The Idea Factory: Bell Labs and the Great Age of American Innovation (49 page)

T
HE LARGE INHERITANCE
of Bell Labs was divided again in 1996. AT&T executives concluded that their company needed to be more tightly focused around the long-distance telephone business and a new cellular business. In short order, the company sold its struggling computer company. More drastically, it sliced off its huge telecom equipment division—what had essentially been Western Electric—into a new company called Lucent. In the course of this split, most of the Bell Labs staff went to Lucent, which retained the Bell Labs name for its research and development department. Yet a number of the Labs’ researchers, including many mathematicians, were whittled off from Murray Hill to go with AT&T. This group was relocated to a new AT&T facility, now known as the Shannon labs, named after Claude Shannon, in another part of New Jersey.
⁵

The old Murray Hill complex, meanwhile, became Lucent’s global headquarters. By a number of measures—patents and awards, for instance—the company still retained a first-rate industrial laboratory with a skilled staff. And from the start, the prospects for Lucent and Lucent’s Bell Labs were considered promising. The company would design and build the next generation of wireless and wireline equipment. But things went even better than expected, and Lucent’s first few years proved to be the kind of fairy tale that the business press and financial investors adore. As wireless phone services boomed, and as the Internet exploded in popularity, so, too, did the need for telecommunications equipment in the United States and abroad. A host of companies embarked on an extraordinary buildout of the country’s telecommunications
and data infrastructure; Lucent, in turn, began reaping enormous profits. Just two years after it split from AT&T, Lucent’s stock valuation—$98.5 billion—was higher than its onetime parent. The next few years became known variously as the telecom boom and the dotcom (a nickname for new web-based companies) boom. The assumption, as one financial columnist described it, was “that the explosive proliferation of dotcoms would send endlessly expanding amounts of data, voice and video streaming across larger and larger networks.”
⁶
At its peak, Lucent was valued at $270 billion. Bell Labs, in turn, enjoyed ample funding. It seemed like another golden age of communications research was on the wing.

Things fell apart quickly. By 2000, it was understood that the predicted demand for telecommunications switching and transmission equipment was a fantasy. To compound Lucent’s problems, it was soon discovered that the company’s profits had been inflated by a practice of helping outside companies finance purchases of its equipment. The subsequent fallout was devastating. Lucent’s revenue plunged. Its stock price, which had peaked at about $84 a share, fell below $2. The company slashed tens of thousands of jobs, including thousands within Bell Labs. Some researchers and engineers were cast off when the company, desperate to alleviate its losses, divided the Bell Labs’ inheritance into even more parts—to smaller companies that took the name Agere and Avaya, for instance. Others were unceremoniously laid off. In the New Jersey suburbs, workers found they were embarrassed to wear Lucent shirts or hats to the store. In previous years, as the company’s stock price climbed, they would receive slaps on the back. Now they were greeted with angry reprisals of “What happened?” or “I lost a lot of money.” In the end, the company reduced its workforce from a high of 150,000 to about 40,000. And in its omnibus efforts to cut costs and energy consumption, every other light inside the vast buildings at Murray Hill was turned off. The acres of lawns in front of the buildings were mowed less frequently. Meanwhile, the remaining employees—at the company whose engineers perfected the telephone—were asked to limit their calls at work.

Then things got worse. In 2002, a panel of experts concluded that
a prominent Bell Labs researcher, J. Hendrik Schon, had published a series of papers relying on fraudulent data. One of Schon’s claims was that he had created molecular-scale transistors. “I am convinced that they are real,” Schon wrote of his results, “although I could not prove this to the investigation committee.”
⁷
It was arguable that the scientific misconduct was Schon’s alone, and not an indictment of Bell Labs. But it was difficult to believe such an incident could have occurred years before. “What does the Schon scandal mean?” an interviewer from the
New York Times
asked a young physicist named Paul Ginsparg. “The demise of Bell Labs by becoming corporate,” Ginsparg replied.
⁸

