FCC Seeks Budget of $280 Million for 2004

The FCC is seeking a budget of $280,798,000 for fiscal year 2004, up 1% from 2003. The FCC said the budget provides for mandatory increases for salaries and benefits and other areas and inflationary increases for contract services. The budget level also includes funds for additional staff to provide engineering expertise to ensure effective management of the electromagnetic spectrum and encourage the provision of new technologies and services to the public, continue infrastructure improvement for the laboratory facility, and enhance the audit capabilities of the Office of Inspector General. The proposed spending plan is online.
http://www.fcc.gov

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Alcatel Reports Sales up 28% Sequentially, But Warns on 2003 Outlook

Alcatel reported Q4 sales of EUR 4.508 billion, up 28% compared to the previous quarter, but down 33% from the EUR 6.766 billion in Q4 2001. Alcatel cited seasonality as well as strong advances in broadband and mobile infrastructure for the gains. Sales for Q4 were up sequentially across all of Alcatel's business segments and in all geographic regions. Income from operations was EUR 20 million but there was a net loss of EUR 1.1 billion due primarily to restructuring charges. Some highlights:

• Revenue for carrier networking equipment rose sequentially by 40.5% to EUR 2.417 billion due primarily to a high level of DSL sales in Europe and in China, as well as mobile network sales.



• Gross margins in Q4 were 27.3%



• During 2002, Alcatel reduced its breakeven level of quarterly sales by more than EUR 2.0 billion to reach EUR 4.1 billion at the end of 2002. The company plans to reduce the quarterly sales breakeven target to EUR 3.0 billion by year-end.



• Employee headcount was 77,000 at the end of 2002, compared to 101,000 at the end of 2001.



• The company anticipates further cuts to 60,000 employees at the end of 2003.



• Geographically, Western Europe accounts for 43% of revenues, Eastern Europe 7%, North America 18%, Asia 19% and the rest of the world 13%.



• Alcatel's outlook for 2003 calls for revenues to be down 15% year-on-year due to the strong EUR and the lower level in world demand for telecommunications equipment.



• Sales for Q1 2003 are expected to be down 25% to 30% compared with Q1 2002.



• Alcatel expects to reach its operating breakeven target in 2003.

http://www.alcatel.com

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Level3 Reports Flat Revenues, Closes Genuity Purchase

Citing a modest improvement in new communications sales and revenue, Level 3 Communications reported communications Q4 2002 GAAP revenue of $273 million, versus $269 million for the fourth quarter 2001, and versus $274 million for the third quarter of 2002. Included in total communications GAAP revenue was $243 million of communications services revenue and $30 million attributable to reciprocal compensation revenue. Level 3 noted strength in its softswitch and IP services segments, as well as modest growth in new sales of transport services. Overall, Level 3 reported a net loss for the quarter of $313 million, or $0.73 per share.

Level 3 has completed its acquisition of substantially all of Genuity's assets and operations. Level 3 paid $60 million in net cash consideration to Genuity and assumed certain long-term operating agreements. As part of the transaction, the company also paid $77 million in cash for prepaid network vendor services to be used by Level 3 during 2003. The company also expects to incur one-time integration costs of approximately $75 to $100 million during 2003. As a result of the Genuity acquisition, the company now expects to turn free cash flow positive during the second quarter of 2004.
http://www.level3.com

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Tropic Networks Closes $20 Million for its Metro DWDM

Tropic Networks, a start-up based in Ottawa, Canada, closed US$20 million in third round funding to support is metro DWDM solutions. The company has recently streamlined its business strategy to focus on the metro optical market. Tropic's TRX-24000 platform, which was introduced last October, takes ITU grid wavelengths from an existing SONET/SDH ADM, switch or router and transports it across multiple rings while staying in the optical domain. The platform has a range of 600 km. Tropic also features a Wavelength Tracker technology that monitors and provides failure detection functionality to manage the signal as it travels throughout the network. Five existing investment firms participated in the company's third round of financing -- Celtic House Venture Partners (lead investor), Goldman Sachs' Private Equity Group, Kodiak Venture Partners, Crescendo Ventures and the Teachers' Merchant Bank, the private equity arm of the Ontario Teachers' Pension Plan.
http://www.tropicnetworks.com/

