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Bell Labs going to France ?

March 24th, 2006

This NYT story reports that Alcatel is negotiating to buy Lucent, the communications equipment maker spun off by AT&T a few years back. It’s not mentioned until the end of the article, and then only in passing, that the deal includes “the research and development unit Bell Laboratories, an intellectual powerhouse”.

That’s putting it mildly, at least in historical terms. Eleven researchers have shared six Nobel Prizes for work done while they were at Bell Labs, among many other awards. As well as the transistor, the photovoltaic cell , the LED, CCD and much more, Bell Labs created both Unix and C. It even had its own economics journal (the Bell Journal, which later became the Rand Journal). It was truly a unique institution.

Of course, all this was cut back drastically with deregulation and the breakup of the old AT&T monopoly, and even more so after the Lucent spinoff. Still, the passing of Bell Labs out of US ownership is worth recording. It remains to be seen whether Alcatel will follow the logic of the market and kill Bell Labs altogether, or make a quixotic attempt at reviving some of the glories of the past.

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  1. March 24th, 2006 at 18:50 | #1

    Its difficult to tell if you are merely lamenting the ‘passing’ of a formerly great institution or actually suggesting it should be revived. I take it, from your use of “quixotic” that it is the former.
    If so, I agree. The huge profits of the US phone system under Bell ownership was such that they could afford to take extremely long term punts on technology. Unfortunately, they found that they did not make much money out of any of it – most of the gains were made by others. Unix and C, for example, they initially gave away.
    A great institution, a failed business model. This sort of primary research are what well endowed universities should be for.

  2. Uncle Milton
    March 24th, 2006 at 19:18 | #2

    Bell Labs also used to have a superb economics department, the equal of many top universities. The Bell Journal was one of the best. The exquisite irony is that the economists there in the late 70s and early 80s were at the forefront of research into deregulation of previously regulated natural monopolies, and decision theory.

    While this wasn’t the primary cause of the break up of AT&T, the intellectual ferment created by the Bell Lab economists certainly contributed to the climate in which it was thought that breaking up the phone company was a good idea.

    After it happened, Bell Labs economics was never the same again. They were literally the architects of their own demise.

  3. March 24th, 2006 at 19:58 | #3

    Bell Labs also has/had (not too sure how much has survived the cost cutting) an excellent quantum computing group. Among others, Peter Shor developed his famous factoring algorithm while working for Bell Labs.

  4. March 24th, 2006 at 22:20 | #4

    I used to work near the Lucent office in New Jersey. There was a great little sandwich shop and park opposite their offices which I used to frequent. The park had a baseball diamond. Every day there would be about ten Indians, Pakistanis, Bangladeshis etc playing cricket in the baseball diamond. I assume they were Lucent engineers getting some lunchtime fresh air.

  5. avaroo
    March 25th, 2006 at 11:11 | #5

    Can’t live on past glory. Today’s business model is “What have you done for me lately?” I find it tough to lament a failed business model going somewhere else. But it does seem odd that anyone else would want a failed business model. Just goes to show, there’s a buyer somewhere for just about anything.

  6. jquiggin
    March 25th, 2006 at 20:43 | #6

    Are you talking about Bell Labs, Lucent or the US in general, avaroo?

  7. avaroo
    March 26th, 2006 at 12:51 | #7

    In business everywhere, it’s pretty much “what have you done for me lately?” not just in the US. But hey, if someone wants to buy what was basically as someone above said, a failed business model twenty years AFTER it was innovative, who are we to stop them? Sell away.

  8. avaroo
    March 26th, 2006 at 13:12 | #8

    Slight correction to my post above……”In business everywhere (or in all places where being successful matters), it’s pretty much “what have you done for me lately?”

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