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HOTS 01/2002

Issue: January 2002

By: Frank Bisbee


 

Featured Story

 


It seems like only yesterday we were sweating Y2K. Now, we are looking ahead at 2K2 for better times.

The engine that runs our economy is capital. Economics is basically the law of supply and demand. If you are trying to understand what is ahead in 2002, you should look at the basics more carefully and spend less time focusing on the dazzle of technology. Soon, Intel will have a new facility pumping out CPU chips that will run faster than 3 Gigs. However, that will not change the big picture. North American construction is expected to dip in 2002 and recover by 2003. One expert in market research said that in trying to predict the future, "Happiness equals expectations minus reality." Although you would not believe it from reading this column, the news for the communications industry going forward is not all bad .

The face of capital markets has changed dramatically during the past twelve months. The FED has lowered interest rates to the lowest level in decades. Businesses are still making substantial cutbacks in expenditures and personnel. Capital sources are constantly monitoring the marketplace and re-evaluating their policies. We are definitely not in Kansas anymore.

The communications industry is probing the representatives of active capital sources. They are watching who's putting out the money, who's being forceful in the marketplace and who's likely to be aggressive in late 2002 and beyond. The information industry is competing for capital in a market that is still licking its wounds from the dot.com fizzle and the overall recession.

Understanding the relatively conservative nature of the capital market, we must base our strategies and tactics around solid solutions. No matter how loud the spin-doctors hype their offerings of unproven technology systems, the investors and the end users won't buy it. We cannot afford to gamble on technologies that may fail to deliver solid dependable service. The concept of throwaway networks is not affordable.

Having said that, as an industry, the communications cabling and network business will have to do everything twice as good as they have in the past to be thought half as well of. While price is always important, the concept of the lowest price will not guarantee a major bite out of the opportunity apple. We will see a stronger focus on quality, sustainable values and performance.

The marketplace is already looking carefully at solutions that include some level of a barrier to obsolescence. The idea of having to rewire every time you change a light bulb, is not acceptable. It is not acceptable in the world of electrical distribution and it is rapidly becoming very distasteful in the world of communications network distribution. If you think that everyone is going to get a new "go faster" network just because it's available, then you are in for a lifetime of disappointments. The answer is somewhere in between.

The victorious sales programs in 2002 will be the type of solutions that bring the buyer and the seller together in a "win-win scenario". This informal partnership is an absolute must to guarantee the transfer and implementation of successful network solutions. The old adversarial and untrusting relationship between buyer and seller just cannot survive in today's communications environment, where the underside is so technologically complex and rapidly changing, that it tests the mettle of all involved parties. Dear Mr. Buyer: This mean YOU TOO! If you don't communicate your needs more effectively and accurately, you are going to get what you spec, not what you expect.

Education is important for the buyer. However, there is another area, which is becoming increasingly as important as the technological training. Mr. Buyer, you have to do a much better job of looking at the full picture of your vendor and their delivery system. Picking the right company to buy from is a key component in the successful product selection process. If you don't get this part right, you will pay a helluva lot more than you expected in the future. You better know your manufacturer well. One expert we met at BICSI said, when it comes to quality, you can pay me now, or pay me later. And,it's always more expensive later.



Hidden Costs and Time Bombs

The January 2002 issue of Readers Digest www.rd.com, contains an article from Consumer Reports titled "Fire in the Wall - is your home one of 50 million with worn out electrical wiring?" This article is a clear warning to homeowners to review the condition of their wiring. Wire (electrical or communications) may deteriorate over time. This is not the kind of news that we want to promote. We would rather see the deterioration problem reduced to the lowest level reasonably achievable.

The demands for sustainable quality by the consumer cannot be overlooked. We saw the American auto industry suffer horrendous setbacks when they ignored quality, while the Japanese carmakers focused on a better product that lasted longer. We sometimes assume that the cable that we are buying and installing today will continue to deliver the same performance and safety over time. The horrid truth is that many cabling materials may be somewhat unstable and tend to change or degrade with time and or temperature changes. When you sold and installed the CAT 5e cabling network, were you aware that it could degrade below the minimum acceptable level of performance for the standard or code?

What about fire safety? Do some cables lose some of their fire safety properties over time? Yes, it's possible. How does the AHJ (Authority Having Jurisdiction) or your local fire marshal feel about maintaining a minimum level of code compliance for fire safety in the building? Or better yet, ask yourself what a lawyer might claim is the responsibility for this critical area. If it turns out that the plenum rated cable in your building, although labeled as CMP rated, has degraded below the fire safety standard, and couldn't pass the "burn test" minimum performance, DO YOU HAVE TO REWIRE?

Even the fire extinguisher is periodically inspected and tagged to ensure its performance in the event of a fire. Why would you install plenum cable that would fail to meet the minimum standards at sometime in the future and then leave it in use? Heck, why don't we just turn off the water to the sprinkler system and save a few bucks there.

