In 1970, a team of scientists at Bell Laboratories successfully tested a tiny laser the size of a grain of sand that made possible a new era of "optical" communications.
Although the device was primitive by today's standards, it was the predecessor of lasers that can be turned on and off tens of millions of times a second to transmit telephone conversations, messages and other information in the form of light waves pulsing through extremely pure glass fiber cable.
"It was the first time I ever saw champagne brought into Bell Laboratories," recalled Bell physicist Morton Panish, one of two scientists credited with the invention.
Now, 13 years later, the U.S. companies that make lasers have less to celebrate.
When Bell Telephone began looking around in 1980 for lasers to go with the first light-wave cable under the Atlantic Ocean, to be installed later in this decade, it turned to Hitachi of Japan.
"Hitachi appeared to have potentially the most reliable laser in the world," Jack Sipress, director of Bell's undersea systems laboratory, said. "We have had no reason to doubt the wisdom of that."
The story of how a Japanese company got a beat on the Bell System's manufacturing subsidiary, Western Electric, and on RCA, Exxon, Hewlett-Packard and Xerox--all of which had access to Bell's patents and were working on lasers in the 1970s--raises questions about U.S. industry's ability to take advantage of technologies being developed in its own back yard.
"The United States is an underdeveloped country when it comes to getting useful, proven technologies transferred to business and industry," said John A. Alic, who has specialized in studying U.S. industrial policy at Congress' Office of Technology Assessment.
The reasons for this vary from industry to industry. Computer-chip companies slowed product development in the mid-1970s due to sliding demand during recession, and some of the country's innovative genetic engineering companies are having trouble raising capital. But a more general problem appears to be the shortsightedness of large, established U.S. companies.
"The fact is the U.S. has tire marks all over its back when it comes to getting the products out," a Bell scientist said. "When you come right down to it, nobody sat down as early as Hitachi did and said, 'We're going to do this.' "
Japanese officials said there is nothing magical about their success.
"American industry has the frontier spirit, and big Japanese enterprises don't, so we think we should guide Japanese firms to develop the technology," said a representative of the Ministry of International Trade and Industry (MITI) in Tokyo.
In the early 1970s, MITI joined Japan's public phone company, Nippon Telephone and Telegraph, and several private companies to begin experimental research on fibers, lasers, video cameras and other optical devices. Most of the money was supplied by private industry, with an eye to winning at least half of a worldwide market in optical communications equipment projected at $8 billion by 1990.
The effort was aided by Japanese scientists strategically placed in U.S. research laboratories where work on lasers and optical fibers was proceeding, and by U.S. patents and processes for which Japan has paid little.
The economic stakes in the optical communications race are staggering in size, although other high-technology communications systems such as microwave and satellite also hold promise.
But microwave use congests air-wave frequencies and telephone communications by satellite can suffer from distortion because of the distances involved.
These restrictions do not apply to optical communications. Thus, the world is on the verge of a major change that will continue well past the year 2000 as optical systems carry increasingly larger amounts of information over smaller, cheaper lines than the current electromechanical systems. The first such line has just been installed between Washington and New York.
A half-inch-thick glass fiber cable can carry 46,368 simultaneous conversations, the same amount as a four-inch copper coaxial cable. Installation of optical cables should be considerably easier in overcrowded urban systems.
In addition to long-distance communications, lasers and optical recorders capable of storing tens of millions of bits of information will become standard in offices, computers, video-disc equipment and broadcasting. Bell Labs, Soviet Institute Pioneer Lasers
Optical communications also will be useful to the military services because there are no effective methods of intercepting signals transmitted as light waves.
In a light-wave system, a voice is converted into an electrical impulse, as it is in a standard telephone system. This signal is scanned by a digital encoder at a central office and converted into a stream of "ons" and "offs."
The laser light source is then activated and transmits "ons" as a pulse of light and "offs" as the absence of one. Booster stations amplify the light signal every few miles.
Undisputed pioneers in developing laser-light sources for such systems were Bell Laboratories and the Ioffe Institute in Leningrad. But until 1970, researchers were plagued by several problems.
In one, lasers became overheated as beam-generating current passed through them and could only function continuously in super-cold liquid nitrogen, which made them unsuitable for commercial telephone systems. In another, the intense light could not be confined and tended to leak.
Bell's solution brought together the worlds of telecommunications and microelectronics. It involved using gallium aluminum arsenide to make a laser similar to a computer chip. This laser required very little power and could run at room temperature without overheating.
