The Idea Factory: Bell Labs and the Great Age of American Innovation
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John Pierce had never been enthusiastic about AT&T’s stuffy corporate management. In his Bell Labs office, Pierce had placed a large sign on his desk that asked, in reference to AT&T’s headquarters, “195 Broadway: Is there intelligent life there?” But the threat of breakup stirred in Pierce, now an academic in California, a fervid willingness to defend his old employer. “It is certainly within the law for the Department of Justice to institute a suit against the Bell System,” Pierce wrote in an essay he submitted to the New York Times op-ed page, “but I think that it goes beyond all reason when they assert that this could possibly result in cheaper or better telephone service for the public. We have too many examples in other countries of the high costs and poor service created by the very sort of situation that the Justice Department is trying to create.” John deButts, the powerful chairman of AT&T, read one of Pierce’s defenses of the phone company in a financial magazine and sent Pierce a warm note on his personal stationery. “Not many men have so broad a grasp of how crucial organization is to innovation, and we are fortunate to have so authoritative a voice as yours to point out what mischief the Justice Department suit would do should it succeed. Which it won’t.”9
John deButts considered AT&T’s vast communications network to be unique in all the world. No one else could replicate it; no one else could run it. Its construction and maintenance, done over the course of a century, had been Herculean. Its electronic architecture was the product of genius and hard work. He was correct in all these respects. He did not seem to grasp, however, how quickly technology could now be replicated, in part thanks to Bell Labs’ widely available patents. Mervin Kelly had predicted during World War II that the telecommunications industry would eventually begin to compete against the larger electronics industry, where radio and television makers constantly battled over products and prices. “We have been a conservative and non-competitive organization,” Kelly had pointed out to his colleagues in 1943. “We engineer for high quality service, with long life, low maintenance costs, high factor of reliability, as basic elements in our philosophy of design and manufacture. But our basic technology is becoming increasingly similar to that of a high volume, annual model, highly competitive, young, vigorous and growing industry.”10
MCI was proof of that striving and competitive future. Bob Lucky recalls a day in the early 1970s when several AT&T executives were discussing with Bell Labs executives the prospect of upstart companies offering long-distance service. “You don’t have to worry about this,” the AT&T executive assured them, “because we have the network. No one else has the network.” For a short while, at least, that was true. They didn’t realize at the time that anyone could build a network.
AS LEGAL MANEUVERS BEGAN in late 1974—the trial, most observers agreed, would take years, perhaps a decade, to resolve—one of the points of discussion had to do with whether telecommunications was now a “mature” industry. A mature industry shouldn’t need the protective hug of federal regulations. A mature industry was ready for jolts of competition. More than half a century before the Justice Department filed its latest suit, AT&T president Theodore Vail had set forth a goal for his phone company: “One policy, one system, universal service.” Had that goal been achieved? There were now cables and microwave links and electronic switching stations that connected all Americans; there were likewise satellite links and undersea cables that connected the country to the rest of the world. At Bell Labs, Bill Baker, though loath to concede that a mature industry like his should be deregulated, agreed with this assessment. “I think that the era of having to demonstrate new technical communications functions is largely behind us,” he said. “It’s no longer necessary to show, for example, that all of the people of the world can be connected together, or that voice and video can be transmitted with fidelity and reliability. Now we have to concentrate on maximizing the efficiency, performance and economy of all these facilities.”11
Baker chose his words carefully; they were meant to be strategic. Improving efficiency and lowering costs could help the Bell System maintain an advantage in what was shaping up to be a new era of competition. A look back on the network of the early 1970s, however—especially with a knowledge of what it would become in the decades following—erodes any belief that it was near completion. The businesses and citizens of the world had only begun to consider how they might send, and how they might use, information. What altered their understanding were two complex and expensive projects, both undertaken at Bell Labs amid the efforts to break its parent company apart. These projects—the first in exploring how to manufacture and install glass fiber to carry light pulses, the second in mobile telephones—actually transformed the network into something else. Those efforts made global communications into something thoroughly modern.
