Tellabs Names Krish Prabhu as CEO

Krish Prabhu was appointed president and CEO of Tellabs. Michael J. Birck, a company founder and CEO of Tellabs for 27 of its 29 year history, continues as chairman of the board. Prabhu, 49, previously served as chief operating officer of Alcatel Telecom and CEO of Alcatel USA. Prabhu began his telecommunications career in 1980 with AT&T's Bell Laboratories as a member of the technical staff. In 1984, he joined Rockwell International's Network Transmission Division, which was acquired by Alcatel in 1991. He served as president of Alcatel Broadband Products for Alcatel Europe in 1995, until being promoted to CEO of Alcatel USA in 1997. In 1999, he was named chief operating officer of Alcatel Telecom. In 2001, Prabhu became a venture partner in Morgenthaler Ventures, a venture capital firm based in Menlo Park, California, and Cleveland, Ohio. http://www.tellabs.com

http://www.tellabs.com

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Intel Announces Silicon Photonics Breakthrough

Researchers from Intel have succeeded in using silicon manufacturing processes to create a novel "transistor-like" device that can encode data onto a light beam.


Performance of the silicon-based optical modulator exceeds 1 GHz and the Intel researchers believe they can the scale the technology up to 10 GHz or faster in the future. To achieve the result, a beam of light is split into two beams as it passes through the silicon. Then, a novel transistor-like device is used to hit one beam with an electric charge, inducing a "phase shift." When the two beams of light are re-combined the phase shift induced between the two arms makes the light exiting the chip go on and off at over 1 GHz. The on and off pattern of light can be translated into the 1's and 0's needed to transmit data.


"This is a significant step toward building optical devices that move data around inside a computer at the speed of light," said Patrick Gelsinger, senior vice president and chief technology officer at Intel. "It is the kind of breakthrough that ripples across an industry over time enabling other new devices and applications. It could help make the Internet run faster, build much faster high-performance computers and enable high bandwidth applications like ultra-high-definition displays or vision recognition systems." A copy of the paper and more information about Intel's silicon photonics research can be found at http://www.intel.com/technology/sphttp://www.intel.com

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Siemens and Huawei Form 3G Venture in China

Siemens Information and Communication Mobile (Siemens mobile) and Huawei Technologies have formed a joint venture company to develop, manufacture and market TD-SCDMA technology. The companies are investing a combined US$100 million in the new venture, which will be based in Beijing. Siemens mobile will hold 51% in the new company and Huawei will hold 49%.


TD-SCDMA, which complements GSM and W-CDMA, is currently being put to the test in several trial networks. The Chinese Ministry of Information Industry allocated a 155 MHz spectrum to TD-SCDMA in October 2002, thus paving the way for the commercial use of the standard in China. Both partners in the joint venture hope that TD-SCDMA will succeed in the Chinese market and convince operators in other countries to adopt the standard. Manufacturing and marketing of the standard will, however, initially be focused on China. The technology can be operated either as a standalone network or used to supplement GSM or UMTS networks in order to cope with heavy data traffic. The aim is to offer the first products of the joint venture in the coming months and to participate in the official 3G trials with operators set up under the governance of the Ministry of Information Industry (MII) within this year. http://www.siemens-mobile.com/tdscdmahttp://www.tdscdma-forum.org

• In November 2003, 3Com and Huawei Technologies secured the final approvals from the Chinese government to begin operations at their joint venture company. The new Huawei-3Com Co. Ltd. will sell enterprise networking solutions including routers and LAN switches. 3Com has the rights to market and support the Huawei-3Com products under the 3Com brand in all countries except China and Japan. In China and Japan, Huawei-3Com will sell products sourced internally as well as from 3Com.
  The new company is composed of enterprise networking business assets, including LAN switches and routers, engineering and sales/marketing resources and personnel, and licenses to its related intellectual property. 3Com is contributing $160 million in cash, assets related to its operations in China and Japan, and licenses to certain intellectual property. In two years, 3Com has the right to acquire a majority ownership interest in Huawei-3Com. The new Huawei-3Com is domiciled in Hong Kong, with principal operations in Hangzhou, China, and sales offices throughout China and Japan. The company has approximately 1,500 employees based in China and derived primarily from Huawei.

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BT Nears 2 Million DSL Lines, Orders at 45,000 per Week

BT now has nearly 2 million DSL lines in service and its taking orders of over 45,000 per week.


