Corvis in the money with Williams deal

Williams Communications successfully completed on Tuesday its trials of communications equipment from Corvis and extended its contract with the optical networking company.

Corvis will begin shipping in the first quarter its optical hardware to Williams, which is constructing a 33,000-mile nationwide fiber-optic network.

Williams also extended its contract with Corvis to a multiyear deal worth $300 million, from the previous two-year, $200 million pact.

The news is significant for Corvis, a company notorious for having gone public with no revenue during the heyday of optical IPOs. Broadwing Communications, a carrier and Corvis investor, provided Corvis with its first sales in October and will be joined by Williams.

Qwest Communications International also is testing Corvis' gear, an optical switch that carries Internet and voice traffic long distances at high speeds without the need to boost or regenerate the signal.

Corvis has been the subject of much scrutiny in recent months. Wall Street had been abuzz with rumors that Corvis could lose one of its customers, which would be a blow considering the company has announced only three customers. Although analysts have refuted the rumor, Williams uses equipment similar to Ciena's. Corvis founder David Huber also started Ciena.

Williams had tested Corvis' equipment in a stretch of its network from Dallas to Atlanta to New York.