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Cable/Video

World Wide Packets Bags $15.7M

Spokane-based World Wide Packets Inc. (WWP) will announce Monday that it has raised $15.7 million in a third funding round. The Ethernet access gear maker has raised $105.7 million to date since its inception in January 2000.

CEO David Curry says there will be a second close on the third round, one that will result in a "consequential" contribution to WWP's funding pile. The company's new investors include Madrona Venture Group and Northwest Venture Associates, which led the round. WWP says several existing investors also participated in the round, including Azure Capital Partners.

WWP will use the money to expand its sales force and to kickstart a more indirect business model and distribution system for its products. The company started out selling directly to U.S.-based municipalities and utilities (see World Wide Packets Wires Provo). Later, it expanded to target some European and Asian carriers, and now, according to Curry, WWP would like to work toward handling all sales and fulfillment through partners in some parts of the world (see World Wide Packets Launches in Europe).

Curry, one of WWP's original individual investors, became the company's CEO about a year and a half ago. WWP's outspoken founder, Bernard Daines, no longer has day-to-day responsibilities at the company.

Curry categorized WWP's latest financing as a "down round" and a "recapitilization," but declined to go into detail as to how significantly the earlier investors were diluted. "The initial capitalization of the company in 2000 reflected year 2000 valuations," he explains.

But the important part here is that WWP does have funding and can keep going. The last time Light Reading caught up with WWP, it was in the process of raising money while closing on three big deals in Europe with KPN Telecom NV (NYSE: KPN), Telewest Communications Networks plc (Nasdaq: TWSTY), and NTL Inc. (see World Wide Packets out of the Woods).

In the Telewest bid, WWP beat out several competitors including Atrica Inc., Cisco Systems Inc. (Nasdaq: CSCO), Foundry Networks Inc. (Nasdaq: FDRY), and Nortel Networks Corp. (NYSE/Toronto: NT).

WWP's product line includes a central office box -- the LightningEdge Access Distributor – which allows service providers to connect with subscribers over standard Gigabit Ethernet or 10-Gbit/s Ethernet links. It aggregates up to 120 standard Gigabit Ethernet connections from Access Portals or Access Concentrators.

At the subscriber end is the LightningEdge Access Portal, which has up to eight 10/100-Mbit/s Ethernet connections for PCs, IP phones, or other appliances. The Access Portal can support up to two POTS lines.

In between sits the Lightning Edge Access Concentrator, which aggregates up to 24 10/100-Mbit/s Ethernet connections, from either Access Portals or other Access Concentrators, on a single platform. That device connects to the LightningEdge Access Distributor via four, singlemode fiber Gigabit Ethernet links.

The whole kit is managed by the LightningEdge Network Supervisor, management and provisioning software allowing voice, video, and data to become provisioning options from the service provider to its subscriber base, rather than individual applications from separate providers (see Metro Ethernet).

WWP now has more than 60 customers for its gear worldwide. In 2004, the company says it expects to have a "steady stream of customer announcements" and that it will be more vocal on the active vs. passive access gear approaches. [Translation: They're kicking off a PR war against the PON vendors, WWP's main competitors.]

Curry says WWP was indeed one of the company's that sought Verizon Communications Inc. (NYSE: VZ) FTTP business, which was eventually awarded to Advanced Fibre Communications Inc. (AFC) (Nasdaq: AFCI). The decision came down to a "religious issue," he says. "It was largely a result of Verizon using APON to protect their legacy investment in ATM.

With appropriate irony, Verizon will use the new FTTP technology, built on legacy gear, in greenfield applications first.

What Curry can't seem to get is why PONs such as those built by AFC are still called passive. DLCs have active electronics, as do the customer premises devices receiving the bandwidth on the subscriber end of PONs. Wonders Curry: "What's this issue of carrier's saying they want no actives in the field?"

— Phil Harvey, Senior Editor, Light Reading

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truelight 12/5/2012 | 2:43:18 AM
re: World Wide Packets Bags $15.7M Mr Curry of WWP misunderstand on PON and active electronics access needs clarification. AFC can use PON from the CO and as well as from a remote DLC.

