UCOL (which stands for Ultra-wideband Coherent Optical LAN) is a system aiming to provide integrated support of narrowband and broadband services (data, voice and video) to the need of specific localized communication environments. This report presents the advances of UCOL after the first year of the realization phase. A number of modifications have been made since the original plan, allowing the project to be feasible applying current technology. The new approach to the physical layer is described together with the already developed optical subsystems; finally the UCOL access protocol is reported