L
UCENT’S EXECUTIVES PREDICTED
that their company, as well as the rest of the global telecom industry, would rebound. But the next few years were equally difficult. In 2005, it was believed a merger with the French telecommunications company Alcatel might save Lucent, and perhaps restore the luster of Bell Labs, which was now about a third of its former size. The resulting company was named Alcatel-Lucent. And to some extent, in a volatile market for telecommunications equipment, an era of stability resumed. A bright, capable engineer named Jeong Kim was appointed Bell Labs president. Kim decided that to save Bell Labs he would need to change its structure, vision, and strategy. As he saw it, the Labs had to focus single-mindedly on how its innovations—products that were geared both for the near and medium term—could help Lucent’s bottom line. Kim, the
Wall Street Journal
noted, “was perhaps the laboratory’s best hope of maintaining its relevance.”
⁹
Kim, however, didn’t want Bell Labs to be a citadel of science and scholarship. He wanted it to be a hotbed of entrepreneurial thinking. He did not downplay the challenges of reviving the laboratory. “I did not take this job because it was easy,” he said of his work to reinvent the Labs. “I took this job because it was difficult.”

The Bell Labs Jeong Kim was running—the Bell Labs Kim felt he needed to run in the face of the telecom market’s fierce competition—was barely recognizable as the shop of Kelly, Fisk, and Baker. But at that
point these changes were almost certainly necessary. The scientific press nevertheless mourned the pragmatic turn the Labs had taken. When
Nature
, the esteemed British science magazine, discovered that only four researchers were now working in basic physics at the Labs, it ran an article entitled “Bell Labs Bottoms Out.”
¹⁰
Meanwhile, grown men who had worked at Bell Labs during its golden age would sometimes confess to driving by the Murray Hill complex and experiencing an emotion close to bereavement. A few would weep. The Murray Hill parking lot, where scientists and engineers once had to fight to get a spot, was now half full on some days.

In 2006, Bell Labs’ other main campus—the Black Box at Holmdel, Eero Saarinen’s architectural tribute to Bell Labs’ innovative capabilities—was shut down. What remained of the staff there, originally about fifty-five hundred employees, but now far fewer, were either brought to Murray Hill, reassigned elsewhere, or laid off. Alcatel-Lucent put the 1.9-million-square-foot building up for sale. At first a real estate developer expressed interest in the property, but a deal soon collapsed. Perhaps it could serve another company as an office center, some local officials speculated, or perhaps it could be transformed into a public park. The 472-acre site, once the expansive spread of mown grass where scientists experimented on antennas and microwave transmission, resumed its lonesome character. Except for a roaming security guard, no one remained on the premises. On the long driveway leading to the immense and empty glass building, weeds began poking through the tarmac. The property stayed on the market for months, and then years. There were no buyers.

I
t seems likely that the Black Box at Holmdel will ultimately disappear. The building’s almost two million square feet of space were designed for workers of a bygone age who were pursuing a mission of universal connectivity that now seems largely completed. Still, looking around anyplace in America on any given day, one cannot miss enduring aspects of the empire designed by Kelly and his colleagues. There are many physical reminders—the wooden phone poles and wires, for starters, that support our current phone and data networks and were made almost absurdly durable thanks to years of research at Bell Labs. The local switching exchanges in most American towns, those sturdy, windowless buildings, also still stand, though switching has become so efficient and miniaturized through the use of integrated circuits that the buildings are mostly empty, and chronically dark. The clicking racks of crossbar switches, and the staffs of engineers needed to attend to the machines, are gone. As the engineering writer Brian Hayes points out, “a machine the size of a pizza box can handle a town’s telephone system.”
¹
In the event of a problem, a computer switch can alert someone at network headquarters to come take a look in person.

Bell Labs’ original building on West Street in Manhattan—the office where Kelly, Shockley, Pierce, Shannon, Fisk, and Baker first reported to
work when they began their careers—was sold long ago. Its interior was cut up and converted to apartments. Other pieces of the phone company’s broken empire, however, have been kept in service by Alcatel-Lucent, Bell Labs’ current parent company. About forty-five miles southwest of the city, Crawford Hill, the flat-topped ridge where John Pierce and Bill Jakes tracked the progress of the Echo balloon during summer nights in 1960, is sometimes used for wireless research. Atop the hill, light breezes blow in from the Atlantic, and the old horn antenna, though rusted now, remains intact. A plaque nearby designates the site as a national historic landmark. And at the bottom of the hill, there is the small three-story Crawford Hill lab, built in the early 1960s to house a corps of researchers while the Black Box was under construction a few miles away. The scientists and engineers there, about a hundred in all, continue to work on optical fibers and lightwave communications.
²