TL


BobbyMax 12/5/2012 | 2:43:11 AM
re: World Wide Packets Bags $15.7M It is not about bagging money. The WPP had a lot of problems with Alcatel which paid a lot of money to acquire WPP but was cheated as the product never worked. Verizon may not have given to WPP in view of its past history.
truelight 12/5/2012 | 2:42:59 AM
re: World Wide Packets Bags $15.7M WWP is not proven and is not a player in real telecom acces - you will see. RBOCs are for legacy players not new age companies.
bonnyman 12/5/2012 | 2:42:50 AM
re: World Wide Packets Bags $15.7M BobbyMax wrote:
"It is not about bagging money. The WPP had a lot of problems with Alcatel which paid a lot of money to acquire WPP but was cheated as the product never worked. Verizon may not have given to WPP in view of its past history."

then truelight wrote:
"WWP is not proven and is not a player in real telecom acces - you will see. RBOCs are for legacy players not new age companies."

Both posts puzzle me.

First, BobbyMax' post:
I'm not sure what Alcatel has to do with Worldwide Packets -- their FTTP products are very different (active vs. passive). Is there some history from several years ago that I'm not aware of? I haven't heard of any recent relationship -- I thought they were competitors.

Second, truelight's post:
Worldwide Packets has been shipping FTTP products longer than most FTTP vendors. Provo Power did an extensive field trial using WWP gear, then an evaluation of other vendors' products prior to further deployment. They were favorably impressed by WWP. Sounds like a proven product to me. There are other power utilities using WWP in FTTP deployments, also.

Since WWP's products are active, not passive, they don't fit the 3 largest Bells' stated FTTP requirements. But then you could legitimately argue that, so far, the "3 Amigos" are "not proven" FTTP providers and thy are "not ... players in real telecom access" (to use truelight's words).

A.B.
lightmaster 12/5/2012 | 2:42:47 AM
re: World Wide Packets Bags $15.7M I believe that Bobby was refering to Packet Engines, Daines previous Ethernet company which was aquired by Alcatel for around $300M. They later discontinued the product.

Depending on who you ask, either the product sucked and Alcatel got ripped off, or Alcatel ruined a great company. Either way, there is no love between Daines and Alcatel, and there were some disagreements on whether or not Daines was re-using some intellectual property that he sold to Alcatel.

I don't know if Packet Engines was a good company or not, but the trade show booth shaped like a train was certainly an interesting use of startup funding.

I have to laugh at Curry's complaint that they lost to APON because Verizon protecting their existing network was a "religious issue." Quite the opposite. It was a business issue that ignored Danies religious beliefs that resistance to Ethernet was "futile." The better technology does not always win. The company is trying to make a profit and is considering their overall costs, not just the cost of the equipment in question.

Expecting a company to throw away their existing network just because you have a better solution to one small part of that network...now THAT takes some religous faith.
technonerd 12/5/2012 | 2:42:46 AM
re: World Wide Packets Bags $15.7M Depending on who you ask, either the product sucked and Alcatel got ripped off, or Alcatel ruined a great company.
Maybe the product sucked, but I have some great little wooden train whistle thingies that Packet Engines used to hand out in the booth. Woo-hoo!
truelight 12/5/2012 | 2:42:41 AM
re: World Wide Packets Bags $15.7M My post puzzles you because you have no experience in access. Let me clarify for you ;-)

FTTP is nothing new it has been available of DLCs for many years and well before WWP came out of the closet. Active electronics in the loop is nothing new since this is exactly what a 3GDLC is as part of extending the CSA of a CO.

Sadly WWP offers no "new" alternatives to the RBOC that is more compelling than a DLC with a PON offering, which is the current percieved market. The DLC is also a lot cheaper and offers traditonal services without the 'packet' challenges.

If WWP customer validation is by a "utility" customers - mmmmm I cannot restrain myself from laughing.

If I don't get a higher rating for this "trump" then LR does not know anything about access either.

