USA Datanet Deploys Kagoor's Session Border Controller

USA Datanet has chosen Kagoor's VoiceFlow 1000 session border controller to provide NAT traversal for its VoIP services. USA Datanet is deploying the VoiceFlow 1000 in a fault tolerant configuration including dual systems for back up and call continuity in the event of a failure. Kagoor also is providing call detail records, which permits USA Datanet to verify billing accuracy. Financial terms were not disclosed. http://www.kagoor.comhttp://www.usadatanet.com

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New York Rules Vonage is a Phone Company

New York's Public Service Commission ruled that Vonage is a telephone corporation as defined by state law and therefore must obtain a certificate of Public Convenience and Necessity.



The New York state commission said it does not seek to interfere with the rapid deployment of new technologies, but "must ensure that its core public interest concerns, including public safety and network reliability, are met." The state commission holds that Vonage must be subject to the same "limited" regulatory regime which is applied to competitive carriers in New York. Specifically, the commission said Vonage is not subject to economic or rate regulation, but must obtain authorization to provide telephone service and must file a schedule of its rates. http://www.dps.state.ny.us/

• In April 2004, Senator Sununu (R-NH) and Congressman Pickering (R-MS) proposed legislation that would definitely classify VoIP as an "information service," making it subject to federal jurisdiction and limiting potential state and local regulations.



• In September 2003, the Minnesota Public Utilities Commission issued an order for Vonage to comply with state laws governing telecommunications companies. A month later, a U.S. District Court ruled that Vonage is an "information service" and should not be regulated by state laws.

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Tellabs' Acquisition of AFC Combines Transport with Access Solutions

Tellabs will acquire AFC in a cash and stock merger valued at $1.9 billion (19-May-04 prices). The merger brings together Tellabs' portfolio of transport and switching solutions with AFC's products for the access network. Both companies are suppliers to RBOCs. Tellabs also has a significant international presence.



AFC's portfolio includes its flagship AccessMAX platform, which is capable of being configured as a digital loop carrier, DSLAM, or optical line terminal. The AccessMAX was recently enhanced with a new Gateway Processing Engine (GPE) that provides media gateway functionality. The new GPE plug-in card enables AccessMAX systems to use the H.248 media gateway control protocol to interface with a softswitch, such as the Nortel Networks' Succession CS 2000. The combined solution allows subscriber calls initiated from traditional analog telephones to be converted into packets and switched efficiently through a converged packet network.



AFC is a lead supplier for Verizon's FTTP initiative. The company is providing Verizon with the central office and premises electronics, or "active" elements for the FTTP network. Earlier this week, Verizon reconfirmed previously announced plans to pass about 1 million homes in parts of nine states by the end of this year. AFC's FTTP solution is based on a passive optical networking (PON) plug-in card that transforms the AccessMAX platform into an optical line terminal (OLT). The implementation, which is based on the ITU-T G.983 standard, supports a 32:1 PON split with a 20 km reach. The network supplies 622 Mbps downstream and 155 Mbps upstream. The OLT could be deployed either in the central office or in a remote terminal. AFC said a unique architectural element of its FTTP solution is that the AccessMAX integrates voice gateway functionality, enabling packetized voice traffic to be handed off from the same platform to a variety of voice interfaces, including GR-303/V5.2, TR-08/V5.1, and TR-57.



Tellabs' portfolio includes next-generation optical networking, managed access, carrier-class data, voice quality enhancement and cable telephony platforms.



The combined company would employ about 4,100 people worldwide. The deal has been approved by the boards of each company. AFC stockholders will receive 1.55 shares of Tellabs common stock and $7.00 in cash for each AFC share. John Schofield will become chief operating officer and a director of Tellabs. The Tellabs board will be expanded to include three AFC directors, including Schofield, increasing the size of Tellabs' board to 12 members. The deal is expected to close in the second half of 2004. Upon completion of the transaction, Tellabs stockholders will own approximately 75% of the company and AFC stockholders will own 25%. http://www.tellabs.comhttp://www.afc.com

• In April, Tellabs reported its first quarterly profit in 2 years. Q1 revenue was $264 million, up 19% from $223 million in the first quarter of 2003. Tellabs earned 3 cents per share or $13 million in the first quarter of 2004. Excluding restructuring charges of $7 million, Tellabs' non-GAAP earnings were 5 cents per share or $20 million. Tellabs said stronger revenues, improved margins and lower expenses contributed to its first profitable quarter in two years.



• In April, AFC reported Q1 revenue (GAAP) of $92.8 million. Revenues generated by North American Access (NAA), a business unit of Marconi Communications, were included in the results from the 20-Feb-2004 acquisition date through quarter end. Revenues in Q4 2003 were $84.8 million. Revenues for the first quarter of 2003 were $80.5 million. Net loss for Q1 2004 was $2.7 million, or $0.03 loss per share. The first quarter of 2004 included costs associated with the acquisition of NAA. Net income in the fourth quarter of 2003 was $5.7 million, or $0.06 per share.



• In February, 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.



• In 2003, Tellabs acquired Vivace Networks for $135 million in cash and employee stock options. Vivace developed am IP/MPLS edge switch for delivering native Frame Relay, ATM, Ethernet and IP services. It scales to 320 Gbps of full-duplex switching in half of a 7 foot rack and a multi-chassis system could scale up to 256 customer ports at 10 Gbps. A single Universal Line Card accepts a flexible set of different Physical Line Modules spanning DS3 - OC-192/STM-64. The product line has subsequently been enhanced and expanded.