Details of the experiment were published in mid-1970 in the Applied Physics Letter of the American Physical Society. Bell officials recalled that the article, by Bell tradition, revealed somewhat more than other companies tend to publish about their technical achievements.
Because of its position as research arm of American Telephone & Telegraph (AT&T), a government-approved monopoly, Bell in 1956 signed a consent decree agreeing to make its patents available to other companies. Partly because of that agreement, openness became something of a tradition at Bell Laboratories.
The publication, which appeared at almost the same time that Soviet physicist Zhores Alferov of the Ioffe Institute was publishing his results, triggered widespread interest in the future of lasers as a communications medium. It also tied in with efforts under way at Bell and Corning Glass Works to develop a process for making glass fibers to carry the laser light signals.
"Once we and the Soviets had published, everybody filed in to do research," inventor Morton Panish recalled.
In retrospect, however, representatives of Bell and other companies acknowledged that the record of American companies in following up on this breakthrough was less than scintillating.
One U.S. company that saw early commercial promise in the new technology was Hewlett-Packard. In the mid-1970s it hired several people from Bell Laboratory's laser division and put them to work with a laboratory staff at Palo Alto, Calif.
One of them, C.J. Hwang, has mixed memories of the Hewlett-Packard work. The company, he said, "developed a whole laser program from scratch. But when the time came to go into production, they went back and forth and finally decided not to make the product because they couldn't generate positive cash flow within a year."
Hwang left soon after that to start his own company, General Optronics, which sells lasers to International Telephone & Telegraph (ITT), General Telephone & Electronics Corp. (GTE), Siemens in West Germany and SAT in France. General Optronics lasers are being used in France's Biarritz project, which involves use of fiber-optics communications to transmit television, telephone and picture-phone services to 1,500 houses.
Hewlett-Packard spokesman Robert Bouzon said holding off production was a "market decision." At the time, he said, it did not appear that there would be a profitable market for the lasers until 1985 to 1987.
"Why produce a product without a market? If you can get the state-of-the-art product from Japan, you get it," he said. Hewlett-Packard, he said, is continuing research on laser products.
To some, Hewlett-Packard's hesitation is reminiscent of developments in the U.S. consumer electronics industry in the 1960s and 1970s. An analysis of that period by William J. Abernathy and Richard S. Rosenbloom of the Harvard University Business School concluded that U.S. and Japanese managements took a very different approach to marketing, which had much to do with the final, disappointing outcome for the United States.
"American managers tend to rely on market research and 'objective' analysis to identify latent market opportunities, whereas Japanese firms like Sony took risks on novel products and set out to develop the market," they wrote.
In 1977, Exxon attempted an ill-fated foray into the laser world.
Through its venture capital arm, Exxon Enterprises, it bought a small Elmsford, N.Y., firm called Optical Information Systems (OIS) and began attracting a wide range of talent. Physicists were hired from Bell and RCA, and even a Soviet emigre physicist joined the project.
But within 24 months, Exxon was trying to sell the company, and many of the top scientists drawn to it were drifting away.
Exxon Enterprises spokesman Darcie Bundy said that although OIS was promising Exxon Enterprises was "sharpening its focus on certain other major companies, and OIS did not have the degree of necessary interdependency" with those companies.
Bundy did not say, however, why reaching that conclusion took Exxon almost two years, during which a substantial research effort had been launched.
Critics of Exxon's role have said privately that such in-and-out plunges by industrial giants is a waste of resources that hardly strengthens American economic competitiveness.
In December, 1981, Exxon finally found a buyer for its unwanted acquisition: the U.S. subsidiary of Japan's Mitsubishi Chemical Corp., which took a very different view of OIS's potential.
According to James M. Campanozzi, the reconstituted OIS's vice president for marketing, the Japanese company believes that lasers will have widely varied applications in office information systems, recording and broadcasting, as well as communications.
While Exxon had stressed research, he said, Mitsubishi "takes a more commercial view. We want to move into the systems area . . . into product lines for video, voice and data communication."
At RCA, early work on lasers focused on military rather than commercial applications. RCA's scientists were busy developing lasers that could pick out military targets and function as fuses in missiles.
Such work has given RCA a potential niche in President Reagan's planned new "Star Wars" system of electronic and laser anti-ballistic missile shields.
This emphasis is defended by Michael Ettenberg, head of RCA's optoelectronic devices and systems. "Military contracts kept us alive," he said. "There was not a significant commercial market for 15 years, and most business until the last couple of years was military in nature."