TL
bonnyman 12/5/2012 | 2:42:37 AM
re: World Wide Packets Bags $15.7M truelight wrote:
My post puzzles you because you have no experience in access. Let me clarify for you ;-)

FTTP is nothing new it has been available of DLCs for many years and well before WWP came out of the closet. Active electronics in the loop is nothing new since this is exactly what a 3GDLC is as part of extending the CSA of a CO.

Sadly WWP offers no "new" alternatives to the RBOC that is more compelling than a DLC with a PON offering, which is the current percieved market. The DLC is also a lot cheaper and offers traditonal services without the 'packet' challenges.


I'm not necessarily sticking up for WWP; my employer, Fiber Planners Inc., is officially vendor neutral.

Contrary to the comments above, offering high speed voice, data and video to the home is very new in North America -- just the last several years if you rule out a few dead-end demonstrations by the Bells in the 1980s and 1990s (such as Hunters Creek project in Florida that I went to as a fiber measurement vendor in 1989).

Whether the FTTP system uses a fully active concentrator between the customer and the CO (WWP), a passive splitter (Optical Solutions, Alloptic) or a hybrid (Wave7 Optics), they all offer full RF video services allowing subscribers to use existing CATV coax cabling within the house to receive full cable TV channel line-ups.

Don't even bother trying to offer FTTH in North America without offering at least fully equivalent programming and RF video to potential subscribers. (In countries without widely deployed CATV systems, RF video output capabilities may not be required.)

Has your DLC really been doing this "for many years"? I'm very interested in learning who's using this approach to FTTP -- can you provide some links?

If WWP customer validation is by a "utility" customers - mmmmm I cannot restrain myself from laughing.

Laugh all you want, but power utilities are major FTTP players worldwide. Here's a small sample:

Reykjavik Energy
Lyse Tel
Tokyo Electric
Grant County PUD
iProvo
BVUB
Jackson Energy

In the U.S., power utilities have deployed over half the FTTP lines. Worldwide, they probably account for about half. You can do a Google search of my weblog for "FTTH" or "FTTP" and generate your own list of companies building FTTx systems around the world:
http://communityfiber.blogspot...

Beyond that, power utilities have consistently used about 5% to 10% of the fiber cable produced in the U.S. for the last two decades. Your long distance calls likely travel over fibers, wavelengths or SONET circuits leased by a major carrier from power utilities. Con Edison is a major player in metro access in NYC. There are 4 fiber cable plants just in North America largely dedicated to supplying ADSS cable and/or optical groundwire to power utilities.

Our firm alone has done fiber work for over 60 power utilities since 1992:
http://www.fiberplanners.com/p...

Most of this has been fiber used for long-haul or metro use, but power utilities (primarily municipal utilities) have been aggressively moving into last mile access in the last several years using a mix of FTTH, power line broadband and wireless technologies.

If I don't get a higher rating for this "trump" then LR does not know anything about access either.

I don't come to this board to "trump" others but rather to learn as well as to share what I've learned in my own work.

Truelight I didn't learn much from your posts, but I gave your last post a 5 to make you feel good. Feel free to give my post a 1 if it makes you feel even better.

Have a nice day.

A.B.
truelight 12/5/2012 | 2:42:35 AM
re: World Wide Packets Bags $15.7M It's called light reading......not heavy reading so don't get to dedicated to your posts. If you think you are going to learn a lot on these message boards then oh boy, oh boy. My points still stand.

bonnyman 12/5/2012 | 2:42:29 AM
re: World Wide Packets Bags $15.7M truelight wrote

FTTP is nothing new it has been available of DLCs for many years and well before WWP came out of the closet. Active electronics in the loop is nothing new since this is exactly what a 3GDLC is as part of extending the CSA of a CO.

Sadly WWP offers no "new" alternatives to the RBOC that is more compelling than a DLC with a PON offering, which is the current percieved market. The DLC is also a lot cheaper and offers traditonal services without the 'packet' challenges.


Please post more information (or links) on how you're handling cable TV programming and services for FTTP with your 3GDLC approach you're advocating.

AB
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