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Comcast Licenses Microsoft TV Software

Comcast purchased a license that enables it to make Microsoft TV Foundation Edition 1.7 software available to up to 5 million customers, with the option to expand the rollout at a later date.



Microsoft TV Foundation Edition is designed to work across a range of set-top boxes, from the tens of millions of set-tops that multiple service operators (MSOs) have in place today to the ongoing deployment of advanced set-tops that enable new services, including dual-tuner DVR, VOD, HDTV, games and more. The software, among the first to support the dual-tuner DVR and HDTV capabilities in Motorola's new DCT 6412 set-top, also helps viewers more easily use these services with an innovative, built-in interactive programming guide (IPG). http://www.microsoft.comhttp://www.comcast.com

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BT Reaches 2.45 Million DSL Users

BT reported preliminary turnover of £18,519 million for its fiscal year ending 31-March-2004, down 1% over the preceding year. Excluding the regulatory reductions to mobile termination rates the underlying turnover increased by 1.4%, which compares to a decline of 1.4% in the preceding quarter.



On the DSL front, BT reported an installed base of 2.45 million Wholesale broadband lines as of 14-May-2004, an increase of 162% on the number of connections 12 months ago, with net additions in the quarter growing at more than 35,000 per week. The increasing base is reflected in a 112% increase in broadband revenues to £165 million in the quarter which brings the full year revenue to £491 million, an increase of 107% over last year. http://www.bt.com

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BT Offers Free DSL Installation

BT launched a special free installation promotion for customers signing up for its Broadband Basic product by July 20. There is normally a £80 installation fee. The deal offers a full speed 512k broadband service for under £20.00 per month. http://www.btplc.com

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Interoute Expands into Eastern Europe with Acquisition

Interoute has acquired Central European Communications Holdings BV (CECOM) and its operating subsidiaries in Czech Republic, Slovakia, Hungary, Austria, Germany, Poland and Romania from Zephyr Communications. The movement eastward mirrors the EU's recent expansion. Financial terms were not disclosed. With POPs in Frankfurt, Leipzig, Berlin, Vienna, Prague, Pilsen, Brno, Ostrava, Bratislava, Budapest, Oradea, Bucharest, Bielsko Biala and Warsaw, this acquisition adds an additional 11 new cities to Interoute's Pan-European network. http://www.interoute.com

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Ciena Reports Q2 Revenue of $75 Million, Loss of $76 Million

Ciena reported Q2 revenue of $74.7 million, representing a 12.5% sequential increase and an increase of 1.6% for the same period a year ago. On a generally accepted accounting principles (GAAP) basis, CIENA's reported net loss for the quarter was $76.2 million, or a net loss of $0.16 per share.



The company ended the quarter with $1.46 billion in cash and long-term investments.



During Q2, Ciena closed its acquisitions of Catena Networks and Internet Photonics. The company also recently announced expected annualized cost savings of $60 to $70 million, including $55 to $65 million at the operating expense level, associated with closing the Company's San Jose, Calif., facility and related headcount reductions.



"While it appears the industry has achieved a certain level of stability, customers are maintaining an overall cautious and focused approach to spending," said CIENA CEO Gary Smith. "Spending in the core of the network remains a secondary priority as service providers focus on getting more users on to their networks and generating more revenue from that traffic. With the addition of new service delivery platforms from Catena and Internet Photonics, CIENA is better positioned to benefit from that focus. "



Due to the broader portfolio, the company expects Q3 revenue to increase by as much as 30% from Q2. http://www.ciena.com

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DISH Network Now Offering Local Channels in all 50 U.S. States

EchoStar Communications' DISH Network) has become the first pay TV company to offer local TV channels in all 50 states and the District of Columbia. This includes 127 local markets across the country. http://www.dishnetwork.com

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BBCOM to Deploy DCL's MeetingServer

BBCOM, a facilities-based service provider headquartered in Los Angeles, will deploy Data Connection's MeetingServer web conferencing solution as part of its low-cost audio conferencing service. The MeetingServer will also be used for private-label conferencing for its wholesale and enterprise customer channels. http://www.dataconnection.com

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AOL Members See 20% to 30% in Spam

In Congressional testimony, Ted Leonsis, Vice Chair of AOL and President of the AOL Core Service, told members of the U.S. Senate Commerce Committee that junk email in AOL member's email inboxes had declined by 20% to 30%, on average, over the past year. At the same time, Mr. Leonsis stated, member awareness of AOL's antispam activities had doubled to almost 80%, as measured by internal customer satisfaction surveys, since early 2003. However, the number of attempted spam messages have increased somewhat. According to Leonsis, that means one thing - "while the spammers are getting more desperate and aggressive, AOL spamfighting is just getting better."http://www.aol.com

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Lucent's Patricia Russo Named Vice Chair of NSTAC

Patricia Russo, chairman and CEO of Lucent Technologies, has been appointed the vice chairman for the National Security Telecommunications Advisory Committee (NSTAC) by President Bush. NSTAC provides industry-based analyses and recommendations to the president regarding policy affecting national security and emergency preparedness (NS/EP) telecommunications. http://www.lucent.com

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Carlos Slim Increases Stake in Global Crossing

TelMex owner Carlos Slim filed papers in five states to increase his ownership stake in Global Crossing to between 10 and 20%. http://www.globalcrossing.comEarlier this week, Global Crossing finalized an agreement with an affiliate of Singapore Technologies Telemedia (ST Telemedia) providing for availability of up to $100 million of secured bridge financing for Global Crossing's business operations.

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