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A 'new' DQE loads up on fiber

Wednesday, February 16, 2000

By Ken Zapinski, Associate Editor/Business

DQE Inc. wants to light up Pittsburgh in a whole new way.

The parent company of Duquesne Light Co. yesterday unveiled a 200-mile long network of fiber-optic cables throughout Allegheny County that should help the region cash in on its high-tech future, according to company officials and others.

  DQE's fiber-optic network. (Post-Gazette)

They said few regions across the country have an extensive network able to use light pulses to move huge amounts of data down hair-thin strands of glass fiber. The DQE Communications' network should make it easier for area companies to shuttle data among sites throughout the region and make it easier for them to connect to high-speed nationwide networks under construction by companies such as Qwest, Level 3 and Williams.

This venture is DQE's latest as it tries to position the company as a high-tech success in order to bring some Internet-like pop to its utility-like share price.

"This is not your father's power company," Allegheny County Executive Jim Roddey said at yesterday's demonstration of the capacity of the fiber-optic network.

A single glass fiber can carry as much information -- data, voice, or video -- as a thick bundle of copper wires. Through Downtown, the DQE network has 576 individual fibers. That much capacity would permit such uses as broadcast-quality video conferencing for business meetings, off-site medical consultations or training courses delivered via the Web.

And, said Raj Reddy, Carnegie Mellon University professor of computer science and robotics, the fiber network will be able to adjust as technology improves. DQE Communications is installing the fiber-optic pipeline to carry the data. Telecommunication companies and others that lease space on the network will provide their own equipment to transmit the data.

Lasers send data as pulses of different colored light down the fiber simultaneously. State-of-the-art equipment not yet commercially deployed can transmit 1.6 terabits of data per second -- or 18 million times more than a standard desktop PC telephone modem -- over a single strand, Reddy said.

Penn Telecom, a subsidiary of North Pittsburgh Systems Inc., had already started building its own fiber-optic network throughout Pittsburgh to offer high-speed data and other service to business customers. Instead, the company will lease space on the DQE network and use its money on transmission equipment, Penn Telecom President Frank Macefe said.

That will allow the company to cut years from its expansion plans.

Laying fiber isn't difficult, DQE Chairman David Marshall said, but getting access to rights-of-way to install it can be. Duquesne Light Co. already had those rights-of-way, which made construction of a fiber-optic network a natural, he said.

The fiber strategy is part of DQE's move away from its roots as a traditional utility. Duquesne Light, for example, is selling its generation plants, while another arm of DQE is buying tiny water systems around the country.

Its Duquesne Enterprises venture makes investments in various e-commerce companies, such as Online Choice, which helps people purchase power via the Internet.

All the diversification moves, particularly into the Web arena, have helped boost DQE's share price. The stock was trading at 461/8 at yesterday's 4 p.m. close, up 10 points in the past month. Fiber network companies are trading at high levels; Qwest has a price-earnings ratio higher than 80. But ABN AMRO analyst Paul Cole said he doesn't expect much from the DQE Communications network. "I think relative to the e-commerce, the fiber loop is a small story," he said.

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