SAFETY IS TOO IMPORTANT TO IGNORE

Read the important study on cable deterioration which has been written and posted by Ausimont USA on their website www.ausimont.com, or on wireville in the News section: A History of Plenum Cable Fire Safety Issues www.wireville.com



CDT Announces Executive Management Changes
The CDT "Iron-Man" team just keeps getting stronger

Cable Design Technologies (NYSE: CDT), announced following its Annual Meeting of Shareholders, which was held December 12, 2001 in Pittsburgh, PA., that Fred C. Kuznik will become CDT's Chief Executive Officer. George Graeber, the company's current Chief Operating Officer, is being promoted to President and COO. Bryan Cressey will remain Chairman of the Board. Paul Olson, the company's current CEO, will become Vice Chairman and will remain a Director of the Company.

We spoke with numerous communications industry experts about this set of changes at CDT. The reactions were unanimous that this reapportionment of responsibilities was a very positive move for CDT. The past and future growth of this dynamic company dictated an expanded management team to meet their escalating business. Growth can be a curse if a company is not prepared for the rising demands. CDT seems prepared to aggressively capture and hold a larger share of the cabling market. They have all of the correct ingredients for success - quality, value, and technical superiority. Plus, they are hungry.

Fred Kuznik has been a Director of the company since 1999. He is a former Executive Vice President of Motorola, Inc., and President of Motorola operations in Europe, the Middle East and Africa. Mr. Kuznik also served as President of Motorola's Personal Communications Sector, overseeing the design, manufacture and distribution of a full range of consumer wireless products for more than 130 markets worldwide. Prior to joining Motorola, Mr. Kuznik served as a Managing Director of Philips Telecommunications and was a member of the Board of Management of AT&T Philips Telecommunications. Mr. Kuznik also held management positions with A.D.Little and AT&T Switching Systems in addition to serving as a consultant on a number of projects in Europe, Thailand, South Korea, the Middle East and Brazil. Mr. Kuznik is also currently a member on various advisory boards for high technology companies.

George Graeber has been a director and COO of CDT since 1998. He has served in various other positions with the Company, including Executive Vice President of the Company and President of CDT's Montrose division. Prior to joining CDT, Graeber was a Vice President and General Manager of Anixter International, a distributor of communication and specialty cable products. Mr. Graeber also was the President of the Industrial Electronic division of Brintec Corp. and a Vice President of Brand Rex Cable. Mr. Graeber has over 32 years industry experience.

Paul Olson, who turned 68 this year, has built CDT from a private company with $22 million in sales in 1985 when the Company was approximately 200th in the world in wire and cable to a New York Stock Exchange traded company with $763 million in sales in the most recent fiscal year and 14th in the world. During Mr. Olson's tenure CDT became one of the fastest growing and most profitable specialty electronic wire and cables companies worldwide and a global leader in connectivity products.

Mr. Olson noted, "I am very comfortable as a director and one of the largest individual stockholders of CDT that CDT will continue to grow and prosper under the new leadership. CDT has a very strong and deep management team, which will only be enhanced by the addition of Fred Kuznik. Fred's worldwide management experience and knowledge of the various wireless, networking and OEM markets will be a big positive for CDT as it moves forward. Fred is taking the reins of an organization that has some of the best facilities and machinery in the world, great research and development capabilities and hard-working employees that are eager to make CDT a world leader in marketplaces relating to the convergence of voice, video and data."

Bryan Cressey, who has served as Chairman of the Company since 1988 and was an original investor in 1985, will remain in such role. Cressey stated, "Paul Olson has built one of the finest companies I have ever been associated with. We are fortunate that he will remain on the Board and take the position of Vice Chairman where he will work for the Company on various special projects. Paul and I have been working for a year on a succession plan for the retirement of Paul as President and CEO and we are excited that Fred Kuznik's services became available and that he agreed to take on the role of CEO. We have every confidence that Fred's experience, depth of knowledge of the communications and wireless marketplace, global industry contacts and strong interpersonal skills will place CDT in an excellent position to capitalize on the future growth of interconnectivity. Fred will be aided significantly by the experience and management skills of George Graeber and the rest of CDT's management team." Fred Kuznik commented, "Since being asked to join the Board of CDT, I have seen the hard work and determination of CDT that makes it an enormously successful corporation and that has created significant growth while maintaining high profits. I am very excited about the tremendous worldwide business prospects available to CDT in connectivity and specialty electronics. I believe that I will be able to utilize my global contacts and experience in the connectivity industry for the benefit of CDT shareholders and I am very eager to help CDT capitalize on the approaching convergence of voice, video and data."