There was an installed base of 1.93 million wholesale broadband lines by 06-February-2004, three times the number of connections 12 months ago, with net additions growing at more than 33,000 per week. The increasing base is reflected in a 129% increase in broadband revenues to £128 million in the quarter. DSL is now available in central office exchanges serving 85% of UK homes. BT aims to have 100% broadband coverage of every UK community during 2005. http://www.bt.com

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Industry Reaction to FCC Ruling

Telecommunications
Industry Association: "We are very encouraged that the
commission is moving ahead to bring some clarity to the
regulatory uncertainty surrounding VoIP and IP applications in
general. The NPRM will be an important step in the process of
defining what we believe should be a light-handed regulatory
framework for IP applications such as voice, one that recognizes
that you cannot simply impose the legacy rules for
circuit-switch telephony on the IP world. Moreover, the FCC's
action on the Pulver.com petition brings a sense of confidence
that neither the federal nor state governments are going to be
in the business of regulating the dynamic Internet application
space," said Matthew J. Flanigan, President of the
Telecommunications Industry Association (TIA).

CompTel/ASCENT
Alliance: "We remain concerned that the FCC may take
too narrow a focus on technology itself without closely
examining the broader ramifications of their policy decisions...
Moreover, we urge the FCC to be mindful that competitive
carriers should continue to have access to last-mile bottleneck
facilities no matter what the technology that is used to deliver
services to consumers," said H. Russell Frisby Jr., CEO of the
CompTel/ASCENT Alliance, an industry group that represents the
competitive telecommunications industry.

SBC
Communications: Edward E. Whitacre, Jr., Chairman and
CEO of SBC, applauded the FCC ruling saying that a nationwide
policy framework is consistent with SBC's call for minimalist
regulation for VoIP and other IP platform services. However, he
said the FCC action "has nothing to do with the AT&T
access charge avoidance scheme, and we're gratified the FCC did
not include AT&T's petition in its upcoming rule making
proceeding."

Raindance:
"While today's decision is certainly a defining moment in
the future of IP communications, the true test still remains to
be seen. We would advocate that the same policies put forth
today also hold true for all VoIP services that interconnect
with traditional telephone systems," said Don Detampel,
President and CEO of Raindance, which provides integrated web
and audio conferencing services. 

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France Telecom and Ericsson to Form Partnership

France Telecom and Ericsson signed a Memorandum of Understanding (MoU), in order to jointly develop IP Multimedia Services for the consumer market. This strategic agreement focuses on developing new services that will enhance consumer experiences and reachability, and leverage on both fixed and mobile network services. The partnership contemplates joint R&D teams, shared R&D funding, and the principle of sharing intellectual property resulting from the partnership. http://www.francetelecom.comhttp://www.ericsson.com

• Earlier this week, France Telecom and Siemens signed a Memorandum of Understanding (MoU) to jointly develop a New Generation Network Architecture for mobile/fixed networks. The partnership contemplates joint R&D efforts, a limited period of exclusivity to leverage usage through generalization, and the sharing of intellectual property resulting from the partnership. Precise terms and conditions of the partnership will be detailed at a later stage.

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Deutsche Telekom Foundation to Promote Knowledge Transfer

Deutsche Telekom established a non-profit foundation based in Bonn to promote the transfer of knowledge and ideas between the government, society and industry. The Deutsche Telekom Foundation, which begins with a EUR 50 million grant, will fund projects in the fields of education, research and innovative technology. http://www.telekom.de

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FCC approves Intelsat's Acquisition of Loral Satellites

The FCC has approved the transfer of Loral's FCC licenses to Intelsat. The approval was required in connection with Intelsat's proposed purchase of the North American satellite assets of Loral Space & Communications Corporation. http://www.intelsat.com

• Intelsat was the highest bidder in an auction for Loral's North American telecommunications satellites. The winning bid was $1.1 billion. The other bidder at the auction was EchoStar Communications Corporation. The deal covers the sale of the in-orbit Telstars 4, 5, 6, 7 and 13, as well as Telstar 8, which is scheduled to be launched in the first half of next year.

