[GUFSC] Bell Labs struggles to guard its legacy

[Rafael R Obelheiro]

[http://www.philly.com/mld/philly/business/4637002.htm]

Bell Labs struggles to guard its legacy
By Brian Bergstein
Associated Press

MURRAY HILL, N.J. - To understand the proud past and uncertain future
of Bell Laboratories, step inside its little museum in the brown-brick
lobby of Lucent Technologies Inc. headquarters, just past the earnest
statue of Alexander Graham Bell with his prodigious sideburns.

Futuristic-sounding organ chords play softly above plaques
commemorating Bell Labs' six Nobel Prizes, a counter showing 27,300
patents and displays of major inventions from the lab's 77-year
history, including the laser and the transistor.

On one shelf sits a recent innovation: a tiny router that whizzes data
over fiber-optic networks by using 256 mirrors to steer beams of
light.

The Lambda optical router earned the exhibit space because, for Bell
Labs, it was an impressive achievement. But it has yet to do much for
Lucent.

Bell Labs' parent has shelved the router because telecommunications
companies, pressed for cash, are not buying much new top-of-the-line
equipment these days. Therein lies the painful fact of life at Bell
Labs.

Repeatedly squeezed by corporate spin-offs, layoffs and Lucent's
financial peril, Bell Labs is mounting a mighty effort to invent
future technologies for Lucent to sell.

But like the Lambda router, all of Bell Labs' talents - especially its
impressively varied research specialties, such as computer
programming, chemistry and physics - might not be enough to save
Lucent.

After losing $11.9 billion and cutting 30,000 jobs in fiscal 2002,
Lucent is betting that the telecom industry will begin to revive in
2003. Though Lucent says it has plenty of cash, some analysts say
bankruptcy is possible.

Such survival worries are relatively new at Bell Labs, where
scientists confirmed the Big Bang, invented key wireless technologies,
and developed computer programming languages.

For most of its life, Bell Labs was the research arm of the national
telephone monopoly. Financed by part of every American's monthly
bills, its scientists had remarkable freedom.

"If Bell Labs is going to resume its status as a national treasure, it
cannot be part of a competitive company," said Narain Gehani, a former
computer researcher whose memoir, Bell Labs: Life in the Crown Jewel,
is due out this month.

If Bell Labs has to keep relying on a corporation's spending ability,
Gehani said, "it will be just another industrial research lab."

Any suggestion, however, that Bell Labs' stature could be sinking
makes its researchers cringe.

They say that despite all its challenges - including the recent
revelation that superstar molecular-electronics researcher J. Hendrik
Schon had fabricated experimental data - Bell Labs still does
important research aimed far beyond Lucent's present woes.

"Every time something happens in the industry, as is now, we get this
resurgence of 'Bell Labs is dead,' " said Cherry Murray, senior vice
president for physical science research. "We've always managed to come
out of it stronger. Bell Labs is not dead. It is adaptable."

Current projects include work on nanotechnology; flexible display
screens; ways to radically boost the performance of communications
networks; software that finds flaws in complex systems; and studies of
how patterns in nature could enhance designs in technology.

While Lucent's budget crunch has reduced the quantity of Bell Labs'
projects, researchers say quality is unaffected, largely because they
have maintained their prized interdisciplinary mix.

"We can go down the hall and find an expert in just about any area of
physical sciences or many of the engineering disciplines and we can
have a discussion," said Elsa Reichmanis, director of materials
research. "Everybody's door is open and everyone is willing to get
involved in a large variety of different programs."

Many scientists say Lucent's dire straits have given Bell Labs needed
focus.  Researchers now have "relationship managers" or "champions"
who coordinate projects with Lucent business units. The scientists
also have increased contacts with Lucent customers.

"Instead of working on atomic physics because it's beautiful, we're
working on atomic physics because it could be valuable for the future
of communications," Murray said.

Some observers believe Bell Labs' optimism is warranted.

"There's a certain class of things that great industrial research labs
can do that a) the nation needs or b) Lucent needs and c) the
universities really cannot do, nor can the venture companies," said
John Seely Brown, chief scientist of Xerox Corp. and former head of
its Palo Alto Research Center in California.

"There's an interesting sweet spot in there. This kind of research is
not all that expensive, and surprisingly small groups of people can do
it."

Lucent hopes he is right.

Bell Labs has been repeatedly pruned, beginning with the breakup of
AT&T in 1984 and continuing with the spin-off of its equipment
division into Lucent in 1996. Still, as recently as 1999, Bell Labs
had 30,000 employees, 1,000 in "core" long-term research.

Since then, Lucent has spun off divisions into Avaya Inc. and
Allentown, Pa.-based Agere Systems Inc. and sold an optical-fiber
business.  Company-wide layoffs also struck Bell Labs, and a
short-lived Silicon Valley facility closed last year. Now Bell Labs
has 10,000 employees, 500 in core research.

It still ranks among the biggest corporate research organizations, but
all those cuts mean "the day when they were head and shoulders above
the rest is probably gone," said Robert Buderi, author of Engines of
Tomorrow, a book about corporate research.

"It's not like there's nothing special there. They have some of the
world's great researchers," Buderi added. "But they're now playing the
same game as everyone else."

Lucent cut research and development spending 34 percent in fiscal
2002, to $2.3 billion. Glass-half-full types note that was 19 percent
of revenue, up from 16 percent in 2001. The percentage of revenue
devoted to Bell Labs' core research has remained relatively constant,
about 1 percent.

Bell Labs also is trying to supplement its Lucent funding by doing
more research for the military and forming partnerships with other
companies.

"It's important to recognize that Bell Labs remains an innovation
engine - we are continuing to support it," said Lucent's chief
executive officer, Patricia Russo. "A number of the things we are
benefiting from today were created back 10 years ago."

With everything that has happened, Bell Labs is "a little beaten up
around the head and neck," said David Bishop, who heads optical
research. But he quickly added that the organization seemed more
determined than ever.

"You don't let someone come in your home and steal all your silver
without doing something about it. We're all fighting back," he said.
"We don't want this place to go away. We'd all miss it."