Cable Design Technologies is a leading designer and manufacturer of high bandwidth network connectivity products, fiber optic cable and connectors, assemblies, components, computer interconnect cables for communication switching applications, and communication cable products used in wireless, central office and local loop applications. CDT also manufactures electronic data and signal transmission products that are used in automation and process control and specialty applications. www.cdt.com



AT&T MAY BE AT DEATH"S DOOR

From: Associated Press Printed in The Florida Times Union, Friday, December 21, 2001

The proposed sale of AT&T Broadband to Comcast Corp. would reduce the world's original telephone company to a long-distance phone business with slipping revenue.

AT&T Corp., the 20th century's dominant telephone monopoly, may soon disappear, possibly in a merger with one of its four upstart Baby Bell children, analysis say. "At the end of the day, AT&T is going to get taken over. Its just a matter of when," said Pat Commack, a telecom analyst with Miami investment bank Guzman & Co. Since AT&T was unable to use the broadband unit to further its attempts to re-enter the local telephone market, analysts say the biggest effect of the $45 billion deal is to clear the way for the sale of the rest of the company. "It'll get gobbled up," said Giga telecom analyst Lisa Pierce. AT&T still counts on a few aces in its hand. The company still owns the world's largest telephone network, in terms of revenue and number of customers. AT&T's Business Services unit counts a large number of Fortune 500 companies as its subscribers. "The Business Services unit is the crown jewel. That's what the [Baby Bells] want," said Drake Johnstone, telecom analyst with Richmond, VA. -based brokerage Davenport & Co. Also, the sale of Broadband unloads a large portion of AT&T's corporate debt, leaving the phone company owing a manageable $18 billion, Johnstone said.

The company's ailing residential long-distance business is a stickier matter. Analysts say it could be cut loose and sold to a competitor. If that happens, Johnstone said, AT&T Business Services will keep the AT&T name and its venerable "T" ticker symbol. Others think the phone business will be sold in one piece. Either way, AT&T would be wise to seek a suitor as soon as possible, Comack said. The Company has predicted its 2003 revenue will plunge - by more than 20 percent in the case of residential, beset by competition from other carriers as well as wireless phones and even e-mail usage. As revenue drops, so does the company's overall value and the price a suitor would pay, Comack noted. "If they're able to sell over the next six or eight months, they should," Johnstone said. "It would be a real mistake to wait."

The company's origins date to Alexander Graham Bell's, 1876 invention of the telephone. From its original patents on the phone, the American Telephone and Telegraph Co. grew into a nationwide monopoly by 1913. The omnipresent AT&T handled most local and long-distance calls in the United States until its breakup in 1984, when a federal court separated the company's local phone business from its long-distance side, which kept the AT&T name. Four Baby Bells remain: SBC Communications, BellSouth Corp., Verizon Communications and Qwest Communications. www.att.com



AVAYA chosen for its data-intensive operations

The FSA Group of Markham, Ontario, a leading Canadian direct marketing company, has chosen a new network from Avaya for its data-intensive operations.

FSA, which manages large volumes of data transfer, needed a full communications platform to support its existing business and provide the flexibility to expand networking capabilities as the company grows. To meet these requirements, the company selected data networking, call centre, wireless and connectivity systems from Avaya to improve speed and quality of service for its customers.

CCS Inc., a leading communication solution provider, installed the network, which included Avaya's Cajun Network switches, DEFINITY ProLogix server, Category 6 SYSTIMAX Structured Connectivity Solution (SCS) GigaSPEED, and DEFINITY Business Communication System. www.avaya.com

"FSA is experiencing tremendous growth, and as a result, it was imperative that we install a network infrastructure that could support not only our needs, but more importantly our customers' needs, over the long-term," said Rob Van Velzen, owner and president, FSA Group. He says the company is now fully capable of supporting applications such as voice, video and data technology as its needs and functionality expand. www.fsa-int.com



BellSouth to cut 1,200 more positions

"Baby Bell" company, BellSouth (Atlanta, GA) said that it would cut 1,200 more jobs, or less than 2 percent of its work force, in the first quarter of 2002 because of the economic slowdown and the resulting drop-off in demand.

BellSouth management said that they had alerted the Communications Workers of America (CWA) union that the jobs, all non-management positions, would be cut in its network operations throughout its nine-state region. BellSouth said it would offer a voluntary separation package to affected employees.

Our business is not immune to the larger economic forces in the market," Rod Odom, executive vice president for BellSouth Network Services, said in a statement. "The reductions we are announcing are tied to an economy that has slowed significantly over the course of the past year and to a resulting drop-off in the volume of demand work we have been experiencing."

It's interesting to note that the Bell System operating telephone companies, which are now owned by BellSouth, were considered some of the most stable employers in the twentieth century. These companies did not even reduce their workforce during the Great Depression. During those years, employee loyalty and dedication helped the Bell companies to become the best service provider in the history of communications. Things change and service seems to be a lower priority. Perhaps BellSouth should take a closer look at their corpulent management ranks.

