FSO stands for free space optics. They sound like something
from Star Wars, but the machines look more like a large, twentieth century hair
At the Terabeam offices, on the thirtieth floor in 825 36th
Avenue in Manhattan, the head of the hair dryer is angled upwards, pointing out
a window. It is communicating with a similar machine six stories up and a couple
of blocks away.
A large flat-screen television hangs from the ceiling
nearby, on which four DVD movies are playing at once. On a larger screen a
high-definition movie is projected. On another large screen a live feed of
downtown Seattle plays, and on a third large screen there is instantaneous video
conferencing with a Terabeam employee in Seattle.
All the information is
coming through the laser feed, through carrier hotels in the city, and then
along a long distance AT&T fiber line from Seattle. A television directly
over the Laser machine shows a read-out of 46 - that is the amount of megabytes
that are being used by sending this amount of data.
Easier and cheaper
Merrill Lynch estimates that FSOs currently
only account for 5% of last-mile connections for buildings, so although
Telecommunication Magazine named Free Standing Optics as one of the ten hottest
technologies of 2001, this is a technology which people are only starting to
That will change. With costs that are roughly half of a fixed
wireless solution - a 500 meter point-to-point FSO link costs about $18,000,
while a fixed wireless solution costs $30,000, and laying new fiber under the
street could be as much as 30 times more - FSO is a solution which will see
large growth in demand.
Even with the sharp decrease in the cost of
fiber optic cables, FSO make obvious sense. Baksheesh Ghuman, Chief Marketing
Officer at LightPointe, a San Diego-based company, says that the majority of the
cost of fiber cable is not the actual fiber. "The cost of laying fiber is not
going to go down," he says. "85% of the cost of fiber is the labor, and the
price of labor is not going down."
FSO also offers the simplest method of
installation. No streets are ripped up, no building rights or roof rights are
needed. The FSO laser in Terabeam's office sat next to the window.
Davis, Director of Media Relations for fSona Communications, a Richmond, British
Columbia based company that has been around since 1997, explains that their
lasers can be set up instantaneously. "One of the great advantages is that you
can survey a sight and do the installation in about an hour, without a license,"
he says. With these advantages, Merrill Lynch predicts that the FSO market will
grow from $100 million in 2000 to $2bn by 2005.
Line-of-sight technology has obstacles before it
technology does offer advantages in terms of price and speed of deployment, FSO
technology has some visible problems.
FSO technology uses low-powered
lasers and a telescope to transmit single or multiple wavelengths of light that
carry between 155mbs and 2.5 gigs of data. On a clear day the FSO laser can
reach 5 kilometers, but the longest distance recommend between lasers is 1.5
kilometers by FSO companies. Line-of-sight technology has drawbacks - fog being
its greatest problem, as the small moisture drops act like mirrors, which
diffract the beam.
Terabeam, a Seattle-based FSO company founded in 1997,
sees the fog problem as surmountable. In times of dense fog, shades lift from
the laser and increase intensity of the beam. At the present, Terabeam's largest
network is in Seattle.
At the Terabeam's offices in Manhattan Lou Gelles,
Terabeam's spokesperson uses a large plastic disk, the shape of a large platter,
to obstruct the laser. The movies continue as he flashes the disk through the
invisible beam. This is to show that the message will not be interrupted if a
bird flies through the beam. Only when the disk covers the entire beam does the
movie stop. When the disk is removed the movies start up again. "When data is
interrupted the message continues from where it stopped, so none of it is lost,"
Lou Gelles explains.
One other problem with the technology is "building
sway." Buildings sway in high winds, to the extent that the lasers may not
connect. Terabeam offers tracking technology and the wide beam to counter this
problem. Companies like LightPointe and fSona Communications use four separate
beams to make sure at least one beam is communicating the data.
FSOs - the clear alternative?
Heavy snowstorms also seem to
pose a problem, although Lou Gelles says that snow will not cover the entire
laser. But he adds that window washers have been known to interrupt data. For
some corporations this may be acceptable, but for a company like Merrill Lynch,
that has recently set up a 3gig ring between their New York City offices, trades
need to be instantaneous. Lasers may eventually be part of a diverse high-speed
network for such companies, but it's not likely that they'll completely replace
In cities as built up as Manhattan, line-of-sight does not
include every building. As I looked out of the window I could only see up to a
wall of offices a couple of blocks away. An intense network would have to be
built for every building to be available - and this would mean an intense
marketing team as well as roof rights on some buildings.
would have similar problems as buildings are not tall enough to be in the
line-of-sight of other small buildings - think of Paris where all the tall
buildings have been zoned to the outside of the city. This also increases the
difficulty of offering high-speed data to every building.
Raise the estimates
Still, the estimate by Merrill Lynch of a
$2 billion FSO market by 2005 appears a little low.
Companies involved in
their market include Terabeam, LightPointe, fSona Communications, as well as
Optical Access, AirFiber and Rockefeller Telecommunications Services, with
Lucent, Cisco, Corning and Nortel testing the potential of lasers through stakes
in Terabeam, LightPointe and AirFiber. These companies are looking to exploit
the fiber market in ways that can increase their revenues
The first way is by targeting smaller companies and
smaller office buildings. Due to the cost of laying fiber under streets and
through buildings, traditional fiber companies only stand to make a profit by
wiring class "A" buildings with a million square feet or more. These class "A"
buildings only account for 5% of all office buildings, by LightPointe's
estimates. 95% of office buildings are not even in the market for optic fiber
connections - but prime customers for FSOs.
The second way FSOs can
increase the market is through reselling their technology through major
carriers. On October 3rd, Utfors Bredband AB of Sweden announced that they would
be Terabeam's first reseller of its Fiberless Optics equipment. fSona uses
General Dynamics for their technology installations globally, and they are
preparing to make major announcements of deals with carriers in Europe and the
On September 13th Qwest became the first major carrier to install
FSO equipment, using LightPointe's lasers.
For the past couple of years
FSO have been quietly looking for an opening. With increasing press and carrier
attention FSO is on the brink of growth that would make it a rival to optic
fiber and allow it a larger share of the market than wireless LANs.
Kennedy is currently the senior staff writer for Unstrung.com, and has covered
the mobile industry for M-Business Magazine, The Wireless Developer Network,
Wireless Business & Technology, Wireless Related, and The Industry Standard.