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Utility Telecom Has a Future – PurOptix

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If you are a subscriber to the free daily email from Scientech, you saw this on July 30:
“Telecom: Utilities Remain In the Loop” – By Ken Silverstein
(http://secure.scientech.com/issuealert/article.asp?id=1326)

It begins: “…When some utilities entered the communications loop and began offering fiber-optic services, success was supposed to be a slam-dunk. But the market became saturated with bandwidth capacity and prospects for such achievement became more elusive. In some cases, companies have entirely written off their losses or ceased operations.

But contrary to conventional wisdom, utilities that made cautious investments in fiber optics could turn out to be winners. And while they won’t get satisfactory returns in the short run, the endeavors could pay off over time as the economy rebounds and as consumers demand sophisticated communications offerings that require more bandwidth.”

———

This recalled to mind a company I’ve been acquainted with for some time that may hold interest for those utilities that stand to benefit from the rebound Ken talks about.

PurOptix, Inc. has developed a unique and proprietary network system they call AON (Advanced Optical Network), that allows utilities, telephone and cable companies to offer a variety of services and content on an all fiber-optic based network. They’ve been making steady progress right through the telecom bust, and are set to install their first trial system later this year. They have just completed the first close of an “A” round, and are currently seeking additional investors.

—- Company Overview (adapted from company materials)

Seeing “Fiber-to-the-Home” as the ultimate network platform, and observing that Telco and CATV networks cannot be adapted support the demand for Internet and other services, PurOptix developed a cost effective all fiber-optic system which surpasses PONs (passive optical) networks based on HFC and “shared” architecture.

The PurOptix AON system provides a platform to deliver traditional telephone, television, and Internet services, and new advanced services like interactive and HDTV, Ultra high-speed Internet, true Video-on-Demand, and highly secure VPNs (Virtual Private Network connections). Applications for PurOptix’ Optical Concentrators and Gateways range from enterprise to residential service delivery. PurOptix is initially targeting leading network operators with existing fiber optic infrastructure in the Utility, Telco, and CATV segments that have aggressive plans to advance their telecommunications business.

The AON System delivers bi-directional information at 155 Mbps and provides extremely secure dedicated connections through its Private Virtual Circuit technology. PurOptix has developed strategic relationships with leading hardware and software vendors including Marconi, SGI, and Sun.

The company has secured a Pilot Network Deployment contract with Batelco, the Bahrain Telecommunications Company and is projecting initial follow-on revenues from this engagement of approximately $2 million this year for engineering services, software licenses, and hardware for initial network installations. The Company is in discussions for a contract for production network deployments with Batelco in later this year with rollouts beginning in the first half of 2003. The last-mile optical market is expected to exceed $2.5 billion over the next three years ? a market that is on the verge of a revolutionary change. PurOptix is projecting revenues of $30 million by 2003 and over $150 million by 2005.

Problem/Opportunity–
With billions of dollars spent laying fiber optic cable, network operators have a dire need to leverage this infrastructure by offering revenue generating telecommunications and media-rich services to businesses and consumers. PurOptix’s end-to-end optical solution enables network operators to support a broader offering of voice, audio, video, high-speed Internet, and data communications services in a secure, full duplex environment.

Products/Solution–
The PurOptix AON System family of products provides a scalable community and metropolitan network platform for fiber-optic infrastructures. The proprietary design delivers maximum bandwidth to each subscriber and maximum return for the network operator’s capital investment. The PurOptix system can be implemented as an open network, an exclusive closed network, or any variation therein for delivery of Internet, telephone, television, video and data services.

The first product set, the AON System (Advanced Optical Network), consists of four proprietary technologies ?

1. Network Operating System software running on carrier grade OEM network servers and switches;
2. Low cost ATM concentrator;
3. Optical gateways for commercial and residential applications; and
4. High speed internet enabled-digital settop box.

The ATM concentrator and Optical gateways devices can also be sold and deployed in existing telco and CATV optical network applications serving business customers enabling network operators to seamlessly integrate ISPs, broadband content providers, phone, TV, and other digital service providers via fiber to the home or enterprise.

