Cisco Unveils Next-Generation Routing System

Updated with Cisco closing price.

SAN JOSE, Calif. ( TheStreet) -- Cisco's ( CSCO) much-hyped plans to revolutionize the Internet have finally been unveiled with the networking giant announcing its latest router technology.

In a webcast on Tuesday, Cisco launched its new CRS-3 router, which the company claims will pave the way to much faster Internet speeds. In separate announcement, AT&T ( T) said that it has already used the CRS-3 in a 100-Gigabit trial.
The Cisco CRS-3 Carrier Routing System

"It's all about the next generation of productivity," said Cisco CEO John Chambers, adding that the CRS-3 offers more than 12 times the capacity of its competitors. "It's the foundation for the next generation Internet."

Another Cisco executive explained that the CRS-3 can handle data at 322 terabits a second, compared to 92 terabits a second on the first version of the CRS. "It can deliver all the movies ever made in just four minutes," he said. "The power is absolutely tremendous."

Chambers explained that the CRS-3 can handle 1 billion videos at any one time and used the webcast to reiterate his company's video mantra.

"Video is the killer app," he said. "Video brings the Internet to life and lets us all participate in a very constructive way."

Despite all the marketing hype, Cisco's shares closed down 20 cents on Tuesday at $26.13, but crept up 1 cent, or 0.04%, in extended trading.

Cisco -- 2 Stocks in One

The networking giant, however, is not the only company looking to push the Internet envelope. Yesterday, for example, Cisco's router rival Juniper ( JNPR) announced that it is working with Verizon ( VZ) to boost network speeds, and had helped the telecom giant complete its own 100-Gigabit trials.

Cisco had touted today's announcement as something that would "forever change the Internet" in an email sent out last week, hinting at some form of superfast broadband network.

There had been reports in the media that Cisco was working on an ultra-high speed system for Internet access and had been partnering with a number of U.S. service providers on the plan.

Broadband is big news at the moment. Search giant Google ( GOOG) recently unveiled its own plans in this space and Washington will unveil its ambitious national broadband plan on March 17.

In a company blog post last month, Google's broadband plans were announced: The search giant explained that it will build and test ultra high-speed broadband networks in a small number of trial locations across the U.S. Google also promised to deliver Internet speeds more than 100 times faster than what most Americans have access to today. The service, it added, will be offered at a competitive price to at least 50,000 -- and potentially up to 500,000 -- people.

America, despite its unquestioned status as a technology superpower, remains a broadband laggard, with about a third of the country's population disconnected from high-speed Internet.

This is a source of frustration for the likes of Google, which aims to provide information and services as quickly as possible to Internet users. Like Google, Cisco may be attempting to up the ante in the push towards higher-speed Internet services.

Today's announcement also marks Cisco's return to its networking roots. The San Jose, Calif.-based firm has been on a mission to open up revenue outside of its traditional business, entering the server market and throwing its weight behind video services.

With the U.S. national broadband plan soon to become reality, though, there could be big opportunities to support high-speed networks, which Cisco clearly has its eye on.

"We will partner entirely with service partners," explained Chambers, but did not reveal whether Cisco is working with other telcos in addition to AT&T.

The CEO was also questioned about Google's recent move into this space, and downplayed any budding competition between the two tech bellwethers.

"Google is a wonderful company, they are pushing productivity and more creative ideas," he replied. "Our strategy is more one of 'how do we bring this to life'?"

"We love anyone that loads networks," he added. "We love Google and we love Apple ( AAPL)."

-- Reported by James Rogers in New York


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