Under terms of the deal, Zhone and Qwest will jointly develop and test voice and Internet technologies for local networks, like those Qwest acquired when it bought US West last year and laid plans to further develop its Net assets for consumers.
Zhone, which filed to go public in October, will release its first in-house product, called Broadband Access Node, this quarter. The company makes high-speed equipment to handle voice, video and data traffic on local networks, such as those that surround major cities.
Qwest is among those trialing the new equipment. Others include PSINet and Advanced Telecom Group.
Separately, start-up Pelago Networks announced a $17 million round of financing Tuesday. The company, previously known as Beacon Networks, plans to develop network equipment for voice, video and data services, much as Zhone does. Investors include Charles River Ventures and Bessemer Venture Partners, among others.
Also receiving funding this week was start-up Tachion Networks, another equipment maker focused on broadband services for Internet service provider networks. The company secured a $50 million third round of financing; the lead investor was Lehman Brothers Venture Capital Group.