FSO frees networks from fibre By Gerry Blackwell
Originally Published: January 24, 2003
By: Globe and Mail

It may sound like something out of The Jetsons, but free space optical technology uses precisely aligned laser guns to deliver fibre-optic networking -- without the fibre.

The guns shoot narrow, high-frequency light beams encoded with data from one building to another. FSO uses light in much the way fibre-optic systems do, and even connects to local area networks in the same way as fibre.

"FSO, in essence, is fibre over the atmosphere," says Michael Corcoran, senior vice-president of sales and marketing at fSona Communications Corp., a Vancouver-based FSO equipment vendor.

The business case for FSO is compelling. For relatively short-haul, very high-speed connections -- up to 1.25 gigabits per second over a few kilometers -- linking two buildings by installing laser transceivers pointing at each other from rooftops or through office windows is significantly cheaper and faster than laying down fibre, FSO vendors say.

In a case study fSONA pitches to network service provider clients, the total cost for using fibre to link five buildings was $675,000. Using FSO it was $275,000. Another vendor claims FSO is typically one fifth the cost of fibre. FSO is also significantly cheaper than radio-based fixed wireless solutions that use licensed spectrum, since licenses are expensive. And FSO is faster and more reliable than fixed wireless systems using unlicensed spectrum, vendors say.

These factors could spur impressive growth in the FSO market. In a report on the technology published last May, brokerage Merrill Lynch & Co. Inc. saw a bright future for the technology. It estimated that FSO equipment sales in 2000 were $100-million (U.S.), but predicted the market would grow to $2-billion by 2005.

But FSO also has some troubling drawbacks. The laser beams that make the connection can be defracted by fog particles or rising heat waves, which can degrade or sever the link. The swaying of tall buildings can also break the precise alignment of laser transceivers. And the first generation of products, which are still being old, use laser frequencies that could be harmful to the human eye.

However, telecom consultant Ian Angus, president of Toronto-based Angus TeleManagement Group Inc., says these technical problems shouldn't stop companies from considering FSO. More problematic, Mr. Angus says, will be the kinds of business issues that often plague new technologies.

"The concerns buyers are going to have are more, 'Is there somebody out there that can support this technology that I can depend on?' " he says. "Given the state of the high-tech industry, many customers are hesitant to commit to companies that don't have a strong track record -- let alone relatively new startups." Most of the key vendors touting FSO are startups, even if some are backed by well-established companies.

Besides fSONA, the main players are Terabeam Corp. of Redmond, Wash. -- backed by Lucent Technologies Inc. -- and LightPointe of San Diego, bank-rolled in part by Cisco Systems Inc. and fibre cable maker Corning Inc. While vendors themselves admit that many potential customers haven't even heard of the technology yet, they are finding a few with needs pressing enough that they're willing to take a chance on FSO.

fSONA says it has 70 systems in place, while Terabeam lays claim to 100 links and LightPointe 900. Film post-production firm Toybox Toronto, a division of Command Post & Transfer Corp., is a typical early adopter. Toybox needed to connect its downtown facility to a long-haul fibre-optic network a few blocks away so it could transmit digital video versions of daily footage from Toronto-based film productions to Hollywood studio executives. FSO turned out to be the only reasonable way to do it.

"There's lots of [movie] shooting occurring in Toronto now," notes Command Post vice-president of engineering Bill Varley. "But if we want to keep the post-production side of it in Toronto, we have to be able to provide a hands-on, real-time connection to the project for producers."

Toybox couldn't wait the 60 to 90 days it would take to get permits to lay fibre, as it was committed to providing the service sooner. Mr. Varley admits he had some qualms when FSO was proposed, but in the and had little choice. Since it was installed in October, the connection has not been down once, he says.

Most FSO sales so far are to individual enterprises or specialized network service providers. But vendors admit that to raise the technology's profile and broaden their reach, they need to convince major carriers to use and resell their products. And while fSONA's Mr. Corcoran says most carriers are at least investigating FSO, it is taking time to get them to commit to it.

Some are now testing the technology in the field, including Denver-based Qwest Communications International Inc. In Sweden, Utfors AB, a pan-Nordic competitive carrier that provides mainly fibre-based services, is running commercial field trials of FSO equipment from Terabeam, providing service to two paying customers. Chief technology officer Sten Nordell says the FSO links have been 100 per cent reliable so far.

Utfors sees FSO as a niche tool. The company will use it when it needs to provide links of 100 Mbps or higher, when there is no fibre in place that can be used and when the client needs the service up and running sooner than Utfors can build fibre. Mr. Nordell also likes the idea that he can install an FSO link quickly, then later, when fibre is in place or the customer moves, take the equipment out and use it elsewhere.

When field trials are complete in the early summer, Mr. Nordell anticipates Utfors will use FSO in 2 per cent to 10 per cent of customer installations. But if equipment prices continue to drop, making it cost effective to use the technology for lower-speed connections from 10 to 100 Mbps, the company could end up using FSO much more, he says. No other carrier has come as close to saying it will use FSO.