In October, BellSouth said it would cut 3,000 jobs, most of them in management and in the Atlanta area. To date, it has identified about 2,000 of the positions to be eliminated. The company said it hopes to achieve most of the cuts through voluntary action, but will handle any remaining cuts according to its contracts with the union. www.bellsouth.com



Draka still feels it will reach 20 % growth in net profit for 2001

Draka Holding (Amsterdam) said in a press release that despite worsening market conditions for telecommunication cable, it expects to reach its earlier forecast of at least 20 % growth in net profit for 2001. The company said that contrary to the developments in the telecom cable market in China, demand for optical fiber and optical fiber cable for the European telecommunications market saw a further slowdown in the fourth quarter, following the slowdown in North-America. However, in a number of the company's other markets, including the oil, gas and transportation sectors, demand remains strong.

Draka is a major player in the communications infrastructure world and we expect their presence in the USA to be substantially strengthened over the next two years. Draka companies are already playing a significant role in the re-wiring of New York City. Many of the companies in the financial district have successfully utilized Draka products for their cabling needs in the past. The purchasing agents that we spoke with said they intended to stick with the Draka quality cabling solutions. www.drakaholding.com
www.drakausa.com



NEC Lays Off 1,200-Plus, Closes U.K. Chip Plant

NEC Europe (Nippon Electric Corp.), has announced plans to suspend chip production at its Livingston, Scotland facility and lay off most of the 1,260 staffers by next April. The Japanese electronics group says that the closure is due to the economic downturn, as well as a sharp decline in the semiconductor industry.



CDT Announces First Quarter FY2002 Results; Closes Czech Acquisition; Continues to Pay Down Debt

Cable Design Technologies (Pittsburgh, PA), a leading worldwide provider of high-speed network connectivity products, today stated that net income for its first fiscal quarter ended October 31, 2001 was $3.6 million, or $0.08 per diluted share, before nonrecurring charges of $0.02 associated with workforce reductions and the closing of a wireless assembly facility. Reported net income for the first fiscal quarter, including the nonrecurring charge, was $2.8 million, or $0.06 per share. Sales for the first fiscal quarter 2002 were $142.0 million.

Network Communication segment sales for the first fiscal quarter 2002 were $87.9 million versus $144.9 million for the same period last year. Gigabit network cable represented 80% of Category 5 and above network cable sales. Pricing of Category 5e network cable in the United States in the first quarter was down approximately 9% when compared to the same period last year and has remained relatively stable when compared to the previous quarter. Specialty Electronic segment sales for the first quarter were $54.1 million versus $69.8 million in the same quarter a year ago. Sales outside of North America were $35.5 million during the first fiscal quarter 2002 compared to $46.2 million last year. The decrease in sales outside North America was primarily a result of lower sales of telecommunication related products in Europe.

The gross margin for the first quarter of fiscal 2002 was 26.6% versus 26.4% for the fourth quarter of fiscal 2001. Gross margins when compared to historical norms, however, continue to be affected by greater absorption of manufacturing expenses due to lower production volumes, particularly for telecom equipment related products, as well as competitive pricing for certain products. Selling, general and administrative expenses, excluding the additional SG&A of acquired businesses, decreased by $5.3 million versus the fourth quarter. Nonrecurring charges of $1.3 million represented severance costs associated with workforce reductions and costs to close a wireless assembly facility due to the previously reported loss of the major customer for such service. Depreciation and amortization expense for the first fiscal quarter 2002 was approximately $6.2 million.

Ken Hale, CDT chief financial officer commented, ''During the quarter we were able to reduce debt by $8 million after expending approximately $10 million for an acquisition during the quarter. Our net debt to total capitalization ratio, a key internal statistic, improved to 24% versus 28% a year ago. Capital expenditures for the first quarter amounted to approximately $6.1 million and we anticipate capital expenditures of approximately $12 million for the remainder of fiscal year 2002, significantly lower than previously expected. During the quarter we have worked to refinance our existing credit facility and expect to close on a new $200 million revolving credit facility in the next 2 weeks.''

Paul Olson, President/CEO of CDT said, ''Despite all of the difficult economic and world events negatively affecting business, our quarter was in line with expectations and we continue to generate positive cash flows. Certain manufacturing facilities are emphasizing products that are expected to play an integral role in electronic surveillance and security. We also see tremendous opportunities for our products in the transportation, robotics, automation and process control, and automotive electronics marketplaces. While short-term events are uncertain, the long-term future concerning products that CDT manufactures is clear. We are focused on areas of connectivity where we believe sales will be vigorous when spending returns to more normalized levels.''

He continued, ''We are starting to see some orders being placed from global telecommunication companies for communication systems used in the central office and wireless infrastructure. These two areas were the most severely affected and we saw almost no new orders over the last few months. We think that the interest in these products, however, signals the inventory oversupply situation is nearly corrected and believe that the restructuring that we endured has positioned us well when these markets turn.''

''In my 41 years of experience, with dramatic change comes dramatic opportunities. It is our job to search for those opportunities and take advantage of change. Make no mistake about our outlook on connectivity -- the convergence of voice, video and data will occur, and CDT will be there to capitalize on this convergence.''

