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News recap: Ciena to buy networking software provider Cyan

In telecom news, Ciena has made a bid to acquire Cyan to expand its networking software portfolio, while the FCC pushes to expand broadband in rural areas.

This week in telecom news, Ciena Corp. made a bid to acquire Cyan Inc., to expand its networking software portfolio. The deal is expected to close later this year. Meanwhile, the Federal Communications Commission (FCC) offered $1.7 billion to carriers to expand broadband to rural areas in the U.S. where it is presently unavailable.

Internet applications are increasingly using traffic encryption to protect user information, according to a new report from Sandvine. However, some popular applications are falling behind in traffic encryption.

Ciena to buy Cyan to advance networking software

Telecom equipment maker Ciena Corp has agreed to buy networking software provider Cyan Inc. for $400 million.

The acquisition will expand Ciena's portfolio to include Cyan's software-defined networking (SDN), network functions virtualization (NFV) and metro packet-optical offerings. Cyan also offers multi-vendor network and service orchestration, and next-generation network management software.

"The addition of Cyan accelerates the availability of a complete solution for our customers to deliver virtualized networks and services on-demand," said Gary Smith, president and CEO of Ciena, in a statement.

When the deal closes, Cyan shareholders are expected to receive consideration equal to 0.224 shares of Ciena stock, which represents $4.77 per Cyan share. The deal is expected to close during Ciena's fiscal fourth quarter this year and is subject to regulatory approval and approval of Cyan stockholders. The boards of directors of Ciena and Cyan have approved the deal.

FCC looks to expand broadband in rural areas

The FCC is offering carriers $1.7 billion in subsidies from its Connect America Fund to expand broadband services to areas where broadband is currently unavailable over a six-year period.

The FCC offered funding to 10 carriers: AT&T, Cincinnati Bell, CenturyLink, Consolidated Communications, Fairpoint Communications, Frontier Communications, Hawaiian Telecom, Micronesian Telecom, Verizon and Windstream Communications. AT&T and CenturyLink were offered the most funding at $493 million to bring broadband to 1.265 million locations and $514 million to bring broadband to 1.19 million locations, respectively.

Carriers have until August to accept or decline the funding on a state-by-state basis. If a carrier declines funding for a particular area, the money will be made available to other operators. Frontier and Windstream have indicated they will accept funding.

If all 10 carriers accept funding, they will commit to bringing broadband streams of 10 Mbps downstream and 1 Mbps upstream to more than four million rural locations.

More Internet applications opting for traffic encryption

Encryption is becoming increasingly common among Internet applications to protect users from intrusions, according to research from broadband network service provider Sandvine.

Sandvine found that YouTube is the largest source of encrypted traffic in North America but is also a significant contributor of unencrypted traffic. Netflix recently decided to encrypt its traffic and will be responsible for two-thirds of encrypted traffic in North America by 2016.

"The decision by leading applications to encrypt their traffic is great for subscribers because it ensures the content of their Internet traffic remains private," said Don Bowman, CTO of Sandvine.

Not all popular applications encrypt traffic, however. The report found that while Google Play, the distribution platform for Android devices, encrypts its traffic, the traffic for Apple iTunes is not encrypted.

The Electronic Frontier Foundation, a non-profit digital rights group, will launch its Let's Encrypt program later this year and is expected to drive encryption adoption among smaller websites and applications, according to the report.

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