Elastic Buy Expands Paradyne DSL Portfolio

Paradyne has closed its acquisition of Elastic Networks, significantly expanding the company’s slate of DSL products.

"This acquisition represents a natural extension of Paradyne's DSL business and accelerates our ability to provide a cost-effective high-speed access solution for the in-building broadband market,” said Sean Belanger, president and CEO of Paradyne in a release issued by the company. “As we stated in December, this acquisition, when combined with Paradyne's current DSL strengths around the world, solidifies our position as a leading player for extending DSL into unserved areas and providing reliable solutions for high-speed access within in-building environments. The transaction also strengthens Paradyne's cash position."

Paradyne, which sells DSL and other access products, has sold more than 20,100 Hotwire DSL access multiplexers, aka DSLAMs, around the world.

Elastic Networks Inc., a spin-off of Nortel Networks Ltd. and now a subsidiary of Paradyne, offers a unique Ethernet-based technology that will offer data rates of up to 100mbps over single, unconditioned copper pairs at reaches of up to 21,000 feet and beyond. The technology, called EtherLoop, can support a variety of services, including high-speed Internet, other data services and video over the same copper pair as lifeline voice services.

The initial Elastic product offered bidirectional 6mbps rates, according to Elastic. Next-generation versions of the product operate at 10mbps and100mbps.

Unlike traditional DSL, which always puts signals down a line even if it has no packets to send, EtherLoop only sends signals when an end user requests it. The rest of the time, it acts as a spectral analyzer to sense potential interference with other services in the copper binder, Phil Griffith, Elastic's vice president of sales and marketing, told XCHANGE in an interview last year. If it senses interference, EtherLoop moves traffic to another frequency.

"DSL has lost some of its momentum due to the complexity of its deployment," Griffith told XCHANGE. "A lot of it is because you need a clean [copper] pair. This should make it easier and more affordable for CLECs to do DSL, because you don't need to pay for a conditioned pair." EtherLoop also addresses the spectral compatibility issues all types of carriers face when offering multiple services in a single copper binder group, he adds, noting that the American National Standards Institute (ANSI) T1.417 has declared EtherLoop spectrally compatible without restrictions.

Griffith added that because EtherLoop is based on Ethernet rather than ATM, the technology is simpler to provision because it doesn't require the set up of permanent virtual circuits. Plus, it enables carriers to offer Ethernet end to end. "The market has moved into the sweet spot of the technology," Griffith said, noting that the company is involved in the IEEE 802.3 effort to establish standards for Ethernet in the first mile.

"We like to view ourselves as a copper bridge to the Ethernet fiber networks," he said. For example, Hargray Communications uses Nortel's optical gigabit Ethernet gear to deliver services to most of its customers in Hilton Head, S.C., but when the services hit copper, they use Elastic's EtherLoop technology to get that extra reach.

Elastic counts Verizon Avenue and more than 70 independent phone companies among its customers, the largest of which is Citizens Communications Co. Citizens is using EtherLoop in West Virginia.

"We've been very successful in the independent telephone market because we run on dirty copper and long loops," explained Griffith, adding that the company markets its products as offering a reach of 21,000 feet, but that it has in several instances surpassed that reach. (DSL reach is typically in the 15,000-foot range).

Elastic stockholders will receive .2288 shares of Paradyne common stock in exchange for each outstanding share of Elastic common stock.

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