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Network Photonics Ships 1x4 MEMS-based Optical Switch

Network Photonics announced the first customer shipment of a 1x4 MEMS-based wavelength switch designed for use in DWDM networks. The CrossWave 1400 is a 1x4 wavelength-selective switching subsystem that provides transparent NxN wavelength switching nodes in long-haul, ultra-long-haul and regional carrier networks. Network Photonics said wavelength-selective switching could be used in conjunction with sub-wavelength grooming OEO switches or ADMs at junction points to manage wavelength connections and deliver services. All-optical NxN switches would allow express wavelengths to traverse the network junction point without requiring unnecessary OEO regeneration while providing dynamic add/drop switching capability for rapid reconfiguration and flexible deployment of transport services. Its new CrossWave 1400 switch can handle up to 96 wavelengths per fiber at 50 GHz channel spacing in the C-band.
http://www.networkphotonics.com

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Axonlink Unveils Its Alternative to CWDM and DWDM

Axonlink, a start-up based in Red Bank, New Jersey with R&D in Kfar-Saba, Israel, unveiled its Agile Wave Division Multiplexing (AWDM) demonstration system. Axonlink's AWDM transceiver features full transmit and receive tunability using off-the-shelf optical components. The company said its technology enables easier amplification than CWDM and DWDM, as low as 12.5Ghz wavelength spacing and simple fiber interface using colorless splitters. Potential uses include wavelength services, fiber relief and fiber to the building (FTTB) access and metro applications.
http://www.axonlink.com

• Axonlink is headed by Dror Nahumi, who previously was president of I-Link, a VoIP-based service provider. Axonlink's technical team is led by Sason Sourani, who previously led the development of the DCME product at ECI Telecom.



• First round investors in Axonlink included ECI Telecom, Benchmark Capital and Innovacom.

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Key3Media Files for Chapter 11, Tradeshows to Continue

Key3Media, which produces information technology tradeshows and conferences including Comdex, NetWorld+Interop and the NGN events, filed for Chapter 11 bankruptcy protection. Key3Media said all its trade shows would take place as scheduled while it undergoes a capital reorganization. To this end, the company has proposed a plan backed by Thomas Weisel Capital Partners (TWCP), which own approximately 68% of Key3Media's bank debt and approximately 38% of its bonds (11.25% senior subordinated notes due 2011). Under the plan, Key3Media would eliminate its total debt by 87% from approximately $372 million to $50 million and eliminate all of its existing preferred stock and common equity. TWCP would own approximately 99% of the recapitalized company.
http://www.key3media.com

• Last month, Key3Media sold its Voice on the Net (VON) conference events back to pulver.com. It originally purchased the industry event from pulver.com in September 2001. Financial terms were not disclosed.

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Alloptic Selected for FTTH Project in Washington

Alloptic's Gigabit Ethernet Passive Optical Network (ePON) equipment was selected for the first phase of a $6 million Fiber-to-the-Home (FTTH) and Fiber-to-the-Business (FTTB) project in the city of Cheney, Washington. The first phase of the project will bring converged services to all city administrative and operating facilities, as well as to a target group of local businesses. Phase II, which is to commence mid-year 2003, is the deployment of services to an estimated 3,600 homes.
http://www.alloptic.com

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3Com Issues Price Challenge to Cisco, Dell, HP

3Com launched a competitive rebate program that rewards authorized North American channel partners for choosing 3Com's enterprise networking products, instead of comparable products from Cisco, Dell and Hewlett-Packard. The first "3Com Challenge of 2003", which is effective immediately and scheduled to end on 28-February-2003, provides cash rewards to VARs for business network bids over $10,000.
http://www.3com.com

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Deutsche Telekom Selects Quick Eagle for 4 Mbps Frame Relay Service

