Nortel To Spin Off Network Access Subsidiary



Nortel Networks announced yesterday that it will turn its high-speed network access subsidiary into a separate company.

Elastic Networks develops digital subscriber line-like systems called EtherLoop that let service providers deploy high-speed Internet access services to businesses and consumers. Like DSL technology, EtherLoop can provide multimegabit access over twisted-pair copper wiring that connects many buildings to public data and telecom networks.

Nortel currently uses EtherLoop in its Universal Edge integrated access platform. Spinning the business unit off into its own company is expected to help it sell to a broader base of internetworking equipment vendors and service providers, as well as provide outside funding from venture capitalists.

The company has already received $12.6 million in financing from Pequot Capital Management and Texas Instruments, the latter of which integrates EtherLoop into its digital signal processors.

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