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