The Company announced that it recently closed, subsequent to the first quarter, the acquisition of 79% of Kabelovna Decin, a.s., a manufacturer of communication, fiber optic, signal and control cables and harnesses based near Prague, in the Czech Republic. Olson said, ''Kabelovna Decin, with its low- cost manufacturing base, state-of-the-art equipment and broad offering of products that are complementary to CDT's product lines, is expected to enable us to significantly grow our sales throughout Europe, including the expanding central and eastern Europe markets, as well as in Asia. Kabelovna Decin's strengths include outstanding management, technical and manufacturing employees, a very strong balance sheet and current operations that are extremely profitable. The acquisition is expected to be accretive. Under Czech law, CDT will make a tender offer for the remaining shares of Kabelovna Decin. With the attractive pricing available for acquisitions, it is an excellent time to buy and we will continue to be proactive on the acquisition front by seeking niche products and geographic markets that complement our existing businesses.''

Forecasting continues to remain difficult given the unprecedented times we are still in. Historically, our second fiscal quarter is a seasonally slow quarter. When combining the seasonality with the difficulties in forecasting, we think that a judicious outlook is warranted. Accordingly, CDT estimates that its second fiscal quarter 2002 operational results will be in a range similar to the first quarter. However, we believe in the next 6 to 9 months we will see earnings accelerate due to the aggressive, proactive steps that have been taken to make CDT a stronger company and an expected upturn in our end-markets.'' www.cdtc.com

Normally, the "Heard On The Street" column does not report on financial results in depth. That's not the kind of column we want. However, we feel that CDT (Cable Design Technologies) is going to continue to have remarkable growth and a bright future. We won't presume to tell you where to invest, but we suggest you might want a piece of the pie before everybody else devours it.



Cable maker Sumitomo Electric Industries Ltd plunges

Shares of Sumitomo Electric Industries Ltd dropped to a nine-year low after the electric wire and cable maker on Tuesday cut its group net profit forecast by 19 percent to 17 billion yen ($133.3 million) for the current business year that ends next March.



General Cable N.Z. acquires Australian cable distributor Brand Rex Australia

General Cable New Zealand announced Tuesday that the company had signed a definitive agreement to acquire the shares of Brand Rex Australia, a major distributor of data and telecommunications cables in Australia. The purchase, which is expected to close on December 28, provides GCNZ with a major presence in the Australian market through its distribution facilities in Sydney, Brisbane, Melbourne and Perth. The purchase, from UK-based Novar Plc, increases GCNZ's total sales by AUD$30million. Terms of the transaction were not provided. The deal means GCNZ has increased exports from 15 per cent of total turnover three years ago, to more than 50 per cent. Total revenues for GCNZ have been increased by the Brand Rex acquisition to in excess of NZ$150million. The deal also means an immediate increase in production at the Riccarton manufacturing plants, to fill Brand Rex orders for products previously sourced from the Philippines. Further expansion of the company's state-of-the-art plant for Local Area Networking ("LAN") data communications cables will be required to accommodate the increased volumes for the Australian market.



Attendance at IWCS/FOCUS far better than organizers expected
Holding the symposium in the vacation capital of the world didn't hurt

IWCA released a summary of attendance figures at the recently held 50th anniversary IWCS (International Wire and Cable Symposium) held in November in Orlando, FL. Ace Godwin, CEO, commented that "he was highly concerned about attendance at this time in view of recent events." As it turned out, attendance was excellent and in excess of 1400 registered. This was the highest number in more than a decade. "No doubt we would have had a higher registration under normal circumstances but the attendance was really excellent. I was also very pleased by the turnout of former FOCUS attendees who joined us in our first combined symposium." The weather cooperated and numerous attendees were able to enjoy the nearby world-class theme parks. Let's face it, Disney World, Epcot, Universal Studios, and SeaWorld ain't chopped liver. The symposium included educational short courses, parallel sessions covering copper, fiber optics and materials, a wireless seminar, a poster session and a management and marketing session all well attended. In addition, there were over 180 exhibitors displaying their products'' Godwin said. www.iwcs.org



Struggling Motorola Cuts 9,400 More

After a one and a half year losing streak, Motorola Inc. is getting significantly smaller (again!), [in pursuit of the profitability which management "prophesized" that Motorola will achieve again in 2002]. Remember, if you can't forecast accurately, forecast often.

The struggling technology giant, hamstrung since 2000 by a weakened economy and operating problems of its own making, is trimming another 9,400 jobs in the latest of a series of sweeping cuts. Anybody want to venture a guess if the bite included a representative share of upper management? There are few analysts who attribute the poor performance to the blue collar staff.

