SilkRoad Claims Radical Optical Advance

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San Diego-based start-up SilkRoad Inc. unveiled a new
approach to delivering optical signals last week, with performance claims that go beyond
anything yet seen in fiber communications.

The company sought to buttress assertions that it had found
a way to outstrip existing optical capacity and functionality limits at a demonstration in
New York, where it used a single laser to transmit 840 6-megahertz analog channels a
distance of 100 kilometers, with signal-to-noise output of 60 decibels.

Officials said the system had been shown to operate at 200
gigabits per second over a distance of 300 km at company facilities, and it has the
potential to operate at the ultimate capacity limit of fiber at 10 terabits per second.

The highest-capacity fiber systems in commercial operation
today employ dense-wavelength-division multiplexing, using one laser per lightwave to
achieve extremely high digital rates at unamplified distances of up to 60 km.

Lucent Technologies said earlier this year that it had used
80-wavelength DWDM technology to achieve 400-gbps throughput -- the highest speed yet
achieved over a system designed for commercial use.

But SilkRoad said speed and distance alone are not the
distinguishing features of its technology.

The company also claims that its signal-aggregation and
modulation technique, known as "refractive synchronization," supports the adding
and dropping of signals in meshed arrays with the use of simple beam splitters. This,
SilkRoad asserted, avoids the complexities of all-optical add/drop multiplexers and
cross-connects, which are just coming to market in the DWDM domain.

"This looks like a significant new breakthrough in the
way that you can transmit and the capacity of what you can transmit over fiber," said
Hans von Braun, research director for San Francisco-based Creative Strategies, a
computer-industry analyst and consulting firm.

Von Braun -- one of a handful of analysts who were invited
to see the SilkRoad technology at a recent demonstration in San Diego -- said his only
question regarding the viability of the system was SilkRoad's ability to finance and
manage the transition from prototype to high-volume product.

"I'm not sure that they have the ability to move
to commercial operations without outside financing, but they say they do," von Braun
said.

SilkRoad officials said they already have prototypes
undergoing field tests, and they will be able to ship field units that are compliant with
telecommunications-operations-management specifications by the beginning of the second
quarter of 1999.

A number of long-distance carriers and competitive
local-exchange carriers are testing the technology, said Rob Gorman, vice president of
marketing and sales at SilkRoad. The company is also talking with potential vendor
partners, with the intention of maintaining full control over the design and manufacturing
process, he added.

While declining to discuss specific pricing, Gorman
asserted that the cost of the SilkRoad system is so low in comparison with DWDM systems
that its availability will "cause a serious change in the whole capital-cost
structure" of carriers that deploy it.

"People are excited about the design implications,
where they don't have to replace installed infrastructure or add a whole lot of
equipment to achieve this level of performance," Gorman said, noting that the system
is indifferent to the type of fiber used.

Besides carriers and vendors that have signed nondisclosure
agreements, very few outsiders have had a chance to weigh the merits of SilkRoad's
claims. Fiber network experts at Bell Communications Research (Bellcore), for example, who
are typically privy to the latest advances in optical research, said through a spokeswoman
that they knew virtually nothing about the SilkRoad technology.

Von Braun said he had talked with officials at Sprint
Corp., one of the carriers testing the system, about its experiences with the technology.

"They were very impressed," he added.

As described by Gorman, the SilkRoad technology is a
variation on coherent-system technology, which, in the late 1980s, was seen as the means
by which fiber's ultimate potential could be realized.

But coherent systems, which use the frequency range and
other dynamics of the optical signal itself to transmit information, proved to be too
unstable to put into commercial operation, and they were superceded by DWDM as the next
step to high capacity over fiber.

SilkRoad said it has overcome the coherent-system problems
through the patented ideas of its chairman and chief technical officer, James Palmer.

These concepts have to do with the narrowing of laser-line
widths to minimize dispersion, using what is known as the "Palmer Transform" to
stabilize the laser onto its optimal frequency, and with new means of mixing RF signals
for modulation onto the light beam.

In the modulation process, the system takes in all of the
various types of RF signals -- whether they're digital or analog, TV or voice,
Internet protocol or asynchronous transfer mode -- shaving away the upper sideband and
assigning a clock sampling frequency value in the lower sideband to each signal, Gorman
said.

"Every signal has its own spectral output, which
allows us to coherently mix them onto the beam," he added.

The clock values are assigned to the beam via an external
modulator, so that the four-dimensional space and time values of each photon are put to
use in carrying the message. Palmer reworked the original Maxwell electromagnetic
equations to come up with an exact time dilation in multiple dimensions, allowing for more
signal information to be added to a given point of light than is possible with
conventional two-dimensional multiplexing, Gorman explained.

Because the signal input is not altered from its native
format in the SilkRoad system, the technology is ideally suited for the AM-signaling
requirements in cable, Gorman asserted. Moreover, the low attenuation and high linearity
of the narrow-line-width beam allows the system to deliver AM signals at very high
carrier-to-noise levels over long distances, he added.

"We realize that this technology would be of great use
to the cable industry," Gorman said. "We want to open a dialogue with cable
companies as soon as possible."

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