Bell Labs transistor development

AT&T's 1925 reliability study of mechanical switches led to the projection that the telephone system would collapse around 1960. Tom uses this to argue the transistor was *applied* research, not basic — invented to replace mechanical switches whose failure-in-time rate was unacceptable for a growing network.

In about 1925, AT&T, which was called Bell Laboratories back then, the Bell System, was looking at all the mechanical switches they had. People always say that the transistor came out of basic research. No — AT&T in about 1925 was looking at how many mechanical switches they had in their system, and they started something, a reliability group, a bunch of statisticians who were looking at how to make the system more efficient. They projected that sometime by about 1960, 35 years hence, the whole system would come to a screeching halt because the reliability of mechanical switches was about 1 in 10,000 per 10 years. They call it FITs, failures in time. If you're in the semiconductor business, they talk about FITs, failures in time.

Used to make the point that what is remembered as foresighted basic research at Bell Labs was actually applied research forced by the failure-rate math of mechanical switches under a regulated-monopoly six-percent-profit incentive structure. Tom uses this case as his lead example for the "industry doesn't do basic research" thesis.

Do you know why the transistor was developed? It wasn't basic research at Bell Labs. Anybody know why Bell Labs was looking for an electronic switch in 1925? There's a book called The Idea Factory — actually there are two books with that title. One's about MIT, written by a mechanical engineering graduate student about his experience here. The other is about Bell Labs. It talks about how the Bell System became a publicly regulated monopoly around 1908. That meant they would get six percent profit on whatever they spent. So one of the things they could do is research, and they'd get six percent profit guaranteed. It just goes into the rate base.

Dave: When I graduated from MIT in 1968 — that was my undergraduate graduation, my bachelor's degree — the world was a very different place than it is today. We were at the height of a cold war. The government had been for many years extremely interested in investing in advanced materials, and pursuing a degree in sophisticated material science opened up a lot of opportunities. The world's changed significantly since then. Places like Bell Laboratories, which really had some of the most brilliant minds I think in science in the 1960s, disappeared with the breakup of AT&T back in 1970 [1984].