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Sycamore Rings Up BellSouth

Sycamore Networks Inc. (Nasdaq: SCMR) announced this morning that an Internet group within BellSouth Corp. (NYSE: BLS) has chosen Sycamore's SN 16000 optical switch and SN 8000 optical transport platform to build a brand new IP-based network called the "Florida Multimedia Internet eXchange."

The terms of the agreement were not disclosed, but the contract is a multimillion dollar deal, according to Sycamore officials. The company expects to begin shipping products in the next two months, and BellSouth hopes to build the network by the end of the year, according to Jeff Kiel, vice president of marketing with Sycamore.

The deal does demonstrate, despite concerns that carrier spending may slow down, that some carriers are committed to spending money to build next-generation IP-based networks.

So what's the catch? Well, Sycamore gear is not yet certified for Network Equipment Building Standards (NEBS) set up for telecommunications equipment used by major regulated carriers (see Optical Power Trip). This may help explain why the deal is with an unregulated data network that falls in BellSouth's Internet group, rather than for the primary BellSouth voice network. The network on which it is being deployed will be a Network Access Point (NAP) that connects Internet backbones of other carriers, but it's not part of the primary BellSouth network, which requires NEBs-compliant equipment.

Sycamore officials said the equipment was designed to be NEBS compliant and that it is in the process of being NEBs certified.

BellSouth officials said the equipment will allow them to deploy new broadband services, such as voice-over-IP and video. Once connected, the network will become the first fully IP-based optical NAP in the United States, according to Susan Campbell, senior director of Internet business development with BellSouth. All seven of the current U.S. Internets NAPs are built on an ATM core, says Campbell.

In early morning trading, Sycamore shares rose 5.38 (7.39%) to $78.06.

-- R. Scott Raynovich, executive editor, Light Reading http://www.lightreading.com

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