SAN DIEGO--Like last year, the evolution of 40-Gb/s and 100-Gb/s optical technology was a prominent topic at the OFC NFOEC show. But unlike last year, there is more agreement today about the timing of those technologies’ deployment in carrier networks.

At the 2007 show, carriers more or less warned component and equipment manufacturers that unless the cost of 40G technology came down, it would be eclipsed by 100G gear, which yields economies of scale that are shared with the enterprise world. Level 3 Communications, even admitted at the time it was considering skipping 40G altogether and migrating directly to 100G.

This year, however, there is less talk about leapfrogging to 100G. For starters, industry standards for 100G aren’t expected until 2009 or 2010, with the introduction of commercial gear widely expected in 2010 at the earliest.

“We think if we see 100G in the WAN before 2012, it will be pretty amazing,” said Dana Cooperson, vice president of network infrastructure for Ovum-RHK. “Even if 100G comes sooner than we think, an intermediate step will still be required. Networks are always going to want to have a hierarchy of capacity and speeds.”

Last year, Glenn Wellbrock, director of network technology development for Verizon Business, said prices for 40G gear were too high and wouldn’t be appealing until they came down to no more than 2.5 times the cost of four 10G links. This week Wellbrock said 40G prices should reach that target this year.

“I honestly believe this year we’ll see the price get to where it needs to be,” he said. “Maybe the end of 2008, but I think it will get there. We’re seeing those costs come more in line all the time. Every month, every quarter, it gets better. They’re still not where we think they need to be, not to where it would be the default solution, but certainly getting closer. Component guys are starting to line up and say, ‘I’m really good at this.’ Everyone’s using the same chip or the same modulator. The supply chain will work itself out.”

Verizon announced 40-Gb/s upgrades to certain high-traffic segments of its network last November, saying it was necessary to stay ahead of capacity demands but that it was still too expensive to deploy more broadly. Days later, the company announced a field trial of 100-Gb/s gear in Florida, in part to show vendors what it wanted and to prove it could work on existing infrastructure.

After last year’s OFC NFOEC, there was a lot of talk among manufacturers about working together to advance 100G technology, Cooperson said. “Right after the show, all those things fell apart.”

“Maybe there was some irrational exuberance last year,” she said. “Then people started to be realistic. 40G was hard. But the food chain finally became more robust. Things are going out into the field. That will drive the price of 40G down.”

Meanwhile, some of the research and development effort that went into 40G can be applied to 100G, such as advanced modulation techniques.

Still, there’s another reason carriers might not be in such a rush to 100G, Cooperson said. “Anything above that 100G threshold is really scary. Going from 40 to 100, they can see it from here. But going to 160 or something is like, ‘Oh my God--how are we going to do that?’”