December 21, 1999 Web posted at: 10:09 a.m. EST (1509 GMT) by Cathleen Moore

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(IDG) -- Optical-based networking, primarily the domain of large service-provider and carrier networks, is expected to trickle down to the enterprise level in the new year and beyond.

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As evidenced by moves made recently by networking giants Nortel Networks and Cisco Systems, the use of optical, fiber-based units has become increasingly important as the tremendous growth in Internet traffic has driven the need for networks optimized for data traffic.

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Nortel this week announced plans to buy Qtera, a maker of optical transmission technology, for $3.25 billion. Meanwhile, Cisco answered competitive threats in the terabit routing space with the unveiling of its 12000 Terabit System geared for fiber links in service provider networks.

Nortel's purchase of Qtera brings the company a key piece of optical technology.

Optical long-haul technology reduces the expensive process of electrical regeneration needed to send transmission signals over long distances, according to analyst Chris Nicoll, director of infrastructure analysis at Current Analysis, in Sterling, Va. In current systems, signals need regeneration after 250 to 350 miles. Qtera's long-haul technology makes it possible for optical signals to travel as far as 2,500 miles without regeneration.

"This ultralong-haul technology is the optical technology of the future because it reduces network costs and improves network scalability," Nicoll said.

Although optical networking primarily benefits service providers, there are also advantages for enterprises, according to Nicoll.

"It will have a trickle-down effect for enterprises," Nicoll said. "The optical networks bring very high capacity and scalability to transport networks in general."

Bill Harris, an MIS director at 3dfx, a graphics card manufacturer in San Jose, Calif., said optical links to the desktop are expected within five years. But optical systems will compete with high-speed copper links, he said.

"If I can use the existing infrastructure rather than put in new optical [systems], I'd rather do that," Harris said.

Another real-world benefit of optical networks are their capability of leaping bandwidth hurdles.

"Optical [networks] allow us to provide a new class of services to customers," said Vab Goel, vice president of emerging technologies at telecommunications company Qwest, in Denver. "If a customer wants extra bandwidth, they can get it in hours rather than months. All optical networks enable us to add more core capacity on demand."

One telecommunications company manager said optical technology has far-reaching implications for his business.

"We think the future is fiber. Not only is fiber the short-term solution to bandwidth problems, but we think it will be the platform of the future that will give us the capacity to handle new and bigger applications," said John Goldman, communications manger at BellSouth, in Atlanta.

Cisco's terabit router fills an important hole in the company's high-end router line, in which start-ups have gained market share. The 12016 Gigabit Switch Router (GSR), which can scale to 5 terabits per second using a crossbar switch fabric architecture, is also an important ingredient in optical networks because of its capability of keeping up with the heavy data flows. The 12016 GSR is available now, priced starting at $65,000.