When Lucent Technologies is absorbed into France’s Alcatel later this year, the curtain will fall on the greatest technology enterprise in American history. Lucent is the successor to the old Western Electric Company that supplied equipment to the American Telephone & Telegraph monopoly. AT&T was broken up in 1984, and Lucent was spun off from the remnants of the parent company in 1996, along with the Bell Telephone Laboratories.
Bell Labs — as it was affectionately known for generations — was the center of innovation in the American telecommunications industry at a time when U.S. global leadership in that field was unrivaled. Calling it a “telephone” laboratory was bit like calling the American Museum of Natural History a “dinosaur” museum, because it was always much, much more. The fact that it will soon belong to a multinational company headquartered in Paris should make anyone who has ever wondered about the future of American civilization pause for a moment of reflection.
The history of Bell Labs reads like a chronicle of American achievement. In 1925, the year it was established, it demonstrated the world’s first fax machine. A year later, it devised the Vitaphone system that made talking pictures possible. A year after that, it tested the first television. In subsequent years, its scientists invented the transistor, the laser, and the communications satellite. In 1965, two Bell Labs scientists figured out that faint hiss they were picking up on their instruments was actually cosmic background radiation from the Big Bang that created the universe (they won the Nobel Prize).
In those days, Bell Labs’ home state of New Jersey was an industrial powerhouse. Companies like David Sarnoff’s Radio Corporation of America (RCA) dominated the skyline of manufacturing centers such as Camden and Newark, making them among the most affluent cities in America (Western Electric’s Kearny Works employed 18,000 people in the 1950’s). But times changed and innovation shifted to other places. RCA sold its consumer lines to a French company, and Lucent was devastated when the telecom boom went bust. Its stock fell from $84 per share in 1999 to $3 today. Employment at Bell Labs during the same years has fallen from 30,000 to 8,000.
As commercial opportunities dried up, Lucent turned increasingly to federal work. Its main military unit in Whippany does business with the National Security Agency, the signals directorate of the National Reconnaissance Office, and the Army’s Communications Electronic Command on tough problems like how to intercept weak signals from space. Those agencies aren’t eager to see Bell Labs get bought by a foreign company. And therein lies a dilemma for policymakers in a era of borderless economies.
Unlike during the Cold War, when key defense technologies had limited commercial uses, today’s cutting-edge military innovations hail from the heartland of global commerce. How do you prevent enemies from gaining access to the same technologies U.S. forces use when any jihadist can afford a cellphone, an internet connection, or encryption software? And with digital innovation rapidly shifting from places like Whippany to Shanghai and Bangalore, how can you assure you will even maintain parity in the technologies of tomorrow? If policymakers have an answer to this dilemma, they aren’t talking about it.
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