Nortel snags Shasta to enhance billing

SUNNYVALE, CALIF. - Developing usage-based billing for next-generation IP networks can be quite a headache. Nortel Networks last week got serious about alleviating the problem.

The company bought Shasta Networks, a start-up based here that specializes in IP gateways and service provisioning systems placed at the edge of IP carrier networks. Shasta's systems track usage, authorization and other elements to add needed features to IP virtual private networks (VPN).

Shasta's Subscriber Service System (SSS), sold to service providers, is a highly scalable network-edge collection of hardware and software that can aggregate tens of thousands of subscribers and track their traffic volume. The package can also extend quality-of-service distinctions to different classes of IP VPN services that carriers may want to offer users.

In addition, SSS can be manipulated to let IP service providers offer custom services with different levels of authentication, encryption and authorization, as demanded by users.

Nortel will pay up to $340 million in stock and cash for Shasta. The exact payment depends on what Nortel labeled as Shasta's ability to achieve "certain business objectives."

Shasta co-founder Anthony Alles says he hopes the Nortel connection will help generate sales, while Nortel officials say they were looking for provisioning systems to match recent investments in IP optical systems and gigabit-class routing switches.o