Asked why the Japanese had not been hindered by the same lack of a commercial market, Ettenberg put part of the blame on the U.S. recession in the late 1970s, and added: "The U.S. doesn't invest in the future as much as the Japanese."
RCA's history at least raises questions about the heavy military emphasis in much U.S. research and development. Robert Reich of Harvard University's Kennedy School of Government acknowledges that the Pentagon has stimulated research activities but "not always in the direction of commercial success."
U.S. experts also acknowledge that U.S. companies had reason to be skittish. For one thing, producing lasers proved to be extremely complex and costly. Even today, one of the tiny light sources costs $2,000 or more.
Also, rapid advances in processes for producing pure glass fiber cables to transmit the laser light kept changing requirements for the lasers late in the 1970s. While lasers producing light-wave lengths of 0.8 microns were in favor in the early stages of fiber-optical cable development, wave lengths of 1.3 microns appeared to work better with the purer fibers developed in the late 1970s. A micron is 1 millionth of a meter in length.
Yet those obstacles did not keep Hitachi, again with help from Japanese scientists who had worked at Bell, from having a 1.3-micron laser ready by 1980.
Within a year after the initial Bell paper was published, according to Bell physicist Panish, "the Japanese were reproducing our results and in several years were doing their own research."
One asset was the network of Japanese scientists with first-hand experience in the U.S. research effort. Izuo Hayashi, who heads a government-industry effort in optical communications in Japan, was working at Bell when the first successful laser was assembled in 1970 and is credited, along with Panish, as one of its co-inventors.
One of Hayashi's mentors in Japan was another Bell alumnus, Michiyuki Uenohara, now a managing director of Nippon Electric. The roster of light-wave specialists at Japanese companies is studded with scientists who studied or worked at U.S. research facilities.
However, a Hitachi official, who asked not to be identified, credited the company's success primarily to the "free flow of information" among the 2,000 engineers at the firm's research laboratory on the outskirts of Tokyo.
"Anyone who wants to consult colleagues or form a discussion group on a new idea can immediately pinpoint people and exchange information. This contrasts with the United States where engineers tend to feel technologies they've developed are their own personal property and are likely to keep blueprints locked away . . . ," he said. Hitachi Gets Credit for Laser Initiative
"At Hitachi, these things are not the assets of each individual or each team but of the whole company . . . . The researchers who were working on this communications laser field felt keenly that the product was something that had to be developed," he said.
Laser experts give Hitachi full credit for initiative.
"The Japanese have taken the open technology from the United States and have done a rapid, government-funded development to the point where they are in production and we are having a hell of a time keeping up," said Kenneth Nill, vice president of Lasertron, a small Massachusetts laser company founded in 1981 by three scientists from Lincoln Laboratories. "They are fine-tuning, producing faster and more reliable stuff."
In the United States "there is always a missing connection between the laboratory and production," General Optronics President Hwang said. "It's basically an organizational problem, not that we can't compete with the Japanese."
Bell officials respond that the United States is still far from being out of the laser race. Western Electric produces the 0.8-micron lasers used in the first light-wave telephone link between Washington and New York City and it is gearing up to turn out 1.3-micron devices at a plant in Reading, Pa.
Several weeks ago, Bell also announced the successful test of a "secret weapon" in the communications laser battle. Called a "cleved coupled cavity (C-cubed) laser," it has transmitted 420 million bits of information over an 80-mile-long fiber-optic line without error.
"It's an extremely significant development," Bell patent attorney George Indig said. "We may have made the breakthrough. It appears to be the most practical way to transmit light waves error-free."
The "C-cubed" machine is a pair of tiny lasers that operate in tandem on a chip to emit a light wave on a single frequency. The advantage of the single frequency is that receivers do not have to unscramble various light-wave signals emitted by different parts of the light spectrum, as they do in the case of light from other existing lasers.
"We're very excited," Indig said.
However, Bell officials note that the development essentially is a conceptual one that others can follow. The manufacturing technology is not radically different from the one in which Hitachi now seems to lead.
"It doesn't mean that the Japanese won't exploit this idea and turn out these lasers before we do," Indig said.
NEXT: Secrets and the aircraft industry.iber and shines at center. Laser bursts can be used to transmit telephone conversations on the fiber. Picture 2, Hand holds cable that carries voice, television and data light signals. Protected by steel wires, the cable contains 12 ribbons, each of which holds 12 fibers. Bell Laboratories Photos. Chart, PHONING HOME IN THE OPTICAL ERA. By Bethann Thornburg for The Washington Post