TD Securities analyst Chris Umiastowski has done some digging and discovered Nortel has quietly canceled its plans for the much-vaunted “Neptune” edge router that has been in the works for several years. It was supposed to be “the next big thing” from Nortel but delays after delay made any excitement and, for that matter, customer interest disappear. Umiastowski said Nortel came to the conclusion it didn’t want to compete with Alcatel, Cisco and others in the edge routing market. He believes this decision was made after Nortel couldn’t develop the complex software needed to provide the router with the features it needed to match those of rivals. He believes the technology will now use it internally within its wireless networks.

Clarification: Nortel said it hasn’t canceled the Neptune project but decided not to sell a data edge router to carriers. Instead, it will use the technolog within its wireless and voice products.

Update: Here’s a Light Reading story on Nortel’s new router plans.