Announcement to boost free-space optics
Bill Scanlon , Interactive Week
July 16, 2001 10:29 AM ET
Free space optics should get a boost in visibility today with the announcement that heavyweights Cisco Systems and Corning have invested in a small startup that uses beams of light to transmit data between buildings.
Cisco and Corning contributed the major chunks of a $33 million round of funding of LightPointe, a San Diego-based free-space optics company. "For us to get both Cisco and Corning to spend time and look at us says a lot about what's happening with fiber," said John Griffin, CEO of LightPointe.
Some 90 percent of all U.S. businesses are within a mile of an optic fiber route, but either can't afford the cost of that last mile, would have to wait months to get the fiber, or are in cities that have moratoriums on digging up sidewalks.
Free space optics beams lasers between windows or rooftops, from buildings with fiber optic links to those without it. Over short distances, and in cities without too much fog, FSO can carry traffic at higher capacity than radio-frequency wireless. It can be installed at a small fraction of the cost of optic fiber and much more quickly - within a couple hours as opposed to several months.
Corning, the world's largest optic fiber manufacturer, just announced a $300 million write-off of excess optical equipment. Its partnership with LightPointe is an opportunity to lock in customers before those last miles of fiber can be delivered or installed.
"Trenching fiber takes a long time," said Greg Smith, president of Corning Innovation Ventures. "Given the volatility of our customers, it is good for them to be able to put this up. They can rapidly provision a new business customer in an urban setting and start getting revenues next week."
And if a carrier customer eventually decides to replace FSO with fiber, Corning will be there ready to supply it.
For Cisco, the world's largest router company, it's an opportunity to revive an optical equipment market dulled by the unavailability or high cost of fiber. "Free space optics can help Cisco's customers connect to gigabit routers where fiber may not exist," Griffin said. "They can deploy networks that may not be all fiber--and sell more gigabit cards along the way."
Different niche
FSO has always been considered a niche market, for those downtown high-rises where businesses can't afford to wait months for fiber to connect them to crucial fat bandwidth.
Equipment shipments for FSO are expected to grow to just $1.5 billion by 2003, according to Allied Business Intelligence. That's far short of the estimate for radio-frequency wireless, which IGI Consulting sees growing from $800 million last year to $17 billion by 2005.
FSO could grow much faster than the estimates, because new uses have been found for it in the past few months, LightPointe's Griffin said. "One of the surprises I've run into is how often you do need a lot of it. We're seeing customers use it in links that don't touch their end-users - in completing rings, in intercellular communications, in wireless backhauls and in crossing points where economically you can't place fiber. "
"We're feeling pressure to go up to higher speeds for these new applications," he said.
Those new uses for FSO give weight to the patent granted last week to LightPointe for an all-optical connection between a fiber backbone and the customer's premise. Traditionally, the FSO link has been an optical-electronic-optical connection.
"Now, we can take the optical signal, pump it up with an amplifier and send it over the air and back," Griffin said. The all-optical link isn't much of an advantage when there is just one wavelength, "but, if you go multiple lamdas, it makes the whole cost structure much more competitive."
With the technology for which it won the patent, LightPointe can move traffic at speeds up to 2.5 gigabits per second, faster than its competitors and some five to 10 times faster than radio-frequency wireless. That's what attracted Cisco and Corning to a strategic partnership with LightPointe, Griffin said.
With LightPointe's two new partners, the FSO space is getting hotter: Nortel Networks invested in AirFiber and Lucent Technologies invested in another competitor, Terabeam.
And if Cisco, Lucent, Nortel or Alcatel decides to start making FSO equipment? "I say bring them on," Griffin said. "We have the leadership position. Let them compete with us."
TeleChoice consultant Eric Rasmussen sees a bright future for both FSO and radio-frequency wireless, and said it makes sense for companies that depend on fiber to forge those partnerships. "It's a good bundled package for a fiber provider to be able to offer something that gets them the last 500 or 1,500 yards," he said. "FSO definitely will not replace fiber, but it certainly has significant advantages over fiber in cost and speed of install for short distances." |