Markets
PurOptix is first targeting utilities moving to generate additional revenues over existing fiber infrastructure. Then, PurOptix will be the system provider of choice for incumbent telcos and CATV companies to migrate from copper/cable to all fiber optic plant. Internationally, PurOptix is targeting major network operators who are rapidly deploying new optical infrastructure due in part to a global environment of privatization and deregulation. Similar to Batelco, these companies are building only fiber networks in new developments and are aggressively replacing copper infrastructure.

Competition
Manufacturers of PON (Passive Optical Network) technologies have begun to announce field trials and some slightly different Ethernet-based solutions are moving forward as well. Hybrid Fiber/Coax (HFC) and Digital Subscriber Line (DSL) systems manufacturers are focused on non-optical plays and are not considered to be direct competitors.

PurOptix’ Competitive Advantage
– PONs face a shortage of upstream bandwidth for delivery of advanced two-way services–they are bandwidth constrained. PON’s additionally are difficult to deploy and have proven to be too expensive (both opex and capex) to be a viable solution on a large scale. The AON System delivers 155 Mbps to and from the subscriber today. HFC and competing fiber solutions are flawed by following a “broadcast” architecture which consumes the majority of the bandwidth available. These systems also restrict network operator’s business options due to the legacy architectures and restricted access models. The AON System manages bandwidth efficiently, is infinitely scalable, and offers numerous flexible business implementations. The flexibility in business modeling stems from the open architecture design which allows for variations from full wholesale implementation to the traditional retail provider deployment.

– Unlike competing solutions, PurOptix AON System is completely secure from the subscriber to any point on the network or any external network node connected via PVCs (Private Virtual Circuit). In addition, the PurOptix devices cannot be cloned or pirated, absolutely barring theft of service on the network.

– Using ATM as the core transport we provide proven reliability and allow for easy integration into most networks today. Equipment can be implemented in standard ATM and SONET networks leveraging the installed base of equipment.

– Upgrades in the future to competitor platforms will be costly due to architecture limitations and limited service capability. The AON System can be upgraded easily as bandwidth needs grow.

The website has detailed technical information:
http://www.puroptix.com

Stan Gafner President & CEO
Puroptix Inc., Carlsbad CA
stan@puroptix.com 760.804.7890 x5101

==================
Subject: UFTO Note- E-lecTrade Enables Trading of Structured Products
Date: Thu, 01 Aug 2002

E-lecTrade has developed a sophisticated solution for buyers and sellers of power to manage and procure complex structured power contracts that cost-effectively and with a proper risk profile meet their needs for the supply and demand of electricity.

Most power contracts are for “standard products”, fixed large blocks of power at constant MWs for many hours(think baseload). Everything else under the load curve (think intermediate and peak) needs to be filled in–with “structured products”. Despite the fact that these needs represent 50% of all transacted power, no efficient process for executing structured power transactions exists. RFPs are messy and time consuming, and most of the need is met on the spot market.

E-lecTrade’s sophisticated technology manages the assembly, evaluation, and buying and selling of “structured products” — contracts to purchase or sell power in which either the volume and price of power or duration of a contract varies over time.

E-lecTrade’s products include ShapedPowerTM, %PoolTM, Swing Options, Generation Tolling, Ancillary Services, Transmission, Real Time Power and Standard Power. In addition, the platform provides real-time risk measurement and portfolio management capabilities including MTM, VaR and Scenario analysis seamlessly integrated with the marketplace. The technology can be used both as principal-driven private marketplace serving its own customers and as an independent exchange. Energy and Power Risk Magazine recently named E-lecTrade the Energy Innovation of the Year.
—— ——
Very recently however, electronic trading has all but collapsed in the US, due to credit risk (and career risk aversion on the part of utility personnel) in the entire power industry, and with it the E-lecTrade’s “runway” to grow the business. As a result, the company is now for sale. Discussions are already underway with several potential buyers.

The original business model was to operate an exchange; 24 companies have already signed up as participants. Now, a new owner of the company would have exclusive control of the software and IP assets, with the option to leave the exchange in operation or not.

For a utility with many large commercial and industrial customers, a private exchange based on E-lecTrade’s unique platform could be a powerful tool to serve customers better in managing their forward structured needs. Large C&I customers could manage their portfolios, get offers from the utility, and even bid to sell power back (i.e. DSM).

