July 29, 1990

FROM THE most unexpected sources comes inspiration. At last month’s Digital World conference in Beverly Hills, Bill Smith of Demand Video Systems in Victoria, British Columbia, said almost in passing that “Silicon Valley is an obvious first site for a fiber broadband network, as part of a major national effort,” and that he wanted to help make it happen.

Translated from technospeak, a “fiber broadband network” refers to an upgraded telephone network that replaces the dual-strand copper wire physically connecting your home or business telephone with the phone company’s central office. Fiber optic cables use light to transmit data at 622 million bits per second or faster, as compared to the snail’s pace of today’s copper wire, 64 thousand bits per second.

Smith is a data communications expert who’s known in Canada as a successful entrepreneur. Right now he’s doing research for his government that’s taken him deep into the bowels of the David Sarnoff Research Center at the Stanford Research Institute, as well as Compression Laboratories and Sony Japan.

Smith founded AISI Research Corp., which built the first chip around the Electronic Industry Association’s Consumer Electronics Bus (CEBus) standard for “smart houses,” and has also served as computer systems architect for huge government projects. His present company specializes in large-scale, high-speed digital video communications.

Smith’s expertise led to a slot on the Futurist panel at 1989’s Texpo show sponsored by Pacific Bell, where he heard a keynote speech by Pacific Bell president Phil Quigley. Quigley announced during his talk that Japan had decided “to go all fiber” — a $250 billion project — and that’s where Smith’s idea began to take shape.

He wants nothing less than to turn Silicon Valley into a test bed for a fully realized, high-speed fiber-optic network, a kind of human petri dish to cultivate and demonstrate the scores of industries that he’s convinced will spring up around such a network.

“I would do it in Canada,” he says, “but what the hell is the point of doing it in Canada? In Silicon Valley, even the janitor invests in Intel stock.”

Smith wants to get industry leaders fired up enough to stimulate the active involvement of Pacific Bell, which of course will have to install such a network, and to do so in time to announce a 10-year implementation plan at Texpo in 1991.

The first question to be answered is, “Who needs it?” Most people feel that the information that gets delivered over the present copper telephone wires is sufficient.

But what’s happening today is that all forms of information, from text to sound to graphics to video, is being “digitized” — transformed into bytes of computer-readable information. When information is digitized, it can be easily transmitted, whether by telephone wire or direct connections between computer networks.
What many visionaries see for our future is a digital world where almost everything will be delivered over “conduit” into homes and businesses, which will themselves be controlled and operated via a computer-based network that hooks everything together.

This capability has been dreamed about for a long time. But before the invention of optical fibers, which can actually carry data at the speed of light, trying to move large amounts of digital information over copper wire was akin to sucking an ocean of information through a straw.

Today’s telephone technologies have vastly increased the accuracy and speed of information flowing down a telephone wire, and software advances have brought sophisticated services to consumers with little or no painful learning curve. But ISDN — the integrated services digital network that some people think is really high-tech — is acknowledged by many as doing nothing more than wringing every last drop of usefulness out of the aging copper network before it has to be replaced by fiber.

Copper wire, ISDN or no, will never be able to match the incredible capacity of a fiber-optic network, which can transmit at speeds up to 20 gigabits — that’s 20 billion bits of information — per second. Compare that to ISDN’s relatively puny 144 kilobits per second.

The application possibilities are endless, and that’s why Bill Smith is on a mission. He believes that Silicon Valley is really the only location that could exploit the installation of a fiber-optic network into every home and business in Silicon Valley.

In a letter to Pac Bell’s Quigley, he says, “All industries in the valley would receive a great impetus, and it might even stem the flow of development out of both California and the USA. This would be the U.S. flagship test site for the ‘era of visual communications.’ ”

Smith is entreating Pacific Bell to conduct a feasibility study over the next mine months on the project, and is looking to line up interested companies to participate in the project. For my money, it could be the most exciting thing to happen to Silicon Valley in many years.

Next week: Some applications and fascinating industry viewpoints about the project, which I think should be called “Fiber in the Valley.” Ten points if you get that joke.