The Idea Factory: Bell Labs and the Great Age of American Innovation

by Jon Gertner

18 W. O. Baker, letter to Dr. John Pierce, January 24, 1977. Pierce Collection, Huntington Library.

  19 In addition to a demonstration of the cellular market, the FCC also wanted a deeper demonstration of cellular technology. For this, Bell Labs had set up a working cellular system in Newark, New Jersey. There were no customers, but there was a working cellular system, again being run by Gerry DiPiazza, who drove around in a retrofitted trailer home to sharpen his understanding of urban noise and cellular signals. “Most of the research was done in the middle of the night,” DiPiazza says, “because the traffic was so bad in the urban center.” Sometimes DiPiazza would find himself in a rough neighborhood at 2 a.m. with a street gang banging on his car. The Newark system was especially helpful in exploring how to create statistical rules—based on environment and topography, for instance—for start-up cellular systems. At the same time, DiPiazza and his colleagues sought to work out mathematical algorithms so that computer software could decide when, and how, to switch a signal from one cell to another.

  20 Decision to Divest: Major Documents in U.S. v. AT&T, 1974–1984, edited by Christopher H. Sterling, Jill F. Kasle, and Katherine T. Glakas (Washington, DC: Communications Press, 1986), pp. 1–15.

  21 “Behind AT&T’s Change at the Top,” Business Week, November 6, 1978.

  22 Judge Harold Greene, “Address, Consumer Federation of America,” February 17, 1984. AT&T archives.

  23 In my discussion of vertical and horizontal integration, I am indebted to The Fall of the Bell System: A Study in Prices and Politics, by Peter Temin with Louis Galambos (New York: Cambridge University Press, 1987).

  24 Ibid., p. 252.

  25 “Bell Labs at Fifty,” Bell Telephone Magazine, January–February 1975, p. 14.

  26 Andrew Pollack, “Two Settlements May Widen the Pressures on Competition,” New York Times, January 9, 1982.

  27 Christopher Byron, “Stalking New Markets,” Time, January 25, 1982.

  28 “Bell Labs: Imagination Inc.,” Time, January 25, 1982.

  29 Judge Harold Greene, “Address, Consumer Federation of America,” February 17, 1984.

  30 Peter F. Drucker, “Beyond the Bell Breakup,” Public Interest, Fall 1984.

  CHAPTER EIGHTEEN: AFTERLIVES

  1 M. J. Kelly, letter to William O. Baker, February 9, 1959. Baker Collection, Princeton University.

  2 Kelly’s résumé, updated in December 1965, lists his posts as a director at Prudential Insurance and as a director at the optical company Bausch & Lomb (1959–63) and vacuum tube maker Tung-Sol Electric (1959–64).

  3 Interview of Katherine Kelly by Lillian Hoddeson, July 2, 1976, Niels Bohr Library & Archives, American Institute of Physics, College Park, MD; www.aip.org/history/ohilist.

  4 John Pierce, oral history conducted by Andy Goldstein, IEEE History Center, New Brunswick, NJ, August 19–21, 1992.

  5 William Baker, letter to John Pierce, January 29, 1973. Pierce Collection, Huntington Library.

  6 James Fisk, letter to John Pierce, February 1, 1973. Pierce Collection, Huntington Library.

  7 A. O. Beckman, letter to Dr. William Shockley, September 3, 1955. In addition to the $30,000 per annum (about $237,000 in 2009 dollars) the letter also stated that “Beckman agrees to grant to Shockley an option to purchase 4000 shares of Beckman stock under its existing restricted stock option plan.” Shockley Collection, Stanford University.

  8 “John Bardeen, Walter Brattain, William Shockley, interviewed at the Sheraton-Park Hotel in Washington, D.C.,” conducted by John L. Gregory, April 24, 1972. AT&T archives.

  9 Moore’s law describes how the number of transistors on computer chips doubles every two years or so. See http://www.intel.com/technology/mooreslaw.

  10 Gordon Moore, “Solid-State Physicist,” Time, March 29, 1999.

  11 “Is Quality of U.S. Population Declining? Interview with a Nobel Prize–Winning Scientist,” U.S. News & World Report, November 22, 1965.

  12 John L. Moll, “William Bradford Shockley: 1910–1989,” National Academy of Sciences, Biographical Memoirs, 1995.

  13 Shockley’s sensitivity had apparently been evident from a very young age, back when his father had recorded in his journal that “Billy always gets angry because he is thwarted or denied something.” Shockley Collection, Stanford University.

  14 Victor Cohn, New York Post, April 25, 1968, p. 79.

  15 William Shockley, “Proposed Research to Reduce Racial Aspects of the Environment-Hereditary Uncertainty,” April 24, 1968. Shockley Collection, Stanford University.

