Sources say AT&T Inc. (NYSE: T) is seriously considering VDSL-based technology for future Ethernet-over-copper deployments, a decision that could shift the balance among copper Ethernet startups.

What's interesting about the VDSL choice is that only one vendor is supplying that technology: Aktino Inc. Whether the startup has enough time to exploit that uniqueness is uncertain, though.

Other Ethernet-over-copper vendors support 2Base-TL, which is spelled out in the Institute of Electrical and Electronics Engineers Inc. (IEEE) 802.3ah standard for Ethernet in the First Mile and runs on the G.shdsl version of DSL. (See Aktino Dives Into Copper.)

Those vendors include two companies with ties to AT&T: Adtran Inc. (Nasdaq: ADTN), which won an Ethernet-over-copper request for proposals (RFP) in January, and Hatteras Networks Inc. , which last year scored a deal with BellSouth, now part of AT&T. (See Adtran Scores at AT&T and Copper Ethernet Snares an RBOC.)

Neither Adtran nor Hatteras seems in any immediate danger from VDSL, though. Michael Howard, principal analyst with Infonetics Research Inc. , notes that, while AT&T is believed to have VDSL-based Ethernet over copper in its future roadmap, "that's going to take a while to get to standards," with the first version not expected until the second quarter of 2008.

Aktino and AT&T declined to comment for this story.

Why does any of this matter, since Adtran presumably won the job? Because AT&T's choice could influence other carriers, changing the outlook for copper Ethernet. "If AT&T says they're going in some direction, I'm sure other people will follow," Howard says.

And the RFP that Adtran won reads as if the carrier has seen and liked Aktino's technology.

According to one source, who requested anonymity, the RFP says AT&T is interested in VDSL using discrete multitone (DMT) modulation and, to mitigate interference, multiple-input/multiple-output (MIMO) techniques. That happens to be the technology Aktino chose to pursue when it joined the Ethernet-over-copper field in 2003, well behind rivals such as Actelis Networks Inc. and Hatteras.

Aktino might not be alone in the VDSL camp for long, though. Actelis has VDSL-based gear in its plans, says Craig Easley, the company's associate vice president of marketing. "That's everybody's long-term direction," he says.

"There's time for all the players in this field. You can be sure Hatteras is going to protect its position as a leader in this field," says Chris Cook, Hatteras senior vice president of sales.

It's also worth noting that AT&T is a big place, and one RFP doesn't necessarily set the direction for the entire company. One source requesting anonymity notes the carrier has two outstanding RFPs for Ethernet over copper, one of which deals with long-reach and international cases that are well beyond the scope of the Adtran RFP, which covered U.S. territory only.

In any event, Aktino's position has gotten it noticed, as our first industry source says the startup has held recent meetings with major OEMs including Cisco Systems Inc. (Nasdaq: CSCO), which doesn't have any Ethernet-over-copper gear.

Cisco wouldn't comment on that, but the company says it's generally not interested in an Ethernet-over-copper acquisition. "Right now, we're sticking with our partnership strategy," says Mike Capuano, a Cisco senior marketing manager.

Hatteras is a part of that strategy. For about a year, Hatteras has been selling gear alongside a Cisco group that sells to non-ILEC clients such as Bay Area service provider Telekenex . It's not a formal partnership; rather, that Cisco unit refers interested customers to Hatteras. (See Telekenex Picks Hatteras.)

While Adtran isn't even confirming the AT&T win, it seems likely the company's Total Access 5000 would be the product line applied to the deal. The box isn't shipping in volume but has been in trials with a dozen customers, about a third of which came through with purchase orders late in 2006, says Kevin Morgan, Adtran's director of marketing for carrier networks. (See Adtran Touts Total Access.)

Competitors have questioned whether Adtran even has the technology to deliver Ethernet over copper, especially considering its Website doesn't list such modules for the Total Access 5000. But Morgan says Adtran's got the goods, including technologies like bonded copper, which combines copper Ethernet lines to boost bandwidth.

— Craig Matsumoto, West Coast Editor, Light Reading