Scare tactics

Jan. 1, 2003

The fiber industry's precarious state has prompted private consideration of a governmental role in financing telecommunications infrastructure in the United States. Last September, Corning sponsored a study called "Broadband Stimulation in France, Ireland, and Sweden," prepared by Cullen International, which said "the common theme across these three countries is that public authorities have invested in telecommunications projects where there were demonstrated market failures." The study reviewed the projects but did not advocate government investment; Cullen found nothing wrong with it, either.

Unfortunately, neither the report nor the scientists who developed fiber optics nor the skilled management and labor who produce it (or used to) have captured the attention of the U.S. government. Apparently, a hobbled industry has to have threat-potential aimed at the United States before its government takes remedial action. Consider the Initiatives for Proliferation Prevention Program (IPPP), an employment program funded by the U.S. Department of Energy. The IPPP is "designed to enhance U.S. national security and nonproliferation objectives by cooperatively engaging former Soviet weapons scientists, engineers, and technicians...involved with weapons of mass destruction" in projects that identify and create non-military commercial opportunities, according to View Systems, which touts itself as "a world leader in concealed weapons detection and surveillance technology."

The IPPP is one government program that won't be eliminated by the Bush administration or the new Congress. Maybe the threat-potential game should be exploited by the fiber industry. Remember the National Defense Highway System? It was funded mostly by the federal government and built in the 1950s for rapid movement of troops and material from coast to coast and north to south to repel invaders. Today, we all know this defense project as the Interstate Highway System, where military vehicles are seldom seen.

The defense highway system is an example of how broad-based civilian programs can be publicly funded in times of national fear and anxiety: Put it in olive-drab, then put it in law. The benefits of the defense highway charade were enormous for automakers, steel-makers, labor, and energy production. It is time for another charade. Someone needs to sell the administration on a "Fiber-to-the-Home National Defense Communication Highway," which just might be a way to dress up plain old FTTH. But this ruse is unlikely to succeed with a Congress steeped in an ideology of "getting the government out of the market"—unless they can be motivated by a lurking threat-potential. Creative scare tactics may wake Congress from its ideological torpor.

Skilled management and labor are leaving the American fiber business forever, unless the federal government soon adopts a national telecom policy that alleviates unemployment in the optics industry and steps in to assure that the fiber industry's pension plans are fully funded. Without skilled management and labor in America's fiber industry, most fiber production will migrate abroad to economies not especially market-oriented and nations not afraid to replace their installed telecom base. Huge portions of fiber-optic production and its required optoelectronics will move to China and Taiwan when they peacefully settle their ideological differences, knowing they can rely on optics to develop their economies. Technological leadership and innovation in optics will transfer to Asia in general. Free trade with Asia will advance Asian-based optical computing and communications, which by 2030 will displace much of America's electronics industry.

This is not a ruse. In Wealth and Democracy, author Kevin Phillips describes "one of the biggest, most rapid industrial shifts in history" as the time when Britain's chemical and electric industries shriveled in a 20-year period in the 19th century as Germany and America improved their own industries. He examines the economic decline of Britain, then looks to America's future and concludes: "[T]he Asian-based threat to the...American...economic and technological obvious....Some scholar may not document until 2025...the broader perspective, far-sighted planning, and unexpected twenty-first century success stories dug from the ministry and corporate files in Bangalore...Singapore...Taipei, Tokyo...Beijing."

Phillips left out Seoul, South Korea, which has a national and aggressive "broadband" plan. In November, the Ministry of Information held a much publicized celebration of the nation's digital economy. The Korea Herald, in its story "Korea boasts 10 mil. broadband subscribers," judged the Ministry's performance a "hyped ceremony" but noted the plans to raise Korea's average Internet speed from 3 to 20 Mbits/sec, perhaps a step along a path to optical delivery because Korea certainly has the technical ability in optics.

In June 2001, Korea's Advanced Institute of Science and Technology (KAIST) was granted U.S. patent 6,253,004, "Optical interconnection structure for enlarging alignment tolerance." KAIST explains its accomplishment: "[T]he alignment tolerance in optical connection between semiconductor lasers and singlemode optical fibers was less than 1 mm....The present invention fundamentally solves this optical alignment problem by increasing the alignment tolerance at or over 10 mm...[and] greatly increases mass productivity by providing a simple fabrication method, a low cost for components, and a reduced assembly cost."

Mass production of inexpensive optical assemblies is nearer than ever before, but the United States may not be setting the standard—a trend already displayed by China's Ministry of Information. It made headlines in late October by supporting a "made in China" wireless communications standard that threatens to displace or drastically reduce the use of so-called code-division multiple access products licensed and founded by San Diego-based Qualcomm, whose stock promptly declined 4% upon the news. With China's economy getting stronger every year, other industries will feel its sway. Disarmament in Iraq and cheap oil will not protect America from the power of a growing and peaceful Asian economy that fully accepts and uses free trade—but having a healthy American fiber optics industry would.

Stephen N. Brown writes on public policy in telecommunications. He can be reached by e-mail at [email protected] or telephone: 615-399-1239.