  16 W. Shockley, memo to F. D. Leamer and J. A. Morton, “Reduction of Consulting Time for Bell Telephone Laboratories,” April 26, 1968. Shockley Collection, Stanford University.

  17 Rae Goodell, The Visible Scientists (Boston: Little, Brown, 1977), p. 192.

  18 Baker Collection, Princeton University. The note is from October 14, 1981. Baker wrote, “I said I can’t think of any source of funds.”

  19 Syl Jones, “Playboy Interview: William Shockley, a Candid Conversation with the Nobel Prize Winner—in Physics—About His Theories on Black Inferiority and His Donation of Sperm for a ‘Super Baby,’” Playboy, August 1980.

  20 “Shockley Runs to Air Theories on Genetics,” Associated Press, from the Camarillo (CA) News, May 27, 1982.

  21 “John Bardeen, Walter Brattain, William Shockley, interviewed at the Sheraton-Park Hotel in Washington, D.C.,” conducted by John L. Gregory, April 24, 1972. AT&T archives.

  22 Anthony Liversidge, “Profile of Claude Shannon,” in Claude Elwood Shannon Collected Papers, reprinted (in a slightly different form) from Omni magazine, August 1987. Quoted by permission of Liversidge.

  23 Whether it was a sign of his loosening up or his lifelong disregard for social norms, during the 1960s Shannon also had a brief reunion with his first wife, Norma. According to Barzman’s autobiography, the two met in a hotel in Boston, where Barzman’s daughter (by her second husband) was attending college. “Why did you leave me?” Shannon asked her angrily. Eventually, he relaxed and told her about his life: “I have a nice wife, wonderful kids. I teach, do research. I have a collection of twenty-three cars. I tinker.” Later, Barzman relates, “We went upstairs to my room and made love.” Norma Barzman, The Red and the Blacklist: The Intimate Memoir of a Hollywood Expatriate (New York: Nation Books, 2004).

  24 “A Conversation with Claude Shannon,” Robert Price and Claude Shannon, December 20, 1983. Shannon papers, Library of Congress.

  25 Baker was particularly aware of the late-in-life financial travails of Lee De Forest, the inventor of the vacuum tube. Baker told his colleagues that he never wanted such a fate to befall someone like Shannon.

  26 Shannon also believed a smart gambler could take advantage of certain inefficiencies in gaming systems, an idea that led him to travel to various Nevada casinos around this time with a mathematician and investor named Ed Thorp. Their intent was to beat the house in roulette and cards. Many of these exploits are detailed in William Poundstone’s book Fortune’s Formula: The Untold Story of the Scientific Betting System That Beat the Casinos and Wall Street (New York: Hill & Wang, 2005).

  27 Arthur Lewbel, author interview.

  28 Claude Shannon, “Scientific Aspects of Juggling,” in Collected Papers, edited by N. J. A. Sloane and Aaron D. Wyner (New York: IEEE Press, 1993).

  29 Arthur Lewbel, “A Personal Tribute to Claude Shannon,” http://www2.bc.edu/~lewbel/Shannon.html.

  30 Shannon still rarely answered letters or spoke with reporters. The exception was when he received a letter about chess or juggling, which he would often answer promptly, even if the correspondent was a high school student.

  31 John Horgan, “Claude E. Shannon: Unicyclist, Juggler and Father of Information Theory,” Scientific American, January 1990.

  32 Rudi Kompfner, note to John Pierce, June 1, 1977. Pierce Collection, Huntington Library.

  33 John Pierce, letter to Rudi Kompfner, July 5, 1977. Pierce Collection, Huntington Library. />
  34 Edward E. David Jr., Max V. Mathews, and A. Michael Noll, “John Robinson Pierce: 1910–2002,” National Academy of Sciences, Biographical Memoir, 2004.

  35 As Pierce remarked, the scale has “frequency ratios 3:5:7:9 rather than the frequency ratios of the major tetrad, 4:5:6:8; the new scale uses tones with odd partials only, and a ‘tritive’ with a frequency ratio 3 replaces the octave of frequency ratio 2.” John R. Pierce interview by Harriet Lyle, Pasadena, California, April 16, 23, 27, 1979. Oral History Project. California Institute of Technology archives.

  36 John Pierce, My Career as an Engineer: An Autobiographical Sketch (University of Tokyo, 1988).

  37 Program notes to the Pierce concert. Pierce Collection, Stanford University archives.

  38 William O. Baker, letter to Clark Clifford, April 22, 1991. Baker Collection, Princeton University.

  39 On the contrary, the FCC seemed to have clear objectives, even if they weren’t to Baker’s liking. The simply stated goal of the Telecommunications Act of 1996, for instance, was “to let anyone enter any communications business—to let any communications business compete in any market against any other”; http://transition.fcc.gov/telecom.html.