I have a six page technical overview document from the company, which I can supply on request. The company website is http://www.e-lectrade.com

For more information, contact:
Anil Suri, President and CEO
E-lecTrade, Inc. Tarrytown, NY

914- 524-7390 aksuri@e-lectrade.com

Wireless Laser Data Link

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Subject: UFTO Note – Wireless Laser Data Link
Date: Wed, 07 Jan 1998

fSONA Wireless Laser Data Link

—————————
(The founder of this company is a personal friend. Though it’s not directly related to utilities, I pass this summary along to you in the chance that it may mesh with your company’s strategic directions. This is a rare instance where the market need was identified first, and the technology identified later. A complete business plan is available. Feel free to contact the company directly, or call me first. For your information, I have a finders fee agreement with the company.)

—————————

fSONA Corporation, Vancouver, B.C., has a unique laser communications technology developed by the British Telecom (BT) Laboratories in the UK. fSONA has licensed from BT the exclusive, world-wide rights to line of sight transmission technology that provides optical wireless links at speeds up to 1 Gigabit per second (Gbps) for distances up to 4 kilometers. The Company’s goal is to market high speed data transmission or bandwidth products for use in the Telecommunications and Internet services industry.

The data rates attainable with lasercom make it arguably the most cost-effective solution for today’s short haul high speed telecommunications market. Laser links are ideally suited for campus environments and metropolitan locations where interactive, multimedia-based applications, such as video conferencing and telemedicine require significant bandwidth.

Using a combination of optics and photonics technology, fSONA’s laser or optical wireless communications products offer the following advantages over radio-based (RF) products in the access and Local Area Network (LAN) interconnect marketplace:

– Fiber-optic speed.
– Deployable in 24 hours.
– No requirement for radio licensing.
– Secure point to point link between networks.
– Freedom from electro-magnetic (EM) interference

fSONA’s advantage over other laser communication products include:

– Eye safety,
– Lower cost for similar bandwidth and distance capacity,
– Automatic beam alignment to compensate for movement and
building sway,
– Proprietary BT receiver technology that provides vastly improved
performance during periods of atmospheric turbulence.

fSONA’s first commercially available system, the SONAbeam™155, is scheduled for launch in 1998. The SONAbeam™ units consist of off-the-shelf, readily available components from a wide variety of optical and electronics manufacturers in the US and Canada. This system will be capable of transmitting and receiving data at speeds up to 155 megabits per second (Mbps) allowing compatibility with SONET OC-3 format and ATM. fSONA products allow fiber optic network developers the ability to offer fiber optic speed to existing customers and to extend their networks to “off-fiber” high bandwidth customers.

Manufacturing of the first 50 units with product specifications, sourced components, resources and facilities are all ready to commence as soon as financing is in place. Manufacturing of >50 units will be outsourced to one of a short list of suitable manufacturers identified by fSONA.

Sales and Marketing
fSONA is pursuing a two pronged marketing strategy. One, direct sales to Competitive Access Providers (CAPs), Internet Service Providers (ISPs), and large Corporate networks. Two, establishing distribution agreements with Network Equipment Manufacturers (NEMs), System Integrators, and Access Providers. Plans to install the SONAbeam™155 optical wireless transmission products are currently underway at two customer sites in downtown Vancouver. One of these customers has been using laser links successfully for the past year, and is keen to trial the longer distance SONAbeam™ units.

In addition to its two trial customers in Vancouver, fSONA has initiated discussions with a number of potential customers in the Vancouver/Seattle area, who are interested in the results from the trial. Ascend Communications Corp has given fSONA an expression of interest in the trial; one of the benefits that a network OEM would achieve with a product like the SONAbeam155 is the ability to offer customers up to 4km LAN or WAN extensions from their existing equipment and by-pass leased lines for inter LAN connectivity.

fSONA will introduce the SONAbeam™622 and the SONAbeam™1G in its second and third year of operations. These products offer higher bandwidth at the OC-12 (622Mbps) and OC-24 (1.2Gbps) network standards which are currently used only by major trunk carriers such as AT&T and MCI. The introduction of these products will coincide with expanded bandwidth demand anticipated by corporate clients.

Contact:
Theresa Carbonneau, CEO
fSONA Corporation Tel 604 531 2735
13086 Summerhill Crescent, Fax 604 531 2742
White Rock e-mail fsona@syntagma.com
BC V4A 7Y1
Canada.

Telecomm over the power line in UK

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(I don’t normally just pass along press releases, but this one looked too important and I didn’t want to take the chance that you would miss seeing it.)