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Avaya Raises $251 million in Stock Sale

Avaya sold 14,039,481 shares of newly issued common stock to Morgan Stanley, which reoffered the shares to the public at $17.85 per share. The size of the transaction was approximately $251 million. Avaya said it will use the net proceeds to redeem outstanding senior notes. http://www.avaya.com

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FCC Proposes Rules for Broadband Over Power Lines

The FCC proposed new rules aimed at promoting broadband over power lines (BPL). Specifically, the new rules would:

• require BPL devices to employ adaptive interference mitigation techniques to prevent harmful interference to existing users, such as public safety and amateur radio operators. These techniques would enable BPL devices to cease operations altogether, dynamically reduce transmit power, and/or avoid operating on specific frequencies to prevent harmful interference;



• develop a public database that would include such information as location, operational frequencies, and modulation type of BPL devices, which will facilitate the resolution of interference issues in a timely fashion;



• seek comment on specific RF measurement guidelines for BPL devices and other carrier current systems. These guidelines will ensure that emission measurements for these systems are made in a consistent manner. While the Notice addresses RF measurement guidelines, it does not propose any changes to existing applicable emission limits.

The FCC expects the new rules will facilitate the ability of electric utilities to enter the market for broadband services. The technical changes would also help to dynamically manage the power grid itself, increasing network reliability. http://www.fcc.gov

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FCC Votes 4-to-1 to Exempt Pulver's VoIP from Telco Regulations

FCC Commissioners voted 4-to-1 to approve a Declaratory Ruling that pulver.com's Free World Dialup (FWD) service is neither a "telecommunications service" nor "telecommunications," and therefore not subject to traditional telephone regulation. The FCC also declared FWD to be an unregulated information service that is subject to federal jurisdiction.


Pulver's FWD allows users of broadband Internet access services to make VoIP or other types of peer-to-peer communications directly to other FWD members, without charge.


FCC Commissioner Michael K. Powell said today's ruling "formalizes the Commission's policy of "non-regulation" of the Internet and, in so doing, preserves the Internet as a free and open platform for innovation. Just as important, today's ruling removes barriers to investment and deployment of Internet applications and services by and ensuring that Internet applications remain insulated from unnecessary and harmful economic regulation at both the federal and state levels."


The only vote against Pulver's petition was from Commissioner Michael J. Copps, who said the ruling "presents stark challenges for law enforcement and has implications for universal service, public safety and state and federal relationships that we have yet to untangle or assess. http://www.fcc.gov

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FCC Initiates VoIP Proceedings

The FCC adopted a Notice of Proposed Rulemaking that recognizes not only that Internet services should continue to be subject to minimal regulation, but also that mechanisms to implement important social objectives, such as public safety, emergency 911, law enforcement access, consumer protections and disability access, may change as communications migrate to IP services.


The FCC will initiate a Communications Assistance for Law Enforcement (CALEA) rulemaking proceeding to address the technical issues associated with law-enforcement access to Internet-enabled services. That proceeding will address the scope of covered services, assign responsibility for compliance, and identify the wiretap capabilities required.


The FCC is also seeking public input on which regulatory requirements -- for example, those relating to E911, disability accessibility, access charges, and universal service -- should be extended to different types of Internet services. The Commission is also seeking to define the legal and regulatory framework for each type of Internet service and the relevant jurisdictional considerations for each category. http://www.fcc.gov

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ECI Reports a 9% Sequential Rise in Revenues

ECI Telecom reported Q4 revenues of $109 million, compared to $102 million in Q3 and $137 million in Q4 2002 (the figure for Q4 2002 included revenues from ECI's NGTS Division, which was subsequently spun off). The net loss for Q4 2003 was $13.6 million or $0.13 per share, compared to a net loss of $14.7 million, or $0.14 per share in Q3.


Gross margins were 39.1%.


Doron Inbar, ECI's President and CEO said, "We are pleased to observe both an improving business environment as well as an improvement in the Company's fundamentals. We are also pleased to report another quarter of sequential revenue growth. Orders were very strong in the quarter and we built substantial backlog, especially in the Optical Networks Division. We are encouraged by the performance of our Broadband Access Division which continues to strengthen its competitive position and record strong operating performance. http://www.ecitele.com

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NETGEAR Revenues Rise 15% Sequentially in Q4

NETGEAR reported Q4 net revenue of $86.8 million, up 21% as compared to $71.9 million for Q4 2002 and up 15% compared to $75.8 million in Q3 2003. Net income (GAAP) was $3.9 million, or $0.14 per basic share and $0.12 per diluted share .