At Murray Hill, the sprawling complex twenty-five miles west of New York that Kelly imagined as an escape from the noise, dirt, and vibrations of the city, the buildings are largely unchanged from the 1980s. The computer labs stay busy. The same can’t be said for the physical science and electronics laboratories. On workdays many of the labs are locked and dark. Walking down those extraordinarily long hallways can be a haunting experience. On the fourth floor of Murray Hill’s old Building 1, a small plate affixed to a wall marks the approximate spot where the transistor was invented. Downstairs, in the lobby, where an exhibit marks the historic sweep of Bell Labs’ innovations, the original transistor is on display, protected by a glass case. Not far away is a bronze bust of Claude Shannon, rubbing his chin and looking slightly amused.

According to the U.S. Space Objects Registry, as of late 2010, Telstar—the first active satellite—is no longer functional. Yet it still orbits the earth. An exquisite machine requiring a year of nonstop work by hundreds of engineers, it is now a rotating piece of space junk.

B
ELL
L
ABS’
most durable contributions were not things that could be touched or seen. Many of the ideas and innovations that came out of the
Labs have been subsumed into a global electronic network far larger and more wondrous than existed when Shannon and Pierce agreed, in the late 1940s, that the Bell System was the most complex machine ever created. At the same time, those innovations have been improved upon to the point that the original leap that made them possible has been mostly forgotten. To use the most obvious example, the transistor, countless engineers around the world have taken the original idea and made it better and better, as well as smaller and smaller. For instance, a recent Intel computer processor chip not much larger than a postage stamp contains two billion transistors. (Intel, moreover, manufactures about 10 billion transistors every second.)
³
Lasers and optical fibers and CCD chips—the charge-coupled devices, invented at Bell Labs, that allow for digital photography—have followed a similarly astounding trajectory. Each second, the newest lasers can send nearly unimaginable quantities of information through a single strand of glass fiber. “The commercially available rates are eight terabits per second per fiber,” explains Herwig Kogelnik, the laser scientist who began his career under Rudi Kompfner in 1960. To put that number into context, a terabit contains one trillion bits, and a bit, as Shannon formulated long ago, is a unit of information represented by a 1 or 0. A fiber strand can therefore carry millions of voice channels or thousands of digital TV channels. “It’s just enormous,” Kogelnik adds. “Every ten years it increases by a factor of 100.” He points out, too, that some researchers have created systems that can transmit 100 terabits per second. His point is that the future capacity of our networks, now being worked out by his younger colleagues, will dwarf what we have today.

Finding an aspect of modern life that doesn’t incorporate some strand of Bell Labs’ DNA would be difficult. The transistors, lasers, quality assurance methods, and information technologies have been incorporated into computers, communications, medical surgery tools, factory productivity methods, digital photography, defense weaponry, and a list of industries and devices and processes almost too long to name. Scores of Bell Labs veterans have meanwhile taken jobs in technology companies such as Google and Microsoft; even more have gone into academia, following
Shannon’s and Shockley’s example, and passed along their ideas to the next generation.

Many information-age advances, a large percentage of which trace back to Bell Labs, are less clearly good news. The National Security Agency—Bill Baker’s old stomping ground, which continues to monitor the transmission of information around the globe—recently revealed that every day it intercepts and stores two billion phone calls, email messages, and other data transmissions.
⁴
Therein lies evidence of how much information now moves around the globe. Therein also lies evidence of how the rapid, easy, and cheap exchange of information exposes individuals to intrusions of privacy while also exposing societies to vulnerabilities that could be exploited by hackers and cyberterrorists. And still, these concerns seem only one aspect of a much larger question: Has access to so much information not only expanded our lives but contracted them? The bustling town square in Gallatin, Missouri, where a hundred years ago Mervin Kelly worked in his father’s hardware store and confronted the counterpoint between the present and the future, is now an assemblage of empty storefronts. The hardware store and old telephone exchange is now a vacant building, with a few telltale hanks of telephone wire dangling from a dilapidated corner mount. There are a variety of reasons for the decline of small-town America. But when all kinds of communications and entertainment are delivered to your home, there are fewer and fewer reasons to go into town and exchange greetings in person.