The cell phone and semiconductor manufacturer said the most recent move will improve its efficiency and, combined with semiconductor plant closings and other measures, result in about $1 billion in annual cost savings. But company executives also indicated they expect two more money-losing quarters after this one, making it six straight in the red, before an anticipated return to profitability in next year's third quarter.

The new shakeup further extends the third restructuring since 1998 for the Schaumburg, Ill.-based company, whose comeback efforts have been offset by troubles in the world economy. www.motorola.com



NECA and BICSI release a new publication on Standards

The National Electrical Contractors Association (NECA) (Bethesda, MD) has teamed up with BICSI to publish a standard, approved by the American National Standards Institute (ANSI), for installing telecommunications infrastructure systems.

The new ANSI/NECA/BICSI 568-2001, Installing Commercial Building Telecommunications Cabling, addresses the importance of proper installation of telecommunications premises systems, including cabling and the associated pathways and spaces.

The public consensus process that we go through means that NECA/BICSI 568 is a true industry standard," says John M. Grau, CEO of NECA. "We expect it to find broad acceptance among specifiers and end-users of voice-data-video networking systems."

Developed by members of the BICSI/NECA joint committee, the standard is based on BICSI's Telecommunications Cabling Installation Manual, an 800-page guide of specific tasks for cabling installers.

The ANSI/NECA/BICSI 568 standard covers five major components: support systems, pulling cable, firestopping, cable terminations and installation verification. Tables and figures include conduit bend radius, separation distances, suspended cable tray, fire seal of drywall and wiring schemes.

This document not only covers the installation and safety requirements for telecommunications cabling, it focuses on criteria that aid in delivering performance levels expected by end-users," says Jay Warmke, outgoing Executive Director of BICSI. "It will be an extremely valuable tool for the construction industry, including architects and engineers, and especially the installers of the telecommunications cabling."

Some industry observers have already noted that this bridge between BICSI and NECA is unexpected in view of the IBEW and CWA moves to slide communications cabling installation (voice & data) under the umbrella of work designated for the ELECTRICAL CONTRACTOR ONLY. If communications cabling was redefined as a sub-set of the "regulated" and licensed electrical division, then most of the former telephone industry cable installers would be out of business. www.bicsi.org

ANSI/NECA/BICSI 568 is available for $25 by contacting NECA at (301) 215-4504 or at www.necanet.org



Cabling Systems Magazine (a Canadian publication) is pleased to welcome
Brad Masterson to its Editorial Advisory Board

Mr. Masterson is Product Manager at Fluke Networks in Canada, Mississauga, ON (a division of Fluke Electronics Canada LP). In this position, he oversees new product introductions for the Networks Division.

With more than 20 years of experience, Mr. Masterson has particular expertise in electronic test and measurement in the high-tech and industrial markets. He is a Certified Electronic Engineering Technologist registered with OACETT and a member of BICSI.

Cabling Systems Magazine looks forward to having Brad Masterson as a valuable resource and decision-maker on the future editorial direction of this outstanding publication. www.cablingsystems.com



Industry Leaders Tell Us What They Think of the 'State of the Market'

Avaya's Donald Peterson: Turning Problems Into Opportunities

The telecommunications market was brutal in 2001. But while parent company Lucent Technologies suffered through the year serving its traditional telecom customers, spin-off Avaya positioned itself as the bridge between networking and telecom, banking its future on technologies like the 802.11 wireless standard and VoIP.

"We think we can help folks with the transition to those technologies," says Donald Peterson, Avaya's CEO. "We have all the technology in-house,we understand the applications and how they work, and we bring increasingly valuable security and VPN technology. We really do understand the problem."

The problem, as Peterson defines it, is in getting from a traditional, circuit-based telecom system to an IP-based integrated voice and data network. And resellers are seizing the opportunity to solve it. According to VARBusiness' SOM research, 39 percent of the solution providers queried say they are integrating solutions with voice and data software now. And that's a percentage Peterson expects will soon climb.

Peterson says there aren't many people using the technology yet. A lot of partners and end users are experimenting, but he says it's still early in the life cycle. To help expedite acceptance, Peterson says vendors need to do more hardware and software integration for their customers, providing a complete solution.

At first glance, partners may see this as a detriment to their margins. In reality, Peterson says, it helps nearly everyone, except someone who's trying to sell some software integration man-hours; partners equipped with a complete solution don't have to worry about testing and can get installations finished faster.

In the voice-data convergence space, hardware has certain advantages, Peterson says. "You can get a lot of stuff implemented quickly in software," he acknowledges. "The problem is, when you try to scale, it won't work as fast or as reliably as when you implement it in hardware, and ultimately in silicon." Sometimes, Peterson says, the early entries into a product area have a software-based product, and they lose their market position because they can't move quickly enough to get their solution into hardware when the time comes.

When it comes to avoiding this problem, Avaya will benefit from its telecom background. "We have security and VPN products. We have gigabit and higher-level switching. We sell a remote-access solution from Lucent called AccessPoint. We have broadband Internet access products. We do a lot of network management and management across circuit and packet implementations," Peterson says.

