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Terabeam Scales Back

Light Reading
News Analysis
Light Reading
9/28/2001

TeraBeam Corp. says it is laying off 90 employees, or 20 percent of its 450-person staff, due to a cutback in expansion plans.

The company last year raised $527 million in private equity, including $400 million from Lucent Technologies Inc. (NYSE: LU), in order to further deployment of its wireless optical alternative to cable-based networks. Lucent also contributed some intellectual property, which Terabeam values at $50 million.

Company spokeswoman Pam El says, the company still has more than half of the invested cash. With the cutbacks, she adds, that money will be sufficient to sustain the company "indefinitely" without resorting to more fund raising. Earlier this year, the company stated it had enough money to carry it through the end of 2002.

Terabeam grew to a peak of 540 workers before the telecommunications slowdown. It had planned to be in six cities by the end of the year but has now cut that number to four. Following a March product launch in Seattle, where company headquarters are situated, Terabeam is now providing service in Denver and Dallas and will soon announce the fourth city, says El.

Terabeam’s use of so-called free space optical technology, pioneered by the military during the Cold War, promises high-bandwidth wireless data connections without the inconvenience of licensing radio frequencies from the government and installing rooftop transmission equipment for corporate customers. Instead, a transceiver the size of a small satellite dish plugs into a standard power outlet. The technology also prevents eavesdropping and is touted for being able to circumvent the hassles of installing fiber cable, which include digging up streets and routing wire through walls.

Downsides, however, include the need to locate the transceiver in a window within a line-of-sight of a Terabeam base station, installed on a service provider building. Critics also note that the distance between the transceiver and hub can only be about 500 yards, and certain weather conditions, like fog, can weaken the signal. For these reasons, some industry observers believe the technology will never achieve much more than a niche status.

Other companies providing high-speed laser data transmissions using free space optical technology include AirFiber Inc., Canon, fSona Communications Corp., LightPointe Communications Inc. and Optical Access Inc..

Terabeam differs from many of these companies in that it also plans to be the wireless data provider in the cities in which it launches, in addition to selling the technology itself.

--Tom Davey, special to Light Reading, http://www.lightreading.com

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switchrus
switchrus
12/4/2012 | 7:47:44 PM
re: Terabeam Scales Back
Winstar failed in the same space, why should Terrabeam succeed trying to serve the same market with a different technology?

If they halted deployment before going too far in debt I would guess that they will survive. Can anyone explain why doing last mile provisioning over a free space laser beam is better than a millimeter wavelength RF link. Other than a built in tax for the spectrum license fee I donG«÷t get the value proposition.
switchrus
switchrus
12/4/2012 | 7:47:42 PM
re: Terabeam Scales Back
Stagecoach said

"I think that is one of the main points, that a spectrum license is not required. This saves in costs as well as time required to obtain the license, that is, unless you already hold a "market license" for a city in the LMDS frequencies. "

I would agree that the lack of necessity of license is an slight economic advantage to FSO, but how much of a load factor is the license fee? I seem to recall some pretty outrageous bidding wars a few years ago during spectrum auctions, so I would guess that from a business plan point of view these costs are factored right in.

"The other benefit is bandwidth. FSO equipment began as a 155 Mbps solution but has since reached 622 Mbps, 1.25 Gbps and even 2.5 Gbps now."

Is there a more of a rain fade issue at the higher symbol rates given power spectrum density issues? IG«÷m not up on the restrictions imposed on FSO in terms of power levels, but I would assume that running 2.5Gbps would take lot more power in the link, which would start to bump into regulatory issues. There was a news blurb the other day that had Endwave/Nolka promoting 60Ghz as a G«£license freeG«• last mile solution and also promoting the water vapor absorption issue as a benefit, G«£less chance of interceptionG«• or some such claim, go figure.

"FSO equipment is less expensive than RF at these high bandwidths. FSO is a new technology, and yes, it may be a niche technology, but a few companies will survive and prosper. "

Not to pick apart this assertion, however is a three axis steered telescope (modified Mead I think) and associated TX/RX equipment all that cheaper than a fixed antenna with a RF package, also whatG«÷s the long-term reliability and maintenance issues with this technology?

FSO I suppose does have itG«÷s place, and any technology that lights a building with fat pipes drives demand for more bandwidth overall, which is good for this industry.
Stagecoach
Stagecoach
12/4/2012 | 7:47:42 PM
re: Terabeam Scales Back
I think that is one of the main points, that a spectrum license is not required. This saves in costs as well as time required to obtain the license, that is, unless you already hold a "market license" for a city in the LMDS frequencies. The other benefit is bandwidth. FSO equipment began as a 155 Mbps solution but has since reached 622 Mbps, 1.25 Gbps and even 2.5 Gbps now. RF systems are maxing out at 155 and 311 Mbps, even thought there are claims out there of 622 Mbps. This leads to the next benefit. FSO equipment is less expensive than RF at these high bandwidths. FSO is a new technology, and yes, it may be a niche technology, but a few companies will survive and prosper. The most likely winner -- Lightpointe.
wirelesshz
wirelesshz
12/4/2012 | 7:47:38 PM
re: Terabeam Scales Back
License-free and instant access to multi-gigabit pipes do not help service providers for the following reasons:

