Internet Photonics Notches Telco Win
The news is significant as a customer announcement for a growing startup, but it's even more interesting considering that Internet Photonics' gear uses coarse wavelength-division multiplexing (CWDM) as a transport to provide Ethernet connectivity.
CWDM, which uses less expensive lasers to transmit traffic, is often thought of as a cheaper, shorter-range version of dense wavelength-division multiplexing. Some people estimate it undercuts the cost of deploying DWDM by about 30 to 40 percent. This announcement may indicate that carriers are increasingly looking at the technology to cut costs. (For more on CWDM, see the Light Reading report: CWDM: Low-Cost Capacity.)
“This announcement is further evidence that CWDM is really carrier-class,” says Patrick Matthews, senior analyst for Yankee Group. “It’s really good news for the technology in general to see more telco wins.”
Up to this point, interoperability and scaleability issues have kept many carriers from actually deploying CWDM. But things are starting to change. Earlier this month the International Telecommunication Union, Standardization Sector (ITU-T) standardized a specification that will allow gear from multiple vendors to interoperate (see CWDM Gets a Boost). Details of the contract aren't available. TDS Metrocom, which is the competitive subsidiary of rural telecom provider Telephone & Data Systems Inc. (Amex: TDS) is using Internet Photonics’ CWDM-based product to provide Layer 1 optical Ethernet wavelength services to residential, business, and service provider customers in its region. The service will be an alternative to existing T1 and T3 managed services. The initial rollout will begin in Wisconsin and will eventually include the other two states in the TDS Metrocom region, Michigan and Illinois. TDS Metrocom has built its own infrastructure. It serves roughly 250,000 installed lines and competes directly with local Bell operator, SBC Communications Inc. (NYSE: SBC).
The new service, available now, is being offered in direct competition to a similar service provided by SBC: SBC's GigaMAN service uses CWDM gear from Nortel Networks Corp. (NYSE/Toronto: NT) (see SBC's Wavelength Wonder). Unlike SBC's service, TDS's MegaDATA (100 Mbit/s) and GigaDATA (1 Gbit/s) services are protected and managed. This means that instead of purchasing a best-effort service, TDS Metrocom customers will be given service guarantees on performance and uptime.
The Internet Photonics gear is what makes this protection possible, says Ben Goth, data product manager for TDS Metrocom. It can detect when an optical signal is fading, and switch to an alternate path or fiber without any interruption to the service. Goth notes that traditional Sonet systems only begin to recover when they sense that the signal is completely gone, which results in longer recovery times.
“When moving gigabits-worth of data, any downtime can be catastrophic to our customers,” says Goth. “They can’t afford to have unprotected or unmanaged links between locations.”
Internet Photonics has already announced several customer wins. Most of these have been cable providers like Adelphia Communications Corp. (Nasdaq: ADLAC), Buckeye CableSystem, and Cablevision Systems Corp. (NYSE: CVC). It’s also announced telecom provider, FiberNet Telecom Group Inc. (Nasdaq: FTGX) (see Internet Photonics Scores at FiberNet).
Internet Photonics hopes the latest customer win will put it in the mix with the big players that are combining Ethernet technology, DWDM, and CWDM in their metro networking gear.
Yankee Group ranks Internet Photonics fifth behind Nortel Networks Corp. (NYSE/Toronto: NT), Cisco Systems Inc. (Nasdaq: CSCO), ADVA AG Optical Networking (Frankfurt: ADV), and Alcatel SA (NYSE: ALA; Paris: CGEP:PA) -- in that order -- in overall optical Ethernet market share for 2002. Matthews says the entire market was worth $260 million in 2002 and is expected to grow to $1 billion by 2007. Ethernet-over-wavelength products, such as the ones Internet Photonics offers, accounted for $89 million in 2002 and are expected to grow to $373 million by 2007.
— Marguerite Reardon, Senior Editor, Light Reading