With its sights set on developing next-generation network architectures, Scientific-Atlanta Inc. recently invested $8 million in Pleasanton, Calif.-based Alloptic Inc., a developer of passive-optical-networking technologies.
S-A and Alloptic also signed a five-year joint development and sales/marketing contract to bring gigabit Ethernet PON products to market.
The stake in Alloptic follows S-A's investments in Bookham Technology plc in July 1999 and Luminous Networks Inc. this past April, providing S-A with emerging optical technologies to advance its vision of meeting future bandwidth needs with key "last-mile" fiber optic technologies.
Ultimately, vice president of marketing and network architectures Paul Connolly said, S-A is combining its internal research-and-development and investment efforts to facilitate "more and more bits delivered to users at a lower cost" and to enhance the transport of voice, video and data.
In seeking out companies in which to invest, Connolly said, S-A looks for "choke points," or gaps in its internal technologies, as it develops its next-generation "Remote Terminal" network architecture, which adds a third ring to traditional "Ring-Ring-Star" hybrid fiber-coaxial network designs.
By pursuing this architecture, S-A is engaged in a longer-term play to develop a scheme in which fiber is brought closer and closer to a home or business.
Alloptic develops PON technologies that rely on gigabit Ethernet as a means of transport. The company was formed last year with former executives from such telecommunications stalwarts as Nortel Networks, Alcatel Alsthom and Pacific Bell. Its technology has largely stayed within the confines of test labs.
According to vice president of research and development Gerry Pesavento, Alloptic is working on boxes that sit on both ends of access networks: at the curb or side of a home and in a telco's central office or cable operator's headend.
The boxes would then bridge the last mile of a point-to-multipoint fiber optic network, he added.
By targeting fiber-to-the-curb, fiber-to-the-home and fiber-to-the-building services and architectures, Alloptic's technology is distinguished by its embrace of Internet protocol and Ethernet as transport schemes, instead of traditional asynchronous transfer mode, Pesavento said.
All voice, video and data traffic in Alloptic's test broadband-digital network is packetized, with analog-TV signals running on a separate layer.
Most PON equipment today is based on an ATM specification-"Full Service Access Network"-designed to deliver traffic at OC-3 (155-megabit-per-second) rates.
While ATM is good for sending mixed protocols down a network, "ATM is really losing its footing to IP and to Ethernet, and we recognized that early on," Pesavento said.
With the advent of IP routers with built-in quality of service, ATM switching as a core optical-networking technology is on the decline, he added. As more network traffic becomes IP-based, transporting IP within the 53-byte-sized ATM cells becomes inefficient, with carriers basically paying a "cell tax" based on the size and complexity of ATM cells.
"The momentum of IP is unstoppable," Pesavento said.
Alloptic's technology boosts speeds in PONs to gigabit rates, while handling IP traffic with QoS with its proprietary and patented technology.
Alloptic wants to incorporate S-A's prowess in delivering video, including analog video.
"Analog video is going to be around for a long time," Pesavento said. "Scientific-Atlanta, better than anyone, understands that."
S-A also understands that bandwidth demands are ready to explode as more and more IP services force fiber deeper into the network.
Connolly explained that as more voice and data traffic is mapped onto HFC networks, and as penetration rates for voice and data services rise, there is a need to turn to faster technologies.
With Ethernet PON technologies, networks can run voice, video and data on a single fiber to neighborhoods where smaller nodes can share 1 GB of information per transmitter.
The challenge on the downstream path is to have enough optical power to compensate for the loss of active electronics, or amplifiers, in a PON scheme.
In response, S-A has developed a "cladding pump" optical amplifier that generates enough power through its double-cladding design to drive an optical signal through a PON network.
Since S-A, with its RT architecture, is looking at delivering data beyond speeds specified by the Data Over Cable Service Interface Specification set of protocols, it is targeting the new class of cable-network builders, such as Denver-based Wide-OpenWest LLC.
"We are working very closely with that class of operators," Connolly said. "Clearly, DOCSIS is a very acceptable technology today. At the same time, we're looking beyond that."
Investing in companies like Bookham, Alloptic and Luminous, coupled with internal development teams, S-A hopes to move "closer and closer to hitting the right economic point for fiber-to-the-home," Connolly added.
Luminous brings gigabit IP over fiber technologies, while Bookham develops integrated optical silicon. Luminous is far down the road to providing protected switched fiber rings that typically have been SONET-based (synchronous optical network), while at the same time ensuring QoS.
Bookham's silicon, Connolly said, facilitates dense-wave-division-multiplexing muxing and demuxing on one chip, allowing individual wavelengths of light to be delivered down to the node level.
Incidentally, S-A is getting a nice return on its investments. Its $13 million stake in Bookham is worth a tidy $400 million, Connolly said. Bookham went public in April, and it had a market capitalization of around $6.1 billion.