Ultimately, Avaya's goal is to prepare the enterprise for a thoroughly integrated world, especially as wireless technology takes off. The majority of VARs polled for the SOM,57 percent,say they expect to deploy more wireless solutions in the next 12 months.

As such solutions mature, Peterson says Avaya wants to be there with solutions that solve the whole problem for its enterprise customers, either directly or through its distributors and VAR partners. "We want to have perspective across that set of problems," Peterson says, "and deliver our products against that opportunity." www.varbuisness.com www.avaya.com



HOT News from the pages of PennWell Publishing
Task force approves 10-GigE standard draft

The 10 Gigabit Ethernet Alliance has announced that the PIEEE 802.3ae Task Force has given approval for the current draft of the standard to go to sponsor ballot.

This marks one of the final milestones in the multi-year effort toward ratification of a 10 Gigabit Ethernet standard. It is a direct result of the resolution of all outstanding technical issues and may keep the 10 Gigabit standard effort on track for ratification in the first half of 2002.

"Essentially, all the technical work related to the formation of the standard is complete," says Brad Booth, editor-in-chief of the IEEE P802.3ae Task Force. "I want to thank the members of the Working Group and the task force for their tremendous effort the past six months. As a result of their hard work, I am proud to say we remain on schedule for completion of the standard in the first half of next year."

"Customers are very excited about 10 Gigabit Ethernet technology and products," says Bruce Tolley, vice president of the alliance. "Many Ethernet companies have shipped or are about to ship 10 Gigabit Ethernet modules for switches, routers, and other devices for enterprise and service provider customers. These customers are deploying 10 Gigabit solutions in local and metro networks."

Following the recent IEEE P802.3ae Task Force meeting in Austin, Texas, the working group recirculation ballot of IEEE Draft P802.3ae/D3.4 did not generate further technical comments and was overwhelmingly approved. This permitted the task force to submit IEEE Draft P802.3ae/D4.0 for Sponsor Ballot.

Also during the recent meeting, the task force agreed that all technical feasibility requirements had been satisfied. Positioned as a high-speed, unifying technology for networking applications in LANs, MANs and WANs, 10 Gigabit Ethernet has the potential to provide simple high bandwidth at relatively low cost.

The 10 Gigabit Ethernet Alliance was organized to facilitate and accelerate the introduction of 10 Gigabit Ethernet into the networking market. www.cable-install.com



Hitachi Cable Planning to Cut FY '02 Earnings Estimates

Japan's Hitachi Cable Ltd. is planning to cut its parent-only earnings estimates for the next business year starting in April 2002, company President Seiji Hara said Monday.

At a press conference in Tokyo, Hara said that his company needs to lower its earnings estimates slightly as a full-fledged recovery for information technology businesses looks farther away. Hitachi Cable will release its revised estimates next February or March, Hara said.

For the next business year, Hitachi Cable forecast a parent-only pretax profit of 10 billion yen on sales of 310 billion yen, both close to levels in the last business year ended in March 2001.

Hara also said the company plans to step up reforms to boost its earnings capability. Specifically, it plans to enhance tie-ups with partner firms and reduce materials procurement costs by 20 pct over the coming three years via increased use of the Internet and other measures, Hara said.



BICSI news….Executive Director
Jay Warmke leaving - Al Feaster takes over

Jay Warmke, executive director of BICSI www.bicsi.org

for the past 10 years, has resigned his position within the organization. I asked the board not to renew my contract, he said in an interview with Cabling Installation & Maintenance magazine. But Warmke has no plans to leave the organization. Rather, his intention is to take a different, yet-to-be-created position within BICSI, in which he can concentrate his efforts solely on the organization's efforts in Europe.

On December 19, 2001, BICSI's board of directors appointed Al Feaster as new executive director. The appointment takes effect February 1, 2002. Most recently, Feaster has served as BICSI's Region 3 director. He will resign that position at BICSI's next scheduled board meeting.

The new administration within BICSI will have to approve the new position, and hire Warmke into it, before he begins his European-specific duties. Warmke said he does not anticipate any problems gaining such approval.

Warmke said he expects to spend a couple months at BICSI's Tampa, FL headquarters early next year, seeing Feaster through a transition period before establishing a residence near Paris, France to begin his new job. Europe is the biggest challenge BICSI has been facing, Warmke said. It needs a champion. He added that a recent six-week visit confirmed for him that the region cannot be treated as a single entity. It is a mosaic, he said.

A majority of the membership in BICSI's Region 6 are from the United Kingdom, and Warmke believes that language represents a substantial challenge in the organization's European efforts. He says that plans for European success include translating manuals into Portuguese, Italian, French, Spanish, and German. Additionally, BICSI will add country-specific addenda to manuals, focusing on local codes and practices.