  40 William O. Baker, interview with Michael Noll.

  CHAPTER NINETEEN: INHERITANCE

  1 John S. Mayo, “Evolution of the Intelligent Telecommunications Network,” Science 215 (February 12, 1982).

  2 John R. Pierce, letter to A. Michael Noll, June 18, 1986.

  3 Christopher Byron, “Stalking New Markets,” Time, January 25, 1982.

  4 Andrew M. Odlyzko, “The Decline of Unfettered Research, revised version,” October 4, 1995, http://www.dtc.umn.edu/~odlyzko/doc/complete.html.

  5 Today’s AT&T is a different organization than the AT&T that existed in the mid-1990s. As the Southern Bell Corporation—originally one of the regional operating companies—grew in wealth and subscribers, it acquired its former parent company in 2005. Ultimately, it adopted its name as well.

  6 Ron Insana, “Can He Save Lucent? Henry Schacht Comes Out of Retirement to Stop the Bleeding,” Money, October 2001.

  7 Kenneth Chang, “Panel Says Bell Labs Scientist Faked Discoveries in Physics,” New York Times, September 26, 2002.

  8 William Speed Weed, “The Way We Live Now: 10-13-02: Questions for Paul Ginsparg,” New York Times Magazine, October 13, 2002.

  9 Sara Silver, “With Its Future Now Uncertain, Bell Labs Turns to Commerce,” Wall Street Journal, August 21, 2006.

  10 Geoff Brumfiel, “Bell Labs Bottoms Out,” Nature, August 20, 2008.

  CHAPTER TWENTY: ECHOES

  1 Brian Hayes, Infrastructure: A Field Guide to the Industrial Landscape (New York: W. W. Norton, 2005), p. 283.

  2 The Crawford Hill lab has a curious history. As Saarinen’s Black Box was being planned for the Holmdel site in the late 1950s, about sixty Bell Labs researchers in Holmdel—who had been working in the modest woodframe labs slated for replacement—splintered off. Led by Rudi Kompfner, they succeeded in getting funding from Bill Baker to build a small, three-story lab at the base of nearby Crawford Hill, the site of the Echo satellite experiment, a few miles away. The researchers at the new lab focused on microwave and lightwave communications.

  3 Press release, Intel Corporation, October 19, 2010.

  4 Hendrik Hertzberg,“Open Secrets,” New Yorker, August 2, 2010. Hertzberg’s column summarized many points in the multipart Washington Post story “Top Secret America,” by Dana Priest and William M. Arkin; http://projects.washingtonpost.com/top-secret-america.

  5 Nicholas Carr, “Is Google Making Us Stupid?” Atlantic, July–August 2008.

  6 M. J. Kelly, “Remarks Before Bell System Lecturer’s Conference,” October 2, 1951.

  7 Jon Gertner, “Mad Scientist,” Fast Company, February 2008.

  8 John Pierce, Testimony, Subcommittee on Communication of the Senate Commerce Committee, March 22, 1977. Pierce Collection, Huntington Library.

  9 “Rising Above the Gathering Storm, Revisited: Rapidly Approaching Category 5,” National Academy of Sciences, 2010. The figure citing that 4 percent of the nation’s workforce creates jobs for the other 96 percent is credited to the National Science Board, Science and Engineering Indicators 2010.

  10 John Pierce, memo, February 16, 1968, in response to a question about why the Bell system got things done profitably and without disaster. Pierce Collection, Huntington Library.

  11 John R. Pierce, “Mervin Joe Kelly: 1894–1971, National Academy of Sciences, Biographical Memoir, 1975.

  12 Among academics, the widely accepted notion that Bell Labs was exclusively a “closed” innovation model—whereby every innovation is started and developed within the firm, as opposed to a more modern “open” innovation model, whereby a parent company depends collaboratively on customers and outside innovators for ideas—deserves more consideration. Without question, AT&T depended upon its vertical integration for innovations. But Bell Labs’ staffers were open to a stream of outside ideas through regular contacts with other industrial labs, military contractors, academic affiliates, patent licensing partners, and participants in weekly Bell Labs symposiums. Managers also acquired superior technologies from outside when warranted. Examples of the latter are the vacuum tube repeater (from Lee De Forest), the three-level maser (from Harvard professor Nicolaas Bloembergen), and optical fiber (from Corning). A more typical example: During John Pierce’s first week of work at the Labs he was directed to visit Philo Farnsworth’s television shop in Manhattan to see if there was anything useful to license for the telephone company. Nothing that day caught Pierce’s interest.