NETGEAR cited strong demand for its wireless and broadband products worldwide, as it introduced 12 new products during the quarter. Growth in units and the increase in ASP (average selling price) was driven by the introduction of its "Super G" 108Mbps wireless products in Q3 2003 and the DSL 2 broadband gateways in Q4 2003. Shipments of wireless nodes exceeded one million units in the fourth quarter, representing growth of approximately 30% over the prior third quarter. Shipments of wired and wireless broadband routers/gateways exceeded 675,000 units in the fourth quarter of 2003, representing an increase of approximately 45% over the prior third quarter. Sales of Ethernet switches continued to be strong, growing 7% in units sequentially.


Gross margin for Q4 was 29.1%, as compared to 27.8% in the prior quarter. http://www.netgear.com

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Cox Reaches 2 Million Cable Modem Subscriptions

Cox Communications surpassed 5 million digital service subscriptions in January by reaching key customer milestones in its digital video, Internet and telephone services. These include 2 million digital cable television subscriptions, 2 million high-speed Internet subscriptions and 1 million digital telephone subscriptions. Some highlights from Q4 2003:

• Cox ended Q4 with 11.5 million total RGUs, up 12% for the full year 2003, driven by 31% growth in advanced-service RGUs.



• Added 82,967 Cox Digital Cable customers, ending the year with over 2.1 million digital cable customers. One-third of Cox's video customers choose digital cable service over traditional analog cable. Digital service is now available to 98% of Cox customers.



• Added 144,402 cable modem users in Q4. Cox, which is the third-largest cable Internet service provider in the U.S., said seven out of ten broadband customers in its markets have Cox High Speed Internet instead of DSL service, exceeding the 64% nationwide penetration of cable modem service.



• Added 76,691 Digital phone users. Subscriptions to Cox's Digital Telephone service grew by 38% in 2003, ending the year at 1,000,000 telephone customers. In Cox's most mature markets, one in three homes subscribe to Cox Digital Telephone. The company credits integrated bundling for the growth.

Generated 12% revenue growth during the quarter and year-to-date revenue growth of 14%. http://www.cox.com

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China Netcom Acquire Full Control of Asia Netcom

China Netcom acquired full control of Asia Netcom, a company founded in March 2003 by a consortium lead by CNC which included Newbridge Capital and Softbank Asia Infrastructure Fund. The partners recently agreed to exit the consortium at this time to support CNC in facilitating its restructuring process. Since its launch last year, Asia Netcom's business has been managed as a stand-alone entity. China Netcom said it plans to continue operating Asia Netcom as a separate business and has no immediate plans to fully integrate Asia Netcom into its mainland operations. http://www.asianetcom.com

• China Netcom is a facilities-based incumbent fixed line operator in China. It controls local access networks in 10 northern provinces with 68 million access lines and local loops in 35 key southern cities.

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BCD Forum Develops "Content Aware Network Services"

The BCD Forum launched a new initiative aimed at providing a standard way to signal end-to-end delivery requirements of any content or application to the service control mechanisms of the network and server/software systems along the content delivery path. The goal is to develop a fully integrated network model that prioritizes content and ensures its smooth flow through the network from the content creation point to the consumption point.


The BCD Forum Technology Working Group is undertaking an initiative to define a standard set of APIs that, when implemented in network equipment and applications, will allow network content to flow uninterrupted and with the appropriate priority level. The initial focus is to develop a control framework and industry standards for negotiating realistic end-to-end requirements, mapping them to the components of the delivery path, and communicating with the appropriate subsystem controls.


The BCD Forum said the development of "content-to-network" API standards represents an initiative transcending the entire service delivery infrastructure and complements the current standards work of other network or content-specific industry standards bodies such as the DSL Forum, the IETF, MPLS Forum, ITU-T, and W3C.


The BCD Forum will hold its next meeting on March 1-2, 2004 in Miami.

by Derek Kuhn The Broadband Content Delivery Forum

Distributing Rich Media over Broadband: PVR, Network PVR or VOD -- What's it Going To Be? Customers want a better television service, one that gives them "personalized video" -- watching what they want, when they want, and paying for what they watch -- combined with easy navigation. Both content providers and service providers are looking to the PVR to provide them with much of this personalized video functionality. Service providers need to provide video services to the television to create a mass market entertainment product in order to compete with cable and/or direct to home satellite. These video services cannot be a "me too" offering to cable and satellite; service providers need to take advantage of the two-way platform to create a superior offering. Bundling services, whether it is video, voice, data and/or mobile, is critical to creating a value proposition that resonates with consumers.

http://www.bcdforum.org

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