ALMOST FROM THE START—from the time that Rudi Kompfner in 1960 went around the world to recruit scientists to work on what he called “optical communications”—Bell Labs’ managers understood that moving the world’s communications systems from electrical waves to light waves would require several inventions. The first was a laser. It wouldn’t be the kind of laser that existed already in the 1960s, however. It would be a new kind with certain desirable characteristics. First, it would have to be durable, so that it could emit a beam for years without dying out. Second, it would have to work at wavelengths that were appropriate for communications. Third, it would have to work at room temperature, meaning it wouldn’t need to be supercooled, which many lasers required to prevent overheating. Finally, it wouldn’t be the size of a table top. It would be small, like a transistor, and made from some combination of solid materials, most likely semiconductors. “At this moment we have a pretty good notion what an eventual system would look like, and what some of the essential ingredients are going to be,” Kompfner wrote to John Pierce in April 1970. One of them, he noted, was a room-temperature laser, which his group was pursuing aggressively. “That does not exist,” he noted, but “that does not cause us to sit around waiting.”12 If there was going to be a functioning optical communication system in ten years, Kompfner added, “much of it will be based on what is being done here now.”
The laser—or rather the lasers—that Kompfner and Pierce were looking for arrived fairly quickly. In the early 1970s Bell Labs scientists came up with several types of revolutionary devices known as room-temperature, continuous-wave, heterostructure semiconductor injection lasers.13 The fearfully long name belied their size. The lasers were tiny, no larger than a grain of sand. Essentially, they consisted of a rectangular slab, polished on one face to a mirrorlike finish, made from a sandwich of several specially prepared semiconducting materials. (Usually they relied on a combination of gallium and arsenic.) On the top and bottom of this tiny crystal were two metal contacts. When these were connected to a power source, such as a common battery, the holes and electrons inside the semiconductor crystal would combine to emit a steady beam, which would emerge from the slab through a “stripe” on its polished face.14 Significantly, that steady beam could be “modulated” to transmit a multitude of digital signals.15 In other words, a conversation in the form of an electrical signal, moving through a copper cable, could be transformed into the on/off pulses of a laser. Tens of millions of these digital pulses could be sent each second.16
Kompfner sensed an urgency to the work. There was now competition wherever he looked. In every part of the developed world, scientists and engineers were seeking new kinds of semiconductor lasers. At the same time, a number of companies were aggressively pursuing the second essential invention: a medium that could carry the laser pulses long distances. By October 1971, about a year had elapsed since Corning announced it had created the first glass fiber practical for optical communications. Kompfner now seemed convinced that fiber was the answer to the future. As he saw it, though, Corning was still ahead of Bell Labs. “The progress made with optical fibers” at the Labs was outstanding, he noted, but it was not in the “breakthrough” class like Corning’s.17
Kompfner’s main advantage was that Bell Labs could throw almost unlimited amounts of talent and money at a problem, especially when solving it had such tantalizing potential. Optical fiber was exactly that kind of problem.
From the beginning, a basic architecture for fiber was generally accepted. Not much thicker than a human hair, the glass strand was composed of two kinds of exceedingly clear glass. On the inside was a solid “core” of glass; on the outside was a “cladding” of glass. There was an important difference between the two: The cladding must have what’s known as a smaller refractive index than the core glass. That difference would allow pulses of light, sent through the core, to be confined as they traveled along. Essentially, the light waves were reflected off the walls of the core glass as they moved forward. Sometimes, optical scientists compared the reflective effect inside the fiber core to looking up at the sky while underwater in a swimming pool. The difference in the refractive index of water and air makes the surface appear like a mirror.