Deutsche Telekom will use Quick Eagle Networks' 4250 Multilink Frame Relay Access platform for the rollout of a new High Speed Frame Relay service. The new 2xE1 (4Mbps) Frame Relay service has been successfully tested with a major industrial company in Germany and is going to be launched in the next month as a pan-European offering. Quick Eagle's 4250 Multilink Frame Relay Access Device will be used as customer premise equipment. Using Frame Relay Forum FRF.16-compliant multilink protocol, the device bonds together two physical WAN links (T1 or E1) into one logical link.
http://www.quickeagle.com

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MPEG LA Releases MPEG-4 Systems Patent Portfolio License

MPEG LA, the consortium that manages the essential MPEG-4 intellectual property owned by many patent holders, published the terms for its MPEG-4 Systems Patent Portfolio License. The License includes essential patents owned by Apple Computer, the Electronics and Telecommunications Research Institute (ETRI); France Telecom; Koninklijke Philips Electronics; Mitsubishi Electric Corporation; Samsung Electronics and Sun Microsystems. The group is promising one-stop technology standards licensing under fair, reasonable, nondiscriminatory access.
http://www.mpegla.com

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Cisco Reports Quarterly Sales of $4.7B, Plans $150M Marketing Campaign

Citing improved company productivity in a challenging environment for information technology, Cisco Systems reported quarterly sales of $4.7 billion, compared with $4.8 billion for the same period last year, a decrease of 2.1%, and compared with $4.8 billion for the preceding quarter. Net income on a GAAP basis was $991 million or $0.14 per share. Some highlights from the quarter:

• Profit and net income for the company are near all-time highs.



• Gross margins for the quarter were 70.4%



• Cash and cash equivalents and total investments were $21.2 billion at the end of the quarter



• Revenue breakdown by product category: Routers 26%, Switches 41%, Access 5%, Other 11% (optical, security, VoIP) , Services 17%



• Revenues by Geography: US 45%, Europe/Middle East/Africa 31%, Americas International 5%, Japan 7%, Asia/Pacific 12%



• Cisco's service provider business flattened out or improved in the quarter, despite CAPEX cuts by major carriers.



• Cisco is planning to launch a $150 million marketing campaign as a means to break away from its competitors.



• During the quarter, Cisco repurchased approximately $1.5 billion of common stock at an average price of $14.05 per share. The company will remain active in repurchasing its stock



• Headcount at the end of the quarter was 34,987, compared with 36,786 at the same time a year ago.



• Areas of concern include the overall conservative spending attitude of customers; service provider CAPEX budget cuts; weakness in order growth in the US in January; and the conservative planning of its competitors.



• Regarding the prospect of dividends, Cisco said it would consider issuing dividends depending on shareholder interest.



• President & CEO John Chambers said he is more optimistic than he was going into the previous quarter, although from an external perspective he said he was more cautious due to the geo-political climate.



• Revenue guidance for the next quarter is flat to down slightly (2 to 3%). Gross margins are expected to be 68 to 70%.

An archived webcast of the company's quarterly conference call is online.
http://www.cisco.com

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Verizon's CEO Calls on FCC to Restore “Rational Economics�?

Verizon CEO Ivan Seidenberg issued a public call to the FCC to "restore the link between rational economics and investment in technology." Seidenberg said Verizon is one of the few companies with the scale, the capital capacity, and the will to move the needle on the broadband speedometer. With the right regulatory changes, Verizon would be willing "to step on the gas." Specifically, Seidenberg called on the FCC to adopt the following national standards:

• Eliminate unbundling for high-speed, high-capacity data connections


• Remove switching from the list of required unbundled elements


• Eliminate the requirement to provide business UNE-P (unbundled network elements platform)


• Transition away from UNE-P in the residential market


• Refrain from extending the UNE regime to already competitive special access services


• Prevent old telephony rules from being applied to

http://www.verizon.com

• Next week, the FCC is expected to issue new rules for unbundled network elements (UNEs).



• Representing the opposing view, AT&T's Chairman, David Dorman, last week warned that landmark policy changes now being considered at the FCC could change the telecom landscape for decades. http://www.convergedigest.com/Bandwidth/newnetworksarticle.asp?ID=6268

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