Lucent's new WaveStar OLS 1.6T system is capable of delivering Internet and voice traffic over fiber-optic networks at speeds of up to 1.6 terabits. The technology uses a method called dense wave division multiplexing (DWDM).
Time Warner Telecom, a competitive local phone and Internet provider for businesses, signed a three-year, $100 million agreement to install the Lucent gear. That upgrade is expected to be completed in some western states by midyear. Time Warner Telecom acquired much of its western network assets for $690 million through a recent GST Telecommunications bankruptcy sale.
Lucent's new technology will allow Time Warner Telecom to expand the capacity of its networks. The technology has the ability to carry 320 million one-page e-mail messages simultaneously, or one for every person in the United States and Canada combined, according to the company.
The system offers yet another advance in the optical networking industry, which is frequently compared with the semiconductor industry because of the rapid pace of innovation. Chipmakers such as Intel and Advanced Micro Devices are known for their speed and cost boosts, which tend to occur roughly on an 18-month cycle.
Fiber-optic technologies have followed a similar path in recent years, dramatically lowering the cost of the networks, speeding Internet traffic, and creating a high-flying class of optical stocks. Lucent, for example, just doubled the capacity of its WaveStar system last April, from 400 gigabits to 800 gigabits.
Lucent will initially deliver the system with a capacity of 800 gigabits, though Time Warner Telecom will boost the capacity to 1.6 terabits.
The agreement is an expansion of an existing $250 million deal the two companies signed in 1998.
Lucent has had a difficult year that saw profit warnings, poor financial results, a slumping stock, and the ouster of former Chief Executive Richard McGinn.
Time Warner Telecom primarily serves the Northeastern United States, though it serves parts of Texas and Florida as well. The company also operates a nationwide Internet backbone network.