On Monday Nortel officially announced the commercial availability of our 100G solution. However, our optical team has been working to get that 100G product to market for years, and that includes trials with service providers around the world.

Yesterday, we added a name to that list of successful trials with the announcement that Lightower had completed a successful trial of our 100G solution in their network.

Back in March 2008, I wrote one of my first posts on this Buzzboard blog called How about a little "rational exuberance". On that day, Nortel had just unveiled our new 40G Optical solution to the world, and my post suggested that maybe it was time to get excited again about Nortel's optical business. Of course, many things have changed since that time and I think we can all agree that from a Nortel corporate level there hasn't been a lot to be "exuberant" about over the last year.

But one thing that hasn't changed during that time is Nortel's grip on leading edge optical technology that allows us to do things with optical networks that no other vendor can do. That was reinforced once again this week when we loudly announced that Nortel was the world's first to have a commercially available 100G solution for the market.

After a three day long auction that started Friday morning and didn't end until late Sunday night, Ciena has been named the winning bidder for Nortel's Optical Networking and Carrier Ethernet businesses (with NSN being the second bidder). Ciena's final bid came in at US$530 million in cash plus US$239 in convertible notes.

By winning the auction, Ciena consummates many of the deal parameters that were part of it's original stalking horse bid announced back on October 7th. Specifically, the agreement provides for the transfer of substantially all customers, product platforms, and a minimum of 2,000 employees* (representing more than 85% of the employee base).

For those of you looking for an update on the sale of Nortel's Optical and Carrier Ethernet businesses, the below press release just crossed the wires. You can see the full release here.

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Nortel Provides Update on Auction for the Sale of its Optical Networking and Carrier Ethernet Business

TORONTO, ONTARIO--(Marketwire - Nov. 13, 2009) - Nortel(1) Networks Corporation (OTCBB:NRTLQ) announced that in light of ongoing discussions with interested parties, it has decided to not hold the previously scheduled auction today in relation to the sale of its global Optical Networking and Carrier Ethernet businesses. Qualified bidders are now required to submit offers by November 17, 2009. The Company expects to provide a further update on the auction process and sale of these businesses next week.

Nortel went in front of the U.S. and Canadian courts yesterday to get approval for several items related to the sale of Nortel's Optical and Carrier Ethernet businesses. It was just last week that Nortel and Ciena announced that they had entered into asset sale agreements for these businesses for US$390 million in cash and 10 million shares of Ciena stock.

In yesterday's court proceedings, Ciena's stalking horse agreement and the bidding procedures were approved. The courts also confirmed several dates and deadlines related to the bidding procedures. The deadline for the submission of qualified bids by other parties is November 9th at 4:00pm ET. Assuming multiple bidders, the auction will begin on November 13th at 9:30am ET. And the U.S. and Canadian court hearing to approve the successful bid is scheduled for November 19th at 1:00pm ET.

Last week was a big one for our MEN business, as Nortel announced asset sale agreements for the proposed sale of our Optical and Carrier Ethernet businesses to Ciena. As with the various other businesses Nortel is in the process of selling, this sale to Ciena is subject to a competitive bidding process, with Ciena now identified as the "stalking horse".

One of the most interesting parts of the optical business that Ciena bid for is, of course, Nortel's 40G/100G technology. And it turns out that quite a few others like the technology, too, according to a new report from analyst firm Infonetics.

Infonetics has a new global optical survey that they are promoting here with the headline of "Carriers rank Nortel as top 40G/100G technology leader in optical equipment vendor survey". The survey polled purchase decision-makers at carriers in EMEA, North America, and Asia Pacific about optical transmission and switching equipment vendors. According to the highlights of the survey, in an open-ended question about 40G and 100G technology leaders, most service providers named Nortel as the top vendor.

Early yesterday morning while we were all still waiting to hear news on the Nortel Enterprise front, the Optical team issued two press releases highlighting optical deployments with customers in Europe. The first was the announcement of Virgin Media as our first public 40G Submarine Networking customer. The second was a joint deployment with service provider Sunrise of what is believed to be the first national network of its kind -- providing Swiss Broadcasting Corp (SRG) with a pure optical network that enables uncompressed HD video to be transmitted between studios and from outside broadcast vans to studios in real time.