Wednesday October 8 4:55 AM EDT
Company Press Release

Nortel (Northern Telecom) and Norweb Communications Achieve Technology Breakthrough That Will Open a New Wave of Internet Growth

LONDON, Oct. 8 /PRNewswire/ – Nortel (Northern Telecom) and Norweb Communications, a business unit of United Utilities plc. of Great Britain, today announced that they have developed jointly a new technology that allows data to be transferred over electrical power lines into the home at speeds of more than one megabit per second-up to 10 times faster than ISDN, currently the fastest generally available speed. The breakthrough has the potential to open a new wave of demand for Internet services in the UK and Europe.

Nortel has developed the technology at its European Research and Development laboratories in Harlow, UK, in co-operation with Norweb Communications. Recent trials on the Norweb Communications network have been completed successfully and the technology is available for deployment.

The technology, which enables electrical companies to convert their power infrastructures into information access networks, will be initially marketed in the UK, Europe and Asia Pacific.

It allows electrical companies to provide a service that solves the three major problems facing international Internet market acceptance-access to consumers’ homes, data transmission rates and capital cost:

– By giving customers access to the Internet through their existing electrical supply system, the technology is available to virtually anyone. It offers permanent on-line connection with the potential for lower charges;

– The new technology enables data to be transmitted at rates of more than one megabit per second by using a patented technology that screens the data from electrical interference on the host power line, a long sought-after goal in telecommunications;

– Investment costs for the electrical companies are low compared to those envisioned for other broadband data access systems. Due to the nature of this technology, it can be rolled out in discrete, targeted phases. Utilities not wishing to operate data services also have the option of charging a right-to-use fee to an operating company for accessing their plant. End users require a computer card comparable in cost to a conventional ISDN terminal adapter, but offering 10 times the peak bandwidth.

The new technology will enable the introduction of Internet-based applications such as electronic commerce, teleworking, web broadcast media, entertainment and Internet telephony on a mass market scale.

The two companies have been working together on this development for the last three years and it is subject to a number of patents filed by Nortel and Norweb Communications. Norweb Communications is widely recognized within the power sector as a leader in research into broadband communications over power lines, having started work in this area in 1990.

Electricity utilities in Europe and the Asia Pacific region have already expressed significant interest.

Peter Dudley, a vice-president of Nortel, comments: “The rate of Internet take up and the volume of data traffic carried over the Internet has been one of the most striking business developments of the current decade, but speed of access remains a bottleneck for most users. As one of the first practical low-cost answers to the problem of high-speed access to the Internet this new technology will unleash the next wave of net growth.”

Mark Ballett, Managing Director of Norweb Communications, comments: “Norweb Communications has championed the use of electrical networks for voice and data services for several years and we are delighted to now be in a position to announce the launch of the first commercial products. This technology will allow us to use existing infrastructure to establish a strongly differentiated service offering in the northwest residential and small business market.”

Nortel will be opening a conformance center in Harlow, UK, for hardware and software suppliers who are interested in certifying their products for use on this new service.

Norweb Communications, part of United Utilities plc, provides an extensive range of advanced voice and data services and has achieved significant success in providing resilient networks for businesses throughout the northwest region of the UK. The company plans to use power line technology to provide public access networks for residential customers in the region.

United Utilities has combined capability in electricity, gas and telecom. This new technology will strengthen its competitiveness as a multi-utility service provider.

Nortel had a 1996 turnover of $US 3 billion in Europe, operating both independently and through its joint ventures with the Lagardere Group in France (Matra Communications and Nortel Matra Cellular), Olivetti SpA in Italy (Sixtel) and Daimler-Benz Aerospace AG in Germany (Nortel Dasa Network Systems). The company employs approximately 16,000 people across Europe in Research and Development, manufacturing and sales.

Nortel works with customers worldwide to design build and integrate digital networks – for information, entertainment, education and business – offering one of the broadest choices of network solutions in the industry.

Nortel had 1996 revenues of $US 12.8 billion and has approximately 68,000 employees worldwide.

