While the telecommunications industry still faces dark days, one technology can see light at the end of the tunnel. Called free-space optics, it uses window- or roof-mounted lasers to transmit data from main fiber-optic lines through the air to end users. When the technology was commercially introduced several years ago, only a few corporate clients signed on, seeking faster service in large office buildings. Big telecom carriers stayed away, convinced they had the capital to dig up streets and sidewalks to bring more-reliable, but far more expensive, optical fiber to millions of individual customers.

But bad times killed most of those plans, giving a boost to free-space optics as an affordable solution. In March, Terabeam in Seattle signed a deal with a Chinese telecom carrier, China Railcom, to provide free-space optical links to businesses in Shanghai. Free-space players LightPointe in San Diego and fSONA in Richmond, British Columbia, say they have similar deals in the works. Indeed, though they won't discuss current negotiations, companies such as AT&T, Verizon, France Telecom, and Bell South have all recently completed trials of the systems.