The fundamental goal in making transistor materials is purity; the fundamental goal in making fiber materials is clarity. Only then can light pass through unimpeded; or as optical engineers say, only then can “losses” of light in the fiber be kept to an acceptable minimum. Two problems stand in the way of this objective, and both plagued early fiber makers. When a fiber shows too much “absorption,” it means that too much light is being lost thanks to traces of impurities—metals such as nickel and iron—within the glass. The other problem is called “scattering.” A more complicated phenomenon, scattering often arises from imperfections—infinitesimal bubbles or cracks, for instance—in the glass crystal itself.
In the early 1970s, Corning and Bell Labs struck an agreement to share their patents on fiber production. Over the next few years, both companies came up with sophisticated ways to reduce absorption and scattering. Making fiber had by then become a profoundly involved process. It was done in several steps, and at high temperatures, and involved a bath of chemical vapors and exacting mechanisms to “draw” the fiber out from a molten glass rod and stretch it to an ethereal thinness.18 At Bell Labs, the fiber became clearer and clearer. Indeed, it reached astonishing levels of clarity. Within a few years, if you were to somehow look through a kilometer-thick block of the kind of glass being made by Corning or Bell Labs, it would be roughly as clear as looking through several panes of window glass.19 The fiber also became more flexible, which would prove essential in any system where fiber, bundled together into cables, would have to snake through underground ducts and up into buildings.
The process was rapid enough that a group of Bell Labs engineers began meeting in Holmdel to conceive of a test project for the new material.20 By around 1975, not all the kinks were worked out. Fibers were still hard to make. Lasers were not always durable—they could burn out after a few thousand hours. The whole installation process looked to be far more expensive than copper cable. Also, there were a variety of challenges involved in splicing fiber cables together and building repeaters to amplify the telephone signals when they weakened after a certain distance. John Pierce, coming through the Holmdel area on one of his consulting trips from California, nevertheless wrote an exultant letter to Bill Baker not long after about the progress he encountered. The only problems, as Pierce saw it, were to demonstrate that Americans “will want and use all the communication that optical fibers can provide, and that light-wave communication is bound to get cheaper.”21 It was now obvious that the Picturephone wasn’t going to soak up all that extra bandwidth. Perhaps something else would come along.
AT THE PRECISE MOMENT that optical systems were ready to be field-tested, a group of Bell Labs engineers were putting the final touches on a test system for mobile phones. The two technologies were not in a race. One had moved fast and the other slow. Whereas lasers and optical fiber represented the culmination of fifteen years of rapid innovation, mobile phones had undergone a longer, stop-and-start evolution. In fact, to locate their origins you had to go back several decades, through a technical and political history so convoluted that many managers at Bell Labs didn’t even know the particulars.
The beginnings of the wireless radio business dated back to ship-to-shore calls that were first made in the early decades of the twentieth century. Beginning in 1929, a small number of ocean liners were equipped with radio-telephone service—a business that catered to an affluent clientele stuck at sea for a week or more.22 A call from a ship’s passenger would be sent over radio waves to the shore, where it would be received by massive antenna systems on the New Jersey coastline and then connected into the phone system. At about the same time, land-based mobile service began. The first mobile radios were introduced by the Detroit Police Department in 1921, and the concept quickly caught on.23 The early devices for fire and police vehicles were used only for work. A policeman could call a colleague in another patrol car, for instance, but to call a colleague at his home would require getting patched into the larger phone system through the police station switchboard. At the time, a caller couldn’t dial directly from a mobile telephone into what was known at AT&T as “the switched network.”