Bellcore Developing Specs for Flywheel Batteries for Use in Telecomm

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Subject: UFTO Note – Bellcore Developing Specs for Flywheel Batteries for Use in Telecomm
Date: Tue, 28 Jan 1997 12:33:55 -0800
From: Ed Beardsworth <edbeards@ufto.com>

————————————————————–
| ** UFTO ** Edward Beardsworth ** Consultant
| 951 Lincoln Ave. tel 415-328-5670
| Palo Alto CA 94301-3041 fax 415-328-5675
| http://www.ufto.com edbeards@ufto.com
————————————————————–

Bellcore Developing Specs for Flywheel Batteries for Use in Telecomm

Bellcore (now owned by SAIC, but still representing the technical needs of the RBOCs) is developing what they call “generic requirements” for flywheel batteries to meet growing needs for extremely reliable back up power on the telecomm system. The key goals are high reliability, low maintenance and long life in what they call “outside plant batteries,” which support equipment in remote locations. Systems would range from 0.1 to 5 kWh, over several hours (i.e. relatively low power). Their view is that they have an existing need that provides a good first application and sizable first market. Their leadership could prove useful to the overall development of flywheel batteries, which may take on a much larger role in storage, power quality and uninterruptible power applications, where utilities have a strong interest.

They are inviting outside parties to participate with them in this process, as outlined in the announcement attached below. The cost schedule hasn’t been determined as yet.

Bellcore has had very little contact with utilities thus far, but they would like to, particularly to take into account issues of seismic effects. (Only one utility was represented at the safety forum in November 1995. Incidentally, the documentation of that meeting is available from Bellcore for a fee of $200.)

_______________________________________________________
INVITATION TO FUND AND PARTICIPATE
BELLCORE GENERIC REQUIREMENTS TO SUPPORT FLYWHEEL ENERGY STORAGE SYSTEMS (FESS) (NEW GR)

Bellcore has been active in the potential use of Flywheel Energy Storage Systems (FESS) in telecommunications for over three years. This was motivated by our involvement in dealing with the many problems associated with valve-regulated lead-acid batteries in the telecommunications outside plant environment. Bellcore envisions FESSs as eventually replacing those batteries in that environment and perhaps many other applications.

Bellcore convened a symposium on the subject of employing FESS in telecommunications in July 1995 in San Diego, and held a safety forum on FESS on November 15, 1995 at Bellcore’s facility in Chester, New Jersey. Bellcore has an experimental FESS test facility in Chester and has an operating 5kwh system and some smaller FESSs operating experimentally. Bellcore conducted a basic materials investigation in 1996 that consisted of iterative computer modeling and testing of the impact of carbon composites into steel containment targets. This has led to a three-dimensional finite element model that enables us to identify generic design requirements for containment regimes.

Bellcore now invites all interested members of the flywheel energy storage system industry and local exchange and interexchange carriers, and any other members of the telecommunications industry to fund and participate in the development of a new generic requirements document to specify functionality and operability requirements for FESSs in telecommunications applications.

Bellcore proposes to convene a Bellcore Technical Forum (BTF) for funders to address development of a new Bellcore GR covering proposed requirements for FESS applications. The BTF would consist of one or more meetings to:

– Scope out the issues associated with FESS functionality in telecommunications, as well as operational issues, such as Network Equipment Building Standards (NEBS), Lightning and Earthquake concerns, power concerns, and physical design. – Develop a schedule for funders’ participation in development of a draft GR – Determine if additional Industry input will be necessary – Produce and publish a Bellcore GR on FESS in Telecommunications.

It is expected that the development of the GR will take most of 1997 to complete.

Funders will have the opportunity to provide nonproprietary input into the technical descriptions of the material, to comment on all draft text, to receive the GR and Issues List Reports(ILRs), if any are funded, pertaining to this release of the GR, and to exercise other rights and undertake responsibilities as provided by the applicable funding agreements with Bellcore and by law. Interactions beyond any meetings with funders may be via letters, conference calls, faxes or electronic mail.

It should be noted that Bellcore does not make procurement decisions for any Bellcore client company. Bellcore activities that involve industry interactions in no way indicate a potential purchase or selection decision by any Bellcore client company.

Bellcore reserves the right to alter or withdraw this proposal if there is insufficient interest in this invitation.

If your company is interested in funding and participating in the development of these proposed Bellcore Generic Requirements, please contact Bellcore by March 31, 1997:

Lawrence M. Slavin Bellcore 445 South Street, MCC 1C-117B Morristown, NJ 07960
201-829-4330 201-829-5886 (FAX) lslavin@notes.cc.bellcore.com