1-Their current backhaul links are way under utilized because of the lack of bandwidth consuming applications at the access, i.e. no immediate high demand for 10, 100 or 1000 Mbps. Even video conferencing requires less than 2 Mbps.
2-Consumers are very satisfied with the current video (digital/broadcast/satellite/on-demand) quality for the price they are paying.
3-With real-time applications flowing into the network, service providers need to commit to a very high-level of Service Level Agreement (SLA). With the Free-Space optics weather limitations, it is very hard to comply with those SLAs especially at those ultrahigh speeds. It is simple, if you install a microwave link next to an FSO link, the FSO link will always fail before the microwave link. This is basic signal propagation in the atmosphere.

The winners in any Market and with any Technology are those that show profitability and growth. Can any FSO vendor claim profitability?
whoknowsnothing
whoknowsnothing
12/4/2012 | 7:47:33 PM
re: Terabeam Scales Back
Has anyone figured out how they achieve point to multipoint FSO? Other vendors listed have been point to point FSO...

rtfm
rtfm
12/4/2012 | 7:47:30 PM
re: Terabeam Scales Back
I seem to remember that terabeam's USP was that they did do some point to multi-point.

The problem with such business models is that it needs larger, blanket deployments (read debt and Winstar).

On the other hand, I know prices of some of this equipment and on a per megabit basis, beats RF by far for modestly high bandwidths. It does appear to be niche or complementary, but if the niche is several hundred million dollars of equipment sales, I'll take such a niche ;)

The rain fade is not the issue (which actually affects particular RFs more), but rather fog. Some people set up RF backups (lower speed, maybe even ISM). This adds to costs, but increases availability.

Again, FSO will work much better in places with little/no fog. Also, they're nowhere near done with the technology learning curve (just like all other electronics). But, fiber pulls costs don't fall that dramatically (if at all) in metros.

IMHO,

rtfm
Stagecoach
Stagecoach
12/4/2012 | 7:47:29 PM
re: Terabeam Scales Back
"Not to pick apart this assertion, however is a three axis steered telescope (modified Mead I think) and associated TX/RX equipment all that cheaper than a fixed antenna with a RF package, also whatG«÷s the long-term reliability and maintenance issues with this technology?"

I believe the higher bandwidth RF systems (i.e., 155+) sold by the likes of Ceragon and Helioss are significantly more expensive than the FSO systems coming to market. Another issue that arises here is the ability to squeeze that much bandwidth into a finite slice of spectrum. that's tough to do and requires significantly high QAM, and thus $.

I believe FSO has its place as an alternative to laying fiber directly to a building. you can almost boil it down to multiplying the cost per meter to lay fiber by the distance to reach the building, and then compare that to the cost of the FSO system. This is, of course, over-simplified, but the concept holds true.
wirelesshz
wirelesshz
12/4/2012 | 7:47:28 PM
re: Terabeam Scales Back
FSO is as much affected by rain as the high-frequencies microwave. Check the attenuation figure on slide 6 in the presentation below, and you will see that rain and fog attenuate the FSO signal more than the microwave signal.

http://ncne.nlanr.net/training...

switchrus
switchrus
12/4/2012 | 7:47:28 PM
re: Terabeam Scales Back
Stagecoach said

G«£I believe the higher bandwidth RF systems (i.e., 155+) sold by the likes of Ceragon and Helioss are significantly more expensive than the FSO systems coming to market. Another issue that arises here is the ability to squeeze that much bandwidth into a finite slice of spectrum. that's tough to do and requires significantly high QAM, and thus $.G«•

The RF folks have been very busy and looks like there will be some stiff competition on the higher rate links. HereG«÷s a blurb from Endwave about equipment for the 60 Ghz frequency band which would compete directly with FSO.
http://biz.yahoo.com/prnews/01...

Same sort of issues confronting FSO are also in play at 60 Ghz; Fog, rain etc., same lack of license requirements and looks to be capable of the same sort of symbol rates at comparable distances. The race to dominance will most likely come down to cost and reliability along with delivery of real products when the market wants them.
Stagecoach
Stagecoach
12/4/2012 | 7:47:26 PM
re: Terabeam Scales Back
I agree, FSO's link availability is affected by fog and RF's link availability is affected by rain. Therefore, service providers who deploy either of these technologies must "manage" the links to maintain acceptable availability (i.e., 99.99% or 99.999%). The way this is done is by shortening the FSO link lengths in metro areas that experience significant fog events. you may be able to achieve a 1 km, 99.99% available link in Phoenix, but in Boston, that distance will likely shrink to 500 meters or less.
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