In the fall of 2000, as Nortel Networks Corp.'s $10-billion optical sales wave was cresting, it introduced the Optera HDX optical switch.

The target of the giant beige box -- three times the size of a phone booth -- was Ciena Corp.

The small Baltimore-area company had been eating Nortel's lunch for years with the CoreDirector, an advanced switching device that AT&T and other big customers were buying in large numbers.

The giant HDX box was the focus of a Nortel celebration in Ottawa, with rock bands and international experts piped in via Nortel optical links from around the world.

A blimp floated over the event, advertising the message "HDX: the Next Internet."

But the HDX never lived up to its promise. Nortel ultimately lost control of the optical market, and then its whole business with a bankruptcy filing in January.

Yesterday, Ciena bought Nortel's metropolitan ethernet networks business for $769 million US in cash and debt -- less than half of the division's sales of about $1.8 billion last year and about 55 per cent of sales this year.

Ciena, with less than half the sales of Nortel's optical division so far this year, bought it following a three-day auction battle with Nokia Siemens Networks.

It will pay $530 million in cash and $239 million in convertible notes for an operation that ranked with the top four in the world as recently as last year.

Ciena, by comparison, ranked just 10th. One difference is that Ciena products have been profitable for several years.

Buying the Nortel optical assets will effectively double the size of Ciena's operations to 4,100 employees. The company already has 200 employees in Ottawa as a result of the acquisitions of Catena Networks and Akara several years ago.

Ciena has pledged to hire 2,000 Nortel employees, or about 85 per cent of the workforce of about 2,300.