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To: Frank A. Coluccio who wrote (3099)	11/5/1999 8:49:00 AM
From: Frank A. Coluccio	Respond to of 15615

Lucent Says AT&T Among Companies Testing Nexabit Box Murray Hill, New Jersey, Nov. 4 (Bloomberg) -- Lucent Technologies Inc., the world's No. 1 phone-equipment maker, said AT&T Corp. is among 60 phone companies that plan to test a piece of super-fast Internet gear Lucent acquired earlier this year. Lucent gained the product, a router that directs traffic on the Internet, with its July purchase of Nexabit Networks Inc. for $1.1 billion. AT&T, the biggest U.S. long-distance phone company, Global Crossing Ltd. and the state of Oklahoma already have run tests on the NX-64000, said Mukesh Chatter, vice president of core routing at Murray Hill, New Jersey-based Lucent. The other companies plan tests over the next six months. Successful trials at AT&T would give credibility to a product that Lucent hopes will help it regain the lead in optical networking from rival Nortel Networks Corp. Lucent developed a sophisticated link between the router and its optical equipment that speeds transmission and reduces costs, Chatter said. ''Selling to AT&T would be a tremendous validation for Nexabit,'' said Raj Mehta, an industry analyst with market- research firm RHK Inc. of San Francisco. Because the NX-64000 works best with other Lucent equipment, it could help the company sell more of the gear used to send and boost capacity on fiber, Chatter said. Lucent fell to No. 2 in the fiber-optic equipment market last year, according to RHK. Lucent already has its first purchase order for the NX-64000 and expects at least two more by year-end, Chatter said. The router will start generating revenue in the first quarter of calendar 2000. ''A couple of contracts we're bidding on are worth a few hundred million dollars each,'' said Chatter, who founded Nexabit and joined Lucent as part of the acquisition. Biggest Challenge The NX-64000 is one of a new generation of devices known as terabit routers that promise to make the Internet faster and more reliable for sensitive traffic such as phone calls and video- conferencing. Others are being developed by Nortel, Avici Systems Inc., Pluris Inc., and Siemens AG. The biggest challenge for Lucent when it bought Nexabit was to develop an interface that would let the NX-64000 handle data traffic on the fastest of fiber networks. The lasers used to power such networks are based on technology called OC-192. Early on, Lucent executives were unsure that Nexabit would develop an OC-192 interface as quickly as the startup claimed and said the process could take until next year. Chatter said it's ready now; Global Crossing used it to move traffic from Cleveland to Chicago and back again. ''That's a key to getting the product into big, core networks,'' said Craig Johnson, a principal analyst with the Pita Group in Portland, Oregon. Phone companies and Internet-service providers need OC-192 interfaces to avoid bottlenecks that slow traffic as new fiber- optic equipment adds capacity to optical networks. Without them, carriers won't be able to provide customers with guaranteed data speeds, analysts said. New York-based AT&T said Monday that it's accelerating a plan to update its Internet backbone to OC-192 from OC-48, which is four times slower. The company now expects to put OC-192 traffic on the network this month, well ahead of its original target of the first half of 2000. Lucent was the equipment arm of AT&T until its spinoff in 1996. AT&T is still its biggest customer.