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Posted 24 Feb 2001   For week ended August 27, 2000
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Sent on Mormon-News: 29Aug00

Summarized by Rosemary Pollock

LDS Businessman's Firm Rides Wave of Interest in Fiber Optics

COLUMBIA, MARYLAND -- In 1997 LDS Church member, David R. Huber left Ciena Corporation, which he had co-founded, and formed Corvis Corp. taking $300 million worth of Ciena stock with him. With a personal history of war between Ciena and Corvis, Huber, famous for being tight-lipped about the technology behind the company's all-optical networks, raised more than $1.1 billion on July 28, when as an IPO Corvis made many of its 900 employees wealthy, at least on paper.

Corvis's financial coup is the latest in fiber-optic frenzy in the office parks of Dulles and suburban Maryland. Flush with cash and a fiercely competitive temperament, the optical-networking industry is having a dramatic impact on the Washington region.

It is challenging the dominance of the telecommunications and Internet industries that have remade Washington into a technology center. One estimate predicts that the worldwide optical transport market could grow from $43 billion this year to $89 billion by 2003.

"D.C. is becoming a mecca for optics companies," said Doug Green, vice president of marketing at Fairfax-based Ocular Networks Inc. It is reported that the real estate market in Washington is more affordable than in the Silicon Valley and Boston and that the region has a high quality of life and talent pool to sustain the rapid growth of the industry. Green says the only real question is, "Can you be successful in recruiting people?"

"The reason why Nortel is here is that a lot of our customers are here," said Jeff Ferry, spokesman for the Canadian firm Nortel Networks Corp. With the competition so intense, firms are wanting to locate where there is a critical mass of workers.

Gary B. Smith, Ciena's Chief Operating Officer, said, "we shipped in a lot of that talent." "This has been a very fertile ground." When tracking executives and other employees, the area looks like a wide family tree with no small amount of intermarriage. New Jersey-based Lucent Technologies has been heavily investing in the area.

Fiber optics is the science of carrying data via light signals along micro-thin strands of glass. Just a few years ago a technology called DWDM, or dense wavelength division multiplexing, revolutionized the industry by making it possible to "slit" each fiber into multiple channels.

"I think this has long-term viability, because we're talking about an infrastructure change, not just for the U.S., but around the world," said Phil Herget, a partner with Columbia Capital.

"The reason why we're so bullish is that [fiber-optic networks] are not just for carrying traffic, but are driving the universal demand for 'broadband' -- high speed internet service -- which has yet to reach most businesses and other customers," Herget said.

Yet, the investor enthusiasm and the extreme youth of the industry leads some to foresee a correction that will bring fiber-optics down to earth. Industry watcher, Mark Lutkowitz, recognizes the fiber's profit potential but says investors need to be aware of the harsh realities of the business.

"In general, the [telecommunications] industry moves very slowly," said Lutkowitz, president of Trans-Formation Inc., an independent research firm based in Birmingham.


Internet? Poo. It's Fiber Optics That's on Fire
Washington Post pgF16 21Aug00 B4
By Yuki Noguchi: Washington Post Staff Writer


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