says.

— Phil Harvey, Senior Editor, Light Reading
www.lightreading.com
BobbyMax 12/4/2012 | 9:47:30 PM
re: AFC Stokes Up Startups AFC recently acquired AcessLan. This has not resulted any benefit to AFC. AFC is making the same mistakes as many other companies in the the
Telecom Sector. It is very risky to acquire start-ups as their product value and technology has not been validated by the market. Furthermore, it is waste of valuable resources.

It is very difficult to modify the acquireed products. The cost of doing business goes up considerably. In addition, the companies would not buy products.

slapshot89 12/4/2012 | 9:47:25 PM
re: AFC Stokes Up Startups Unlike BobbyMax, AFC has a longer term view of what the AccessLan acquisition will do for the overall revenue stream of the company. The plan is conservative and attainable. The feedback from the current customers is positive. It is still up to AFC to deliver the goods as far as feature content is concerned, but the business plan is sound.

Maybe BobbyMax should quit trying to make money shorting the stock and just get his work done. The easiest way to reduce OpEx is to lay people off.
gea 12/4/2012 | 9:47:24 PM
re: AFC Stokes Up Startups "Maybe BobbyMax should quit trying to make money shorting the stock and just get his work done."

Sorry. You're giving Bobby Max way too much credit. This character robotically badmouths every company and technology except Lucent. And after repeated exposure, it also becomes evident that his badmouthing consists of an almost stream-of-consciouness incoherent rambling. At times, I have suspected that he's actually some AI program out of Lucent that someone is operating as a sort of Turing test-like gag, to see if anyone notices he's not actually making any real sense.
BobbyMax 12/4/2012 | 9:46:58 PM
re: AFC Stokes Up Startups Dear Dr. "Gea":

Here you go again with your ignorance, poor upbringinfg,and poor manners and your hatred.
Gea, you have much expertise in your chosen field. I would suggest that you join a community College or a University to receive ciontinuing education.

You have not learnt from the business w2orld and academic world. "Dr Gea", May God give you wisdom to become a decent human being. You describe your ideas and opinion and let others express their views. Were you brought up in a very oppressive environment and nothing to enjoy you chilhood. Dr."Gea" you definitely show a very poor pedgree.
AAL5 12/4/2012 | 9:46:57 PM
re: AFC Stokes Up Startups Bobbymax (aka. HarveyMudd)

Again you are suggesting to people that they should continue their education, my education must also be sub-standard as I do not understand the meaning of the following terms mentioned in your post:

Gǣpoor upbringinfgGǥ
Gǣciontinuing educationGǥ
Gǣbusiness w2orldGǥ
GǣchilhoodGǥ
Gǣvery poor pedigreeGǥ

I would appreciate if an educated person such as yourself would enlighten me.

AAL5
Spaz 12/4/2012 | 9:46:49 PM
re: AFC Stokes Up Startups AAL5 wrote:

Bobbymax (aka. HarveyMudd)

Again you are suggesting to people that they should continue their education, my education must also be sub-standard as I do not understand the meaning of the following terms mentioned in your post:

Gǣpoor upbringinfgGǥ
Gǣciontinuing educationGǥ
Gǣbusiness w2orldGǥ
GǣchilhoodGǥ
Gǣvery poor pedigreeGǥ

I would appreciate if an educated person such as yourself would enlighten me.
________________________________

These are all obviously things that he learnt (sic) during his education.

spaz
dave77777 12/4/2012 | 9:46:49 PM
re: AFC Stokes Up Startups Your A.I. program needs a spell-checking subroutine.
rs50terra 12/4/2012 | 9:46:39 PM
re: AFC Stokes Up Startups Is there any chance to have people vent their frustrations elsewhere and stop the personal attacks?
Guys, if you are frustrated go jogging, play a good game of tenis or racketball and stop posting your hate mail.
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