Lucent has worked for several years at Bell Labs on building-to-building optical beams in point-to-point implementations called OpticAir. But TeraBeam is working on multipoint access technologies that do not require rooftop rights of way or riser-cable rights, which TeraBeam chief executive Dan Hesse said made the system unique in "cost, flexibility, and simplicity."

Free-space optic research is enjoying a renaissance, thanks to advances in both long-distance lasers and more resilient packet technology, sparking new development efforts at companies ranging from Israeli conglomerate MRV to startup AirFiber. TeraBeam claims to have a particular edge in customer access, using small, satellite-like dishes and holographic representations of signals at the customer receiver unit.

Lucent chairman and chief executive Rich McGinn said that this technology was significant enough to be "disruptive in first-mile access technology," and that the pact may be one of the most significant Lucent will make in broadband access. While Lucent remains interested in broadband wireless technologies like local multipoint distribution service (LMDS), McGinn said "the approach of free-space optics is far superior to radio systems, at least as far as they are deployed today." Hesse said that he came from an RF background himself, but believed the opportunities in optics were far greater.

The TeraBeam system is most similar to meshed cellular radio networks, Hesse said. A metropolitan area has a set of optical hubs, which beam backbone signals to customer units that need only be positioned next to windows — even windows with protective coatings. One optical "cell" can serve up to dozens of individual customers. Unlike cellular systems, there is no interference in such optical cellular systems, so up to 250 Gbits/second of capacity can be implemented in one cell sector, or up to 1 terabit per cell. Free-space wave division multiplexing could be applied to components in the next generation of receiver, Hesse said, taking capacity to several gigabits per second.

No rights

The hubs use Class 1 lasers that do not require any eye safety limits, having a beam that spreads to 1 meter in diameter at 1 km from the hub. Beams are individually shaped for each customer at the receiver site. The holographic components in the receivers can be manufactured using flat glass rather than curved lenses, further reducing the cost of optical components for customer units, Hesse said. TeraBeam claims that virtually no licensing or rights negotiations need to be sought with such a system.

The original TeraBeam company is aimed at service provision, while the new TeraBeam Internet Systems will focus on system development and manufacturing. Lucent will own 30 percent of the new company, and will invest cash, R&D assets, intellectual property, and existing products with an aggregate value of $450 million. All system components of the TeraBeam network will carry the Lucent brand, and Lucent will be TeraBeam's preferred supplier of optical components and networking subsystem equipment. While the new company may consider selling its equipment to other service providers in the future, Hesse said that in the near term, TeraBeam Networks will be the sole customer of TeraBeam Internet Systems, and will be the sole service provider offering such systems, except for offering lower-level service providers bandwidth on a wholesale basis.

While market analysts are concerned with whether such systems could be affected by fog or snow, Hesse said that Seattle deliberately was chosen as TeraBeam's headquarters and its initial deployment site, since the city's weather represents a worst-case scenario for the technology. Hesse said that capacities up to 1 Gbit/s can be supplied to an individual customer. Multiple dishes could be cascaded to provide multi-gigabit capacities.