Juniper Networks bolstered its presence on the broadband cable scene last week with a deal to buy Pacific Broadband Communications and its promising cable modem termination system (CMTS) hardware.

Juniper agreed to pay $200 million in stock for the privately held company, which has a scant revenue stream but good connections to the cable industry.

Juniper plans to fold Pacific Broadband's CMTS technology into its line of routers. Of particular importance is its ability to integrate the cable-modem head-end gear with its multiprotocol label switching (MPLS) equipment, routing technology that is expected to become increasingly important in multiple ISP architectures.

In the process, it should strengthen its position against industry leader Cisco, which dominates today's market for CMTS equipment.

The CMTS market has been flat to slightly down in recent quarters as MSOs use existing capacity and await next-generation gear that will enable them to offer different tiers of data services and local-phone offerings.

The advances, hinged on the DOCSIS 1.1 and PacketCable standards, are on the verge of hitting the market, creating an opening for increased competition.

Though Pacific Broadband has yet to begin selling its gear, the company signed a significant deal with Scientific-Atlanta Sept. 25, in which S-A will market and sell the equipment in the U.S. under its own brand and with its line of transmission and cable-modem gear.

The parameters of the agreement, expected to bear fruit in 2002, will not change. It still remains uncertain how large a role Scientific-Atlanta will play in the sales of Pacific Broadband equipment abroad.

The move marks another in a string of acquisitions of young, promising CMTS specialists by established manufacturers seeking to plug holes in their product offerings. ADC purchased Broadband Access for $2.25 billion in stock in September, and more recently, Motorola bought RiverDelta in July in a deal valued at $300 million.
? From Kagan Broadband

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