I've been talking a lot about our optical group's 40G and 100G technology recently and how unique it is compared to our competitors. When you write so much about one topic, sometimes it's hard to strike a good balance between objectivity with the news and corporate "pom-pom waving" -- especially these days when there are precious few topics to wave your pom-poms about. I think 40G/100G is one of those topics worth a little pom-pom waving, so it's nice when you can point to the opinions of those outside of Nortel for some external validation.

2,038 kilometers is a long way to go in any situation. Apply that distance across the rugged outback of Australia and it seems even longer. Now take that distance, in that environment, and try to build a bleeding edge 100G optical network and you have yourself a real challenge.

But that's what Telstra and Nortel did last month when they set a 100G world distance record by crossing 2,038km of Australia with an "unregenerated" 100G trial network. The previous record distance for a 100G link of 1,244km was set not long ago when Nortel and SURFnet successfully tested a 100G link between Amsterdam and Hamburg.

Over on fibresystems.org, Pauline Rigby has an article about the timing of the 40G optical market versus the 100G market. She quotes multiple industry analysts in the story, and gets a general consensus from them that while some vendors may have 100G solutions available by the end of this year (that would include Nortel MEN by the way) or 2010, they don't expect sales of 100G to carriers to fully ramp up until several years later.

Here's one excerpt from the article:

"First deployments (of 100G) will definitely be in 2012, as some equipment will be available by end of this year, and some carriers will deploy it just to be 'first'," said Eve Griliches, program director for IDC's telecoms research. "But my guess is that real volume deployment will be in a third generation development of 100G, which will not be in 2012, but a year or two after that."

Last month I had this post about a successful 100G optical trail that Nortel had completed with SURFnet and Telindus. The trial used Nortel equipment to send one 100G and two 40G wavelengths across an impressive 1244km span over SURFnet's DWDM network from Amsterdam to Hamburg without using electrical regeneration equipment.

Below is a video clip from the trial, courtesy of SARA, who facilitated and recorded the trial.

As my teammate Ryan Hill highlighted in a The specified blog post was not found., the blogging team for Buzzboard is evolving a bit. I've moved into the Metro Ethernet Networks (MEN) business, and will be focusing my blogging efforts from here on out on MEN topics.

And with that I'll give you the latest piece of news around Nortel's 40G solution, with the announcement yesterday that Lightower has gone live with a 40G network upgrade based on Nortel 40G. In fact, Lightower (which has over 4,000 route miles of fiber) is the first provider in the Northeast to provide their customers with a 40G bandwidth service.

One of the big debates going on in the optical industry right now is whether 40G services will take off, or if service providers around the world will just wait until 100G solutions are available.

This "skip 40G" debate is the focus of this recent video that Light Reading posted, and the idea of going straight to 100G is something that has been pushed -- not surprisingly -- by some of the industry's optical vendors that lack a viable 40G solution.

Nortel, of course, is not one of those. While we have plans to introduce a 100G solution later this year, Nortel is clearly on the side of "40G is a viable market."

While most of the attention for Nortel this week was focused on the INNUA Global Connect event for enterprise customers, Nortel's MEN business announced another significant step in the race towards 100G optical.

Earlier this week, Nortel issued this press release highlighting the successful completion of a 100G trial with SURFnet, which runs an advanced Research and Education (R&E) network in the Netherlands. Their network, by the way, already supports 10G and 40G connections using Nortel's OME 6500.

Nortel took another step in the race towards 100G last week. JANET, a research and education (R&E) network in the UK, announced with this press release last week that it was the first R&E network in the world to successfully complete a 100G network trial.

The trial, conducted in April with Nortel and Verizon, spanned a 103km link between London and Reading in the UK. Verizon Business operates JANET's UK backbone network, and supplied the fiber infrastructure for the trail. Nortel provided the 100G equipment.