December 1, 2009

Reality Check: Yearning for Bell Labs

By Victor Blake

Congratulations are due to Nobel Laureates Charles Kao (for work in fibers and optical communications) and Willard Boyle and George Smith (both for work on the charge coupled device, or CCD). Following the announcements, however, a flurry of articles appeared praising the accomplishments of Bell Labs, where they and other distinguished scientists and engineers worked.

And that’s where a line needs to be drawn.

It’s tempting to look back at Bell Labs as embodying a golden era. But before nostalgia overtakes rational thought, let’s stop and be honest.

If you were a scientist or engineer in the United States at that time, where else could you have worked? There was academia or government. Those who wanted to work in industry had very few choices.

That so many talented engineers and scientists ended up at Bell Labs is no mystery. AT&T and its Bell Labs held an absolute monopoly over the entire telecom industry.

"It’s a monumental disconnect: Staffed with brilliant engineers, Bell Labs brought us what?"

AT&T’s monopoly was built on the exclusive right of ways (easements) ostensibly in the public interest. As the intellectual property sandbox of AT&T, Bell Labs used the financial gain of its parent to strengthen the physical control of the network and products with inventions turned into patents aimed at guaranteeing that monopoly in perpetuity.

Of course, AT&T as such didn’t last forever. Given that it was dismantled, let’s consider those assets.

For decades, promising subscriber technologies were swept under the rug, hidden in file cabinets and protected by patents in favor of margin-increasing technologies. And what were the great products of the time? "Touch tone" dialing and caller ID.

As the era of touch-tone slides away, it has become increasingly clear that Bell Labs’ greatest innovations were not used for the public interest.

It wasn’t until deregulation and the introduction of competition that innovation — including fiber optics and CCD-based digital cameras — surfaced for consumers and businesses alike. The same conditions that dethroned Bell Labs are those that brought a deluge of innovation: software-based switches from startup Northern Telecom; cordless phones from a variety of vendors; fax and data communications equipment from Hewlett-Packard, Xerox, and others.

The industry has yet to recover from that early misallocation of public resources. CLECs and MSOs alike still struggle to obtain reasonable access to customers. Bell Labs patents (owned by spin-offs, sold or otherwise distributed) continue to stifle innovation.

The Nobel committee fortunately recognizes the contributions of individuals. Let’s direct any nostalgia for Bell Labs away from the socialized, state-funded R&D monopoly that it was and toward a better lesson from history: the value of cooperation among its researchers.

In today’s richly competitive world, cooperation is difficult to develop, but possible. Collaboration now is far different from the closed-door, patent-crunching, margin-building structure of Bell Labs. It’s also hard to identify because it has no single address.

But a free, competitive and interconnected environment enables engineers to collaborate with colleagues next door and around the globe for the common goal of developing technologies that bring new and innovative products and services to our customers, economy and culture.

The Internet itself was built not because of, but despite AT&T and its descendants, including Bell Atlantic — now Verizon. It’s a monumental disconnect: Staffed with brilliant engineers, Bells Labs brought us what? The ability to "touch" (rather than dial) a telephone number and to identify an incoming call.

Does anyone doubt that the Internet has contributed more to the global economy than those telephone conveniences, and by quite a long shot?

Victor Blake is an independent consultant.