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Carriers Moving to Free Space Optics?
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By Jeanie Stokes
Originally Published: July 23, 2001
By: Broadband Week


The slowdown in telecom spending and drying up of capital availability in recent months hasn't been bad news for one sector. The makers of free space optics, a technology that uses lasers for last mile connectivity, say they're finally attracting some attention amid the mayhem.

A year ago, the FSO sector had trouble getting on the radar screens of telecom service providers. Now, both major carriers and their newer competitors are looking for ways to cut costs. They're finding alternative wireless solutions may be cheaper and quicker ways to deliver broadband access.

"We're doing numerous trials with a large number of carriers around the world. At some point they will make a purchase. That will be a great thing for free space optics," says Theresa Carbonneau, president and chief executive officer at fSona Communications. "Right now, there's still that 'Is it real? Is it not real? Is it Star Trek? Is it not Star Trek?' attitude."

Industry executives expect to see a major carrier certifying FSO equipment for large-scale use in a global network within the near future. Such a decision "validates the technology. It moves it from enterprise to carrier (applications). It moves from a niche to a mainstream technology," says Baksheesh Ghuman, vice president of marketing at LightPointe, a San Diego-based maker of carrier-class free space optics systems.

Five-year-old LightPointe says it is in field and lab trials with more than a dozen global telecom carriers and "has successfully emerged" from a field trial with a major U.S. service provider.

Although lasers have been around for years, their use in connectivity largely has been by a company or institution solving a specific problem like linking the IT systems of two or more buildings. That's the industry's low-hanging fruit, executives say.

The tougher, but far more lucrative, market is carrier sales because of the size of their networks and the many ways they can use lasers for broadband access. Carrier applications include metro network extensions, LAN connectivity and the completion of SONET rings. Lasers also can be used in conjunction with passive optical networking devices and with gigabit Ethernet backhaul.

Carbonneau points to fSona's latest investment as proof the carriers are interested. British Telecom's research arm recently made an undisclosed equity investment in the Richmond, British Columbia, company that was formed in 1997 to develop products under a licensing agreement with BT. fSona in February launched its first commercial products, designed for both the enterprise and carrier markets. The optical wireless systems can complete links ranging up to about 2.5 miles and deliver data at speeds of 155 Mbps to 1 Gbps.

The industry is hitting potential customers hard with the message of cost savings and systems that are unencumbered by some of the problems encountered by DSL and LMDS fixed wireless providers.

"This equipment is really fairly inexpensive. You can buy a 2.5 Gig system for less than $50,000. We can hook up customers at a fifth of the cost of laying fiber," says Ghuman at Lightpointe, which has installed about 600 FSO systems worldwide.

Another cost factor eliminates the "if we build it, customers will come" approach that's been a financial disaster for many of the newer telecom providers.

"If you're using our equipment, you're actually hooking up a real customer, not just laying fiber with the hope of someday getting a customer," Ghuman says.

The FSO industry says they are the ideal solution for metro network carriers that laid miles of fiber in major markets of the United States, only to run out of money before completing the lateral build outs from the street to the buildings. The high cost of fiber means only about 3,000 of the 4.2 million commercial office buildings in the United States have sufficient tenant traffic to make running fiber into the building economically viable.

Executives at Terabeam Corp., a Seattle FSO service provider, say the problem isn't the last mile of connectivity. It's often the last couple of hundred feet from the fiber in the street to the tenant's space in the building above.

Terabeam (see related interview on page XX) recently opened its second market in Denver, where its network of four buildings linked by laser to Tier 1 backbone providers covers 70 percent of the downtown business district.

While the money crunch has curtailed FSO potential in some markets, it's created interest in others. "The PCS cellular backhaul market--that's where there's extraordinary levels of interest. With the advent of GPRS 2.5G and 3G, already the backhaul costs are 40 percent to 50 percent of costs for Verizon Wireless, or Vodafone or VoiceStream or whatever," says Michael Corcoran, fSona's VP of marketing. "What happens when they do push more data through and the backhaul, requirements go from narrowband voice to much broader bandwidth. They don't want to be buying (additional) radio frequency because they're tap city, too."

Optical Access Inc. also is talking with carriers and equipment vendors about using free space optics to link their 3G cell sites. Typical backhaul installations use a T1, or E1 line in Europe, and aren't fast enough for 3G, says Allen Brandt, vice president of marketing and business development.

FSO increasingly is being viewed as another element in the technology toolbox for carriers of all sizes as they address access solutions. Optical Access, for example, uses free space optics, intelligent data switching, provisioning and aggregation over switched mesh architecture to assure redundancy in its network solutions. Terabeam uses the most cost-affective approach, whether it's laser point-to-multipoint networks or fiber links to spread its availability through a market.

e-xpedient/CAVU Inc., a Miami metro area networks provider, has selected Canon Inc.'s Canobeam III secure light beam transmission system to use with 60 Ghz broadband fixed wireless radios to deliver 100 Mbps broadband access to commercial users.

Will larger carriers like the IXCs and ILECs soon see the light? The answer may be coming soon.