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Technology Stocks : Alcatel (ALA) and France

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To: Steve Fancy who wrote (2068)7/5/2000 6:20:26 PM
From: zbyslaw owczarczyk  Read Replies (1) of 3891
 
Where Copper Meets Glass

lightreading.com

On the face of it, passive optical networks (PONs) and digital subscriber line (DSL) services
couldn't be less compatible. While both are low-cost, high-speed techniques for delivering data to
homes and offices, PONs run over fiber and DSL uses copper connections. (See PONs: Passive
Aggression for more on PONs.)

But industry sources say there's a new dialectic at work, making PONs and DSL the ideal
partners in building out next-generation carrier nets.

Here's why: Recent U.S. regulatory rulings from the Federal Communications Commission (FCC)
are giving ILECs (incumbent local exchange carriers) an incentive to get DSL services up and
running on a grander scale. As a result, DSL services are expected to explode in the near future.
And that's leading carriers to expand the buildout of their networks to support DSL.

PONs will reduce the costs of expansion. Specifically, carriers say they'll use PONs to extend
bandwidth cheaply from the central office to multiple outdoor vaults, where telecom gear is linked
to last-mile copper or fiber. PONs would let carriers use just one fiber from the central office to
deliver bandwidth to up to 32 remote outdoor vaults. Inside each vault, the PON link would be
hooked to a DSL access multiplexer, which in turn could pass bandwidth over existing copper
wire to homes and businesses.

"PONs are definitely going to be the fastest, cheapest way for incumbents to expand DSL
services," says Tom Nolle, president of CIMI Corp. cimicorp.com, a consultancy. He
says the link between DSL and PONs is already happening in the network of SBC
Communications sbc.com (NYSE: SBC).

According to that carrier's Web site, over 4,000 outdoor vaults are going in this year. They'll be
populated by Litespan-2000 and -2001 Digital Loop Carrier DSL devices from Alcatel SA
alcatel.com. Nolle says sources at Alcatel told him that many of those outdoor vaults
will be fed by PONs--also supplied by Alcatel. "The Litespan-2001 has been upgraded
specifically to handle PON feeds," he says.

Neither Alcatel nor SBC would confirm the use of Alcatel PONs in SBC's network at press time.

Other PON vendors are seeking outside partners. Quantum Bridge Communications Inc.
http://www. quantumbridge.com and NEC Eluminant Technologies Inc. eluminant.com
say that they're in talks with DSLAM vendors. And on June 5, Marconi Corp. PLC
marconi.com (LONDON: MNI), which has confirmed it is developing a PON product,
announced it will resell DSL gear from Copper Mountain Networks Inc.
coppermountain.com (Nasdaq: CMTN).

At least some vendors hope the partnerships will result in new products. "We are in discussions
with all the leading DSLAM vendors about putting PON terminations in their equipment," says Jim
Holley, senior vice president of marketing at NEC Eluminant.

Neither NEC Eluminant nor Quantum Bridge would name whom they're talking to.

-- by Mary Jander, senior editor, Light Reading (http://www.lightreading.com)
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