Also on Warmke's agenda are half-day seminars in European countries, presented in each country's native language. Organization of the seminars and the country-specific addenda to manuals will rest upon the volunteer efforts of BICSI members just like they do in the United States and other regions.

On his tenure as executive director, Warmke quipped, I believe in term limits, even if it's my own term. He has spent the last 10 years as BICSI's executive director, and spent the previous five years as its assistant executive director. When I joined BICSI, there were only two employees in a cramped office, he recalled. Fifteen years later, we have a world-class training facility and administrative office in Tampa, FL, and offices in Australia, Brazil, Europe, and Japan. I am proud of our growth and the professional recognition that BICSI has brought to its members and to the infrastructure industry.

Jay has served BICSI and the industry well with his clear vision of harmonizing standards and practices," said BICSI board president Richard Powell. "Al Feaster has that same strong vision and is uniquely qualified to lead BICSI in the years ahead."

Feaster said, "I've always enjoyed challenges and new development. After years of involvement with BICSI, I look forward to expanding our educational programs to the telecommunications industry worldwide, and to segments of the construction industry as well." www.cable-install.com



Graybar to distribute Sound Advantage products

Graybar www.graybar.com has signed a distribution agreement with Sound Advantage, to market the manufacturer's SANDi speech-enabled unified-communication products. The agreement gives Graybar entree into the speech-recognition and unified-communication segments of the telephony market.

Graybar says its marketing campaign for the product family will focus on facilitating bundling arrangements with other small business-telephone systems and other products already in the Graybar catalog. The distributor will also stock systems in some zone inventory.



Hitachi Cable Manchester premiers CableMania publication

Hitachi Cable Manchester recently announced the availability of the first issue of CableMania magazine. The publication is available to telecommunications professionals, and was developed for individuals who install, purchase, or specify cable. The company says the publication regularly will feature case studies, industry facts, and product announcements. The premier issue includes an engineering focus on the design and construction of high-speed hybrid cables. Those interested can get a free issue by signing up at the company's Web site, or by calling (800)772-0116. www.hcm.hitachi.com. We captured this news from PennWell publishing. However, we were unable to locate the confirming information on the Hitachi website.



NEW Website Offers Easier Path To Electrician License Renewal

Many states now require electricians to take some continuing education in order to renew their licensees. At one time, the process of renewal was as easy as filling in a form and sending in a check. Today, 25 states (editor: see list below) have continuing education requirements in place. Some states require "business" courses, others safety courses.

Now, a new Web site - www.electricrenewal.com - offers the easiest method for licensed electricians to achieve the state requirements. Eleven correspondence courses offered via the site will help the electrician who needs an immediate solution (in contrast with attendance at a seminar or attending a community college class).

Course modules at www.ElectricRenewal.com range from a two-hour safety courses to a 16-hour course on the National Electrical Code. The site also contains a Code refresher course (8 hours), a fiber optic course (4 hours), and much more. Also included at the site are requirements for each of the states that have them. If you're unsure whether your state requires renewal - and, if it does, what the specifics are - this site is the place to see.

Sponsored by Iowa State University, the site's resident expert is Paul Rosenberg, a contributing editor to EC& M and CEE News magazines. Rosenberg is the author of more than 20 books on the electrical wiring and voice-data cabling fields. He's the former President of the Fiber Optic Association, and has been a significant content contributor to Electrical Contractor magazine.

States with Renewal requirements as of late 2001: AK DE FL GA HI ID ME MA MI MN MT NC NE NH NJ ND OH OK OR RI SD VT WA WI WY



Ortronics Introduces Clarity Category 6 110 Block Kits

Ortronics (New London, CT) announced the introduction of Clarity Category 6 110 Block Kits. This new generation of high performance 110 Block Kits is part of Clarity 6, an evolutionary advancement in Category 6 connectivity that is the first completely standards compliant connectivity system in the market today. The Category 6 component compliance of the Clarity 6 110 Blocks has been independently 3rd party tested and verified by ETL.

Ortronics Clarity 6 blocks exceed TIA Category 6 (draft 10) component compliance within the footprint of standard 100 pair and 300 pair blocks, and are designed specifically for high-density termination of TIA recommended 4-pair horizontal cable. They will accommodate 24 cables in the 100 pair footprint and 72 cables in the 300 pair footprint. Clarity 6 Block Kits can be used with the Clarity 110C6 series of Category 6 110 patch cords for high speed cross connect applications and are backward compatible to Category 5e, 5 and 3. The use of a signal feedback technique internal to the Category 6 110 block controls cross-talk without compromising impedance.

Clarity 6 110 block kits provide a termination point that is more transparent to the signal for a significant improvement in signal-to-noise ratio. They also include color-coded wiring labels, which orient clips on to the wiring blocks and make termination even easier, and utilize a standard termination practice with a 110 impact tool.

The new Clarity 6 product line also includes new Category 6 patch panels, patch cords, modular 110 jacks as well as 110 cords. www.ortronics.com





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