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Bay to acquire NetServe

With the acquisition of the German packet-based voice specialist, Bay is looking to marry voice and cable networks.

Bay Networks intends to marry voice and cable networks, the latest in a laundry list of signs that portend a converged future.

Bay will announce the acquisition of German packet-based voice specialist NetServe tomorrow in a bid to combine voice support over cable networks.

The move follows the recent announcement of a proposed merger between voice giant AT&T and cable operator Tele-Communications Incorporated.

Terms of the deal were not disclosed. NetServe is a privately owned firm.

Bay, a data communications networking firm, is among several companies eyeing the benefits of using IP, or Internet protocol, as the transmissions medium to deliver voice, video, and data traffic. NetServe, a voice-over-IP specialist, offers Bay the opportunity to combine voice technology with its existing cable-based front- and back-end equipment, allowing cable providers to offer a variety of services over their networks.

"I don't think it's a niche market--I see this for residential users as well as telecommuters," said Gerry White, chief technology officer for Bay's broadband technology division. "I think there's some intriguing options."

The purchase, to be announced tomorrow, follows the recent announcement of Bay's merger with Northern Telecom, a Canada-based provider of telecommunications equipment. Bay executives said it was too early to tell whether there would be synergies between the two firms in the area of voice-over-cable, since the deal has not been approved by federal regulators yet.

Various networking industries--from phones to data to cable--have found increasing interest in technologies that allow various types of traffic such as voice, video, and data to be sent across a network in a singular format so that the type of traffic being transmitted is rendered inconsequential. That format is IP, a packet-based protocol currently used in many data networks and on the Internet.

NetServe has focused primarily on providing voice-over-IP capabilities to the enterprise corporate computing market. The company sells client- and server-based hardware and software that offers connections and gateways to the public phone network.

Bay said it expects the first fruits of the integration of NetServe's technology to find its way into the company's cable modems by the fourth quarter of this year. Full integration is expected in the second calendar quarter of next year, Bay executives said.