During World War II, radio communications took a great leap. Bell Labs, at the military’s behest, had worked on compact and sophisticated communications systems for tanks and airplanes. Meanwhile, Motorola, a small company out of Chicago, built a rugged “handie-talkie” for soldiers. In Europe, Asia, and North Africa, these portable devices changed the nature of battlefield communications and military improvisation. To electronics executives back home, it was also apparent that there would be applications for these technologies in postwar society. As early as 1945, Mervin Kelly was reviewing plans for Bell Labs and AT&T to create a business selling mobile telephone service to car owners.24 In select cities, the phone company would mount a powerful antenna on the tallest hill or building to send and receive calls from drivers nearby. The equipment in the cars was heavy—the early sets, often made by Motorola, were mounted in the trunk, and were connected to a handset near the driver (later the sets were shrunk to about the size of an attaché case and mounted under the seat). The mobile phones worked—you could now call an operator who would connect you to any number—but they were pricey: Costs in the late 1940s ran about $15 a month (about $145 in 2010 dollars) and fifteen cents for every minute you used the service. The main shortcoming, however, was that the Federal Communications Commission had made only a narrow portion of the radio spectrum—a portion just above the frequency of FM radio—available for mobile telephone service. The narrow spectrum meant there were only a few channels available to make calls. In all of Manhattan, fewer than a dozen people could use their car phones at any one time.
One of the keys to unlocking the mobile business was better technology. But another key was dangling on a chain in Washington, D.C., at the FCC. The radio frequency spectrum, as Bell Labs’ Bill Jakes once put it, is a natural resource. The FCC, as the custodian of this resource, is given the authority to decide how to “balance the sometimes conflicting needs of the different services required by society.”25 Should more of the spectrum be given to TV broadcasters? Or should it go to radio? What was clear to Bell Labs’ researchers after the war was that if regulators made more of the radio spectrum available, their mobile phone system’s capacity would increase dramatically, and car telephones would presumably become instantly more popular. Already there were enormous waiting lists in some cities for the devices. In 1947 AT&T began to petition the FCC for more spectrum in what was known as the ultra-high-frequency, or UHF, range. These were frequencies just slightly higher than what was already available to mobile phone users. As part of the company’s petition, engineers presented a plan that was extracted from a long technical memo, completed in early December 1947, by a Bell Labs employee named Doug Ring, who was assisted by a colleague named Rae Young. The two men worked out of the small rural radio lab at Holmdel. Their memo happened to be written the same month that John Bardeen and Walter Brattain were
perfecting their transistor at Murray Hill, thirty miles to the north, and that Claude Shannon was finishing up his paper on information theory.
No one would have put Ring and Young in such rarefied company. Their memorandum—“Mobile Telephony: Wide Area Coverage”—merely outlined how an “adequate mobile radio system should provide service to any equipped vehicle at any point in the whole country.” Nevertheless, it entertained an intriguing idea: Rather than continue with the idea of placing a single high-powered antenna in a city center, there might be an advantage in spreading a multitude of low-powered antennas over a wider area to service mobile phones. More strikingly, Ring and Rae suggested considering an area of mobile coverage not as big circles with an antenna in the center but as a honeycomb of small hexagons, perhaps with antennas on the corners. Each hexagon could represent a distinct region for mobile reception, perhaps a few miles in diameter. Each hexagon, moreover, could have its own range of frequencies.
This approach would allow for a very efficient use (and reuse) of the limited radio spectrum—that valuable natural resource. You could connect far more calls with many small coverage areas than a single large coverage area. If the FCC allowed a block of frequencies to be used for mobile radio channels, Bell Labs could cut that block into, say, five slices. It could then assign a different slice to each of five hexagons in the honeycomb. This would help minimize interference and increase capacity, since the hexagon next door to the first hexagon would have a different slice of frequencies—and when you drove from one hexagon to another your phone would automatically switch frequencies. The hexagon next to that would have still a different range—and your phone would switch frequencies again. Eventually, once you got far enough away from the first hexagon, you could drive through another clump of five hexagons with the same frequencies as the first clump. That was feasible since the distance now precluded any interference. Once the pattern was repeated, it could be repeated again in the neighboring area of hexagons. And the pattern could effectively go on forever. The capacity for mobile calling would be far larger than what presently existed. Mobile radio didn’t have to be local. It could be national.26