Lasers aim to cut broadband bottleneck

Free-space lasers fly the last mile Dan Hesse, CEO, Terabeam

Although the technology is invisible, one thing is clear about laser-based communications networks: They are closer than ever to becoming a reality.

For months, communications carriers and equipment makers have tested new technologies, known as "free-space" lasers or sometimes "optical wireless," to deliver high-speed network connections to business customers. Until recently the technology has been relegated to white board theories, research and development labs and trial projects.

Now start-ups Terabeam, a Seattle-based laser service provider, and FSONA Communications, a laser equipment maker, are set to announce for the first time the commercial availability of their products and services within the next week.

"It's becoming apparent that this stuff is ready for primetime," said Jeff Kagan, an independent Atlanta-based communications industry analyst. "Now it's time for the pressure test by bringing it to market and signing up customers and seeing if it works.

"I can't imagine it's going to be a flawless rollout. Every new technology has its problems," Kagan said. "(But) if it works, it's poised to be a huge hit."

Using invisible lasers that are harmless to the human eye, the technology allows high-speed Internet access and corporate network connections to be beamed to business customers through an office window. Laser boosters tout the technology as faster than competing wireless systems and cheaper than direct fiber-optic connections, which require digging up city streets.

The lasers aim to solve a significant problem facing the communications industry. Massive high-capacity nationwide networks are being completed, but the networks in metropolitan areas are only just beginning to be built and upgraded. Therefore, business customers often must wait months for a connection to provide them with Internet access or a link to a remote office.

But the laser technology is not a sure-fire hit. For one, it is susceptible to outages from thick fog, which can interfere with a laser's path and could limit its reliability. And analysts say the laser sector will face challenges such as a skeptical marketplace and a limited window of opportunity before competing technologies such as fixed wireless and direct fiber-optic connections take hold.

A ready rival
Still, executives believe the lasers are ready to compete with other data-networking alternatives.

"We feel that we're ready for commercial launch," said Terabeam Chief Executive

Dan Hesse, who walked away from a potentially large payday from AT&T Wireless to join the laser company.

Terabeam, which offers data connections at speeds of up to 1gbps (gigabits per second), has begun selling its service commercially in Seattle in recent weeks and intends to make a formal marketing splash next month, executives said. Terabeam has nabbed two local customers--digital advertising firm Avenue A and Simpson Investment, the investment arm of a timber and paper company--and will soon activate service for a third. The company plans to offer service in five additional U.S. cities by the end of the year, executives said.

"Other technologies require time-consuming digging and getting permits. We have the ability to take the optical signal that comes into the city via big, fat cables and extend that optical signal right through the window. We see ourselves as an extension of fiber," Hesse said.

Terabeam's strategy is somewhat unique in that the company plans to operate both as a service provider and as a laser equipment maker. The plan is something similar to the early days at AT&T when the company's role was that of both carrier and gear manufacturer.

The company has signed a partnership with Lucent Technologies to jointly develop the equipment. Lucent owns a 30 percent stake in Terabeam Labs, the equipment joint venture that executives expect to eventually spin off in a few years.

Separately, FSONA plans to announce details of its first optical laser products for carriers next week. The company intends to begin selling its SONAbeam 155-2 product, a laser system capable of delivering data at speeds of 155mbps (megabits per second), in April with volume shipments in May, according to executives. The product will have a range of about 1.25 miles or 2 kilometers and will retail at $20,000 for a complete two-way link.

"We're planning to be the first to mass-produce optical wireless products," said FSONA Chief Technical Officer Stephen Mecherle. "This product is the inaugural product in that philosophy."

Spreading wireless wings
The company, which builds its own products, recently expanded into a new 30,000-square foot manufacturing facility in Vancouver from a smaller 10,000-square foot building.

FSONA also has had some initial talks with potential overseas manufacturing partners in preparation for future expansion, executives said. The company is planning a lower-cost short-range 155mbps version of its laser system and a system capable of speeds of 622mbps later this year.

Many industry analysts are intrigued by the technology, but questions remain about its reliability. FSONA estimates its uptime for longer distances at about 99 percent, which falls short of communications industry standards, but is capable of 99.9 percent uptime at shorter ranges. The company also will offer optional radio-based backup systems to ensure 99.999 percent reliability.

For its part, Terabeam executives believe their network is capable of delivering 99.9 percent uptime, equivalent to a total of about one day of outage time per year. The technology and its reliability was enough to attract the interest of Lucent.

Similarly, Avenue A is pleased with Terabeam's service thus far, particularly with how quickly the company activated service. Comparable connections can take months to provision from the Baby Bell local phone companies and others such as WorldCom and Sprint.

"It just takes forever to get circuits (from major service providers)," said Jamie Marra, chief information officer at Avenue A and an early Terabeam customer. "If what you're always telling me is 90 days, I may not go with you next time."

Indeed, Marra turned to Terabeam instead.

"From the time we said, 'What have you got?' to the time they installed it was about three weeks," Marra said. "They got us up quickly, and they gave it to us at a comparable price to the Baby Bells."

Terabeam and FSONA are not alone in their pursuit of communications riches. Other laser players include AirFiber, which signed a partnership with Nortel Networks, Optical Access and LightPointe Communications.

Strength in numbers
Collectively, the group could pose the biggest threat to fixed wireless service providers and gigabit-speed Ethernet service providers, analysts said. Because of the ability to beam a laser through an office-building window, service providers will not need to purchase pricey wireless spectrum or negotiate rooftop access rights with landlords or commercial property management firms.

"To the extent that (free-space optics) can bypass building permits, I can see Teligent, Winstar and the other fixed wireless providers getting nervous about a competitor that doesn't have to have permits and rooftop rights," said Pat Brogan, assistant director of research at The Precursor Group, an independent communications research firm.

Others agree, saying the laser networking technology could be significant provided these initial uses prove to be reliable and popular with customers.

"If the technology works as advertised, it could be a home run," Kagan said. "If it can deliver high speeds and (be installed) quickly without the hassles of building permits, it's just too easy."