  13 For a thorough examination of Terman’s work on the New Jersey innovation hub, see Stephen B. Adams, “Stanford University and Frederick Terman’s Blueprint for Innovation in the Knowledge Economy,” in Sally H. Clarke, Naomi R. Lamoreaux, and Steven W. Usselman, eds., The Challenge of Remaining Innovative: Insights from Twentieth-Century American Business (Stanford, CA: Stanford Business Books, 2009).

  14 “An Interview of Dr. J. R. Pierce by Mr. Lincoln Barnett for the American Telephone & Telegraph Company,” February 13, 1963. AT&T archives.

  15 Claude Shannon, oral history conducted in July 1982 by Robert Price, IEEE History Center, New Brunswick, NJ.

  16 Dick Frenkiel also made the case, as did many others I interviewed, that present telecommunications and Internet costs would likely be higher had the Bell System remained intact. Nevertheless, it is difficult to broadly contend that telecommunications is, at present, “cheap.” Some technologies (Gmail, Skype) undoubtedly are; others (monthly iPhone plans with unlimited data) arguably are not.

  17 John R. Pierce, letter, January 24, 1997. Pierce Collection, Huntington Library.

  18 See also Steven Johnson, “Innovation: It Isn’t a Matter of Left or Right,” New York Times, October 30, 2010.

  19 Fred Block and Matthew Keller, “Where Do Innovations Come From?” University of California–Davis, 2008. The authors looked at the provenance of the top 100 innovations (a list compiled annually by R&D Magazine) in the years 1970 to 2006. The authors noted that “the U.S. federal government’s role in fostering innovation—both in terms of organizational auspices and funding—across the U.S. economy has significantly expanded in the last several decades.” In 2006, “77 of the 88 U.S. entities that produced award-winning innovations were beneficiaries of federal funding.”

  20 F. B. Jewett, “Modern Research Organizations and the American Patent System” (New York: Bell Telephone Laboratories Incorporated, 1932).

  21 “Missed Calls: AT&T Inventions Fueled Tech Boom, and Its Own Fall,” Wall Street Journal, February 2, 2005.

  22 Janelia is part of the larger efforts of the Howard Hughes Medical Institute. A recent paper on the performance of HHMI researchers, as compared with grant recipients of the National Institutes of Health, concluded they had “higher levels of breakthrough innovation.” From Pierre Azoulay, Joshua S. Graff Zivin, and Gustavo Manso, “
Incentives and Creativity: Evidence from the Academic Life Sciences,” December 30, 2010.

  23 Steven Chu, statement in front of the U.S. Senate Committee on Appropriations, May 19, 2009.

  24 Jon Gertner, “Capitalism to the Rescue,” New York Times Magazine, October 3, 2008.

  25 New York Times, May 20, 1923; see also Lester Markel, letter to Frank B. Jewett, March 31, 1923. AT&T archives.

  26 John Pierce, “Can Science Do Without Sentiment?,” unpublished, March 12, 1959. Pierce Collection, Huntington Library.

  Sources

  The brunt of the work for this book depended upon my personal interviews with Bell Labs veterans; a review of oral histories of Bell Labs scientists and engineers; and my perusal of documents at the Alcatel-Lucent archives, the AT&T Corporate archives, the Library of Congress (for Claude Shannon and Harald Friis), the Huntington Library (for John Pierce), the Mudd Manuscript Library at Princeton University (for William Baker), and the Stanford University Archives (for Pierce and Bill Shockley). My research was centered around AT&T’s archives, where over the course of several years George Kupczak made available to me many hundreds of archival boxes and what were, ultimately, tens of thousands of document pages. Many of these papers were private or internal correspondence and official reports. But on several occasions I also had the good luck to come across an odd and valuable nugget, such as several hundred pages of sworn testimony made by Mervin Kelly in 1947 before California’s Public Utilities Commission, which served as an insightful guide to Kelly’s thinking and workplace responsibilities. At other times, George carted out for me old crossbar switches, relays, vacuum tubes, and silicon cells. Also, George gave me free rein to read through the complete, fifty-nine-year collection of the Bell Laboratories Record, the monthly magazine of Bell Labs, as well as his collection of the Bell System Technical Journal and WE (the in-house magazine of Western Electric).

  A large number of Bell Labs veterans, whose names are detailed on the pages that follow, gave me their time, usually several hours, and sometimes much more, so that I could interview them. Some of these veterans—Phil Anderson, Bill Fleckenstein, Mannfred Schroeder, Richard Frenkiel, and Irwin Dorros—also allowed me to read personal, unpublished memoirs that proved especially helpful. A few of the men I interviewed, including David Slepian, Ira Jacobs, Max Mathews, and Mannfred Schroeder, died during the researching of the book. I consider myself fortunate to have had the opportunity to speak with them before their passing and remain grateful for their time and consideration.