Verizon Communications Inc. (NYSE: VZ) has picked Lucent Technologies Inc. (NYSE: LU) to supply long-haul DWDM technology for a new national network targeting enterprise customers, according to both companies.

The deal's a big one on several levels. First off, Lucent now has a solid RBOC customer for its next-generation long-haul platform, which was launched in 2002 (see Bell Labs Busts 40G Barrier and Lucent Lays on More Lambdas ).Prior to today, the only other customer Lucent had announced for LambdaXtreme was Deutsche Telekom AG (NYSE: DT) in 2002, which has been using the product in trials but has not announced a long-term contract.

But the deal also shows that large carriers such as Verizon are willing to upgrade their optical networks to take advantage of more flexible and powerful technology -- and they're even ready to add the capability to go to 40 Gbit/s.

The LambdaXtreme was launched at a time when carriers were slashing their budgets for core technology and nobody knew when there would be need for a 40-Gbit/s optical platform. The LambdaExtreme can transmit at both 10 Gbit/s and 40 Gbit/s: It can carry 64 40-Gbit/s wavelengths, for a total of 2.56 terabits per second, as far as 1,000 km (625 miles); or 128 10-Gbit/s wavelengths, totaling 1.28 Tbit/s, for 4,000 km (2,500 miles), according to Lucent.

The dollar amount of Lucent’s deal with Verizon was not disclosed, though both a Verizon and Lucent spokesperson confirm it's a three-year deal.

A Verizon spokesman said the Lucent product was picked because of it's "quality, and the capability to configure networks for customers quickly."

Ken Wirth, vice president of Lucent’s optical group, touted the LambdaXtreme’s reach and provisioning capability for building more flexible long-haul networks, as factors in the selection. The LambdaXtreme comes with a built-in reconfigurable optical add/drop multiplexing (ROADM) capability which allows wavelengths to be peeled off the long-haul network. Wirth also said that with 40-Gbit/s router interfaces arriving soon, carriers will soon want a core optical platform with 40-Gbit/s interfaces.

Meanwhile, the deal strikes a blow to Ciena Corp. (Nasdaq: CIEN), which had been in the hunt for an RBOC client for its own next-gen long-haul product, CoreStream Agility. Ciena was in the running for the Verizon deal, and Ciena officials acknowledged they had lost out.

”Yes, we were pitching it, and unfortunately we didn’t win,” says a Ciena spokesperson. Ciena points to recent wins at MCI Inc. (Nasdaq: WCIP) and the federal government's Global Information Grid – Bandwidth Expansion (GIG-BE) project as proof that Ciena can compete (see Ciena and Siemens Share MCI Glory and DISA Deal Is Done).

In addition to Ciena, Alcatel SA (NYSE: ALA; Paris: CGEP:PA), Nortel Networks Ltd. (NYSE/Toronto: NT), and Corvis Corp. (Nasdaq: CORV) are competing in the long-haul space for the North American market.

— R. Scott Raynovich, US Editor, Light Reading

For further education, visit the archives of related Light Reading Webinars: