The following article, INVENTING THE INTERNET AGAIN, was first published in Forbes ASAP, June 2, 1997. It is a portion of George Gilder's book, Telecosm, which will be published in 1997 by Simon & Schuster, as a sequel to Microcosm, published in 1989 and Life After Television published by Norton in 1992. Subsequent chapters of Telecosm will be serialized in Forbes ASAP.

INVENTING THE INTERNET AGAIN







BY







GEORGE GILDER














     FOR THE FIRST TIME IN HIS LIFE as an engineer, Paul
Baran was "scared stiff."  That can happen to people who
stumble too close to the abyss of 20th-century history and
look over the edge.  Born in 1926 in a house in a corner of
Poland that had been claimed by three different nations
during his parents' tenure, brought to America by his family
at the age of 2, Baran was a child of European tempests.
     
     But now, in the heady Southern California of the 1950s,
the young Hughes Aircraft engineer found himself working in
an American crucible. He was a design engineer for the
Minuteman missile control system.  Unlike the liquid-fueled
Titans of the previous era, which required hours of
preparation before they could fly, Minuteman could be
instantly rocketed into the sky.  To the Pentagon this
seemed safer.  The solid-fueled rockets would not be
vulnerable for hours on the ground awaiting fueling.  But
Baran an d his colleagues knew that this would be the most
deadly and dangerous military system ever built.  One
accident and a cloud of missiles was on its way.
     
     Appreciating the risks in the proposed design, Hughes
summoned Warren McCullough from MIT as a consultant on human
behavior.  An expert on command and control-and a
psychiatrist and brain surgeon to boot-McCullough explained
the emerging facts of life.  Throughout history, he told the
Hughes engineers, the real command of the battle migrated to
the men closest to the enemy.  The man in the crow's nest,
not the officers on the ship's bridge, was in de facto
control.  What he saw and reported determined the captain's
orders.  Regardless of nominal chains of command, the real
governance of history moved to individual people on the
front lines, often frightened or panicked at the time.  But
in the nuclear age, no such single person, necessarily
fallible, could ever be trusted.
     
     Analyzing the technical problems of creating a command-
and-control system for Minuteman, Paul Baran found himself
abruptly in the crow's nest, stricken by historic
terror-"scared stiff," as he recalls.  It was clear to him
that the problem was systemic; it could not be solved by
tweaking the command-and-control schemes then being proposed
at Hughes.
     
     To explore the problem more broadly, Baran in 1959 left
Hughes for RAND, the not-for-profit (the name stands for
"R&D") set up after World War II to harbor the systems
analysis skills developed during the war.  At RAND the
formidable strategist Albert Wohlstetter was demonstrating
that in a matter of minutes Soviet short-range missiles
could take out all U.S. foreign strategic air command bases
encircling the Soviet Union.  Then the Soviets could say
stick 'em up-demanding surrender on the basis of the
vulnerability of remaining U.S. missiles to superior Soviet
forces.  In many vivid papers and speeches, Wohlstetter
relentlessly presented his argument that U.S. forces faced a
"missile gap."  The famed Alsop brothers, leading columnists
of the day (Stewart was the father of the computer writer),
echoed the Wohlstetter claims.  John Kennedy listened and
made the gap a theme of his 1960 presidential campaign.
     
     Wohlstetter and his colleagues urged that the Pentagon
redeploy its strategic forces to the United States and endow
them with a second-strike capability-that is, to withstand a
first strike and retaliate in kind.  Greatly reducing the
temptation to go first, this posture would escape the
dangerous hair-trigger tenterhooks of the early cold war.
     
     A viable second-strike capability, however, assumed
that the command, control, and communications systems would
remain intact.  It was here that Baran fretted.  He saw that
one nuclear explosion at high altitude would affect the
ionosphere for many hours and thus wipe out all long-range,
high-frequency radio communications.  In addition, one
strike at the centralized switching nodes of AT&T would
destroy the rest of the control network.  The missile system
might endure, but it would be deaf and blind.
     
     Plunging deeper into history than Kennedy had, Baran
resolved to design a communications system that could
survive a nuclear attack and save the second-strike
deterrent.  He took inspiration from another idea of MIT's
McCullough-a parallel computer system with adaptive
redundancy.  Like the human brain, such a system could
reconfigure itself to work even after portions were
destroyed.  But using the noise-prone analog circuits of the
time, it was impossible to build the necessary switches.
Baran concluded that all the traffic would have to be
digital.  Moreover, the digital traffic would have to be
broken into short message blocks now called "packets," each
containing its own routing information, like a DNA molecule,
and able to replicate itself correctly whenever a
transmission error occurred.  With many additions and
permutations, his original design is today termed the
Internet, and it is shaping the emerging history of the 21st
century.




THE INEXORABLE LOGIC OF DIGITAL COMMUNICATION




     Baran, though, is not satisfied with his creation.
Contemplating its vulnerability to terrorism and other
attack, he feels pangs of fear that echo his alarm of 40
years before.  As more and more of the critical systems of
advanced industrial society migrate to the Net, they become
susceptible to new forms of sabotage, espionage, hacking,
and other mischief.  Air traffic controls, train switches,
banking transfers, commercial transactions, police
investigations, personal information, defense plans, power
line controllers, and myriad other crucial functions all can
fall victim to cybernecine attack.  If the Internet is to
fulfill its promise as a new central nervous system for the
global economy, its security and reliability problems will
have to be addressed.
     
     Seventy-one years old, still with his Ph.D. economist
wife Evelyn (their son David is director of information
technology at Twentieth Century Fox Home Entertainment),
Baran remains in the crow's nest, buffeted by inklings and
insights of historic threats and opportunities. In a sense,
Baran's current projects merely fulfill the far-reaching
logic of his original concept, elaborated at RAND between
1960 and 1962 and published under the title "On Distributed
Communications" in 11 compendious volumes in 1964:  a
survivable "network of unmanned digital switches
implementing a self-learning policy at each node, without
need for a central and possibly vulnerable control point, so
that overall traffic is effectively routed in a changing
environment."
     
     To fulfill this scheme, Baran specified all the
critical functions of the Internet:  packets with headers
for addresses and fields for error detection and packet
ordering.  He described in detail the autonomous adaptive
nodes found in Arpanet IMPs (interface message processors)
designed by Bolt, Beranek & Newman (BBN).
     
     Baran also included features only recently and
selectively introduced, such as encryption, prioritization,
quality of service, and roaming ("provisions to allow each
user to 'carry his telephone number' with him").  He
described a web of peer nodes each connected to three or
more other nodes, and he offered the first of the
distributed routing algorithms that have multiplied over
time.
     
     Unique to his vision was its grasp of the economics of
a network that could handle "the expected exponential growth
in the transmission of digital data."  Declaring that "it
would be possible to build extremely reliable communications
networks out of low-cost unreliable links, even links so
unreliable as to be unusable in present-type networks," he
estimated that the price of the system would be some $60
million per year.  That was some 20 to 30 times less than
what was being paid by the Department of Defense for their
leased communications systems without any of these features.
It was two orders of magnitude cheaper than new analog
national systems being proposed at the time by each of the
three military services.
     
     Thus Baran not only conceived the essential technical
features of the Internet, he also prophesied the cliff of
costs over which digital technology would take the
networking industry.  By imagining the compounding effects
of Moore's law three years before Moore's own famous
prophecy, Baran stressed the key economic drivers that
impelled the prevalence of the Web as the universal Net.
     
     The system of communications that Baran attacked in the
early 1960s at RAND was the imperial establishment of AT&T.
As Baran explains, "While AT&T did have digital transmission
under examination, it was in the context of fitting directly
into the plant by replacing existing units on a one-for-one
basis.  A digital repeater unit would replace an analog
loading coil.  A digital multiplexer would replace an analog
channel bank-always a one-for-one conceptual replacement,
never a drastic change of basic architecture.  I think that
AT&T's views on digital networks were most honestly
summarized by AT&T's Joern Ostermann after an exasperating
session with me:  'First, it can't possibly work, and if it
did, damned if we are going to allow the creation of a
competitor to ourselves.'"
     
     In 1972 the company sealed its fate by turning down an
opportunity to buy the entire Arpanet.  As Larry Roberts
explained in Where Wizards Stay Up Late, "They
finally concluded that the packet technology was
incompatible with  the AT&T network."  So it was and so it
still is.  The existing phone system remains the chief
obstacle to the final triumph of the Net.  But the logic of
digital communications is inexorable.  It will displace all
the existing establishments of television and telephony.




WASTED FOREVER...LIKE WATER OVER A DAM




     These days Baran's vision, however, goes far beyond
wireline communications.  Baran takes the Internet model and
extends it boldly to wireless communications.  On June 23,
1995, on the occasion of the Marconi Centennial, marking the
100th anniversary of the invention of the radio, Baran gave
a momentous keynote speech in Bologna, Italy.  In it he
demanded a radical reconception of wireless networks.
     
     "The first 100 years of radio," he declared, were
marked by a perpetual "scarcity of spectrum.... One of the
very first questions asked of young Marconi about his
nascent technology was whether it would ever be possible to
operate more than one transmitter at a time.  Marconi's key
British patent #7,777 taught the use of resonant tuning to
permit multiple transmitters.... [Yet] even today, with over
30,000 times more spectrum at our disposal than in Marconi's
day, entrepreneurs wishing to implement new services
encounter the same perpetual shortage of frequencies."
     
     Focusing on the most desired bands between  300 and
3,000 megahertz (UHF), Baran asserted that when you "tune a
spectrum analyzer across a band of UHF frequencies,:"  you
discover that "much of the radio band is empty much of the
time.  This unused spectrum might be available for
transmission if we could take measurements and know exactly
when and where to send the signal."
     
     As an example, he cited "the many millions of cordless
telephones, burglar alarms, wireless house controllers, and
other appliances now operating within a minuscule portion of
the spectrum and with limited interference to one another.
These early units are very low power dumb devices
compared to equipment being developed that can change its
frequencies and minimize radiated power to better avoid
interference to itself and to others.
     
     "In part," he declared, "the frequency shortage is
caused by thinking solely in terms of dumb transmitters and
dumb receivers.  With today's smart electronics, even
occupied frequencies could potentially be used."
     
     The chief reason for the apparent shortage of spectrum,
he concluded, is regulation of it.  Echoing his earlier
critique of wireline communications, he declared that "the
present regulatory mentality tends to think in terms of a
centralized control structure, altogether too reminiscent of
the old Soviet economy.  As we know today, that particular
form of centralized system... ultimately broke down.
Emphasis with that structure was on limiting distribution
rather than on maximizing  the creation of goods and
services.  Some say that this old  highly centralized model
of economic control remains alive and well today-not in
Moscow but within our own radio regulatory agencies."
     
     The heart of the problem is the concept of spectrum as
public property-as scarce real estate or a precious natural
resource.  Spectrum is nothing of the kind.  It has been
created by a series of brilliant technical innovations,
beginning with Marconi and continuing in a steady stream of
high technology oscillators and digital signal processors:
from magnetrons and kystrons to varactor multipliers and
surface acoustical wave devices, from gallium arsenide and
indium phosphide heterojunctions to voltage-controlled
oscillators and Gunn or IMPATT diodes.  Spectrum is chiefly
a product of inventors and entrepreneurs.  Americans will
rue the day when foreign governments and international
organizations begin auctioning and taxing, marshaling and
mandating the use of these mostly American technologies.
     
     The real estate model applies chiefly to broadcasters
and others using analog modulation schemes in which all
interference shows up in the signal.  A television signal
requires some 50 decibels of signal to noise power, or
100,000-to-1.  By contrast, error-corrected digital signals
can offer virtually perfect communications at a signal-to-
noise ratio well below 10 decibels, or 10,000 times less.
Moreover, new digital systems can divide and subdivide the
spectrum space into cells and differentiate calls by spread-
spectrum codes or even isolate particular connections in
space by space-division-multiple-access-devices that
function as "virtual wires" allocating all of the spectrum
to each call.
     
     Baran pointed out that "any transmission capacity not
used is wasted forever, like water over the dam.  And there
has been water pouring here for many, many years, even
during an endless spectrum drought.:"    Although Baran
urged as an ideal the transfer of the 480 megahertz of
spectrum currently occupied by analog broadcasters to fiber
optics and cable coax, he said, "We don't have to wait [for
this ideal solution]....The existing spectrum can be more
efficiently used by resorting to smart receivers and
transmitters."




SMART RADIO IS A BRAIN BEHIND THE ANTENNA



     
     To conceive of Baran's model of wireless, begin by
thinking of the human eye and comparing it to a radio.  Like
a radio, the eye is essentially a device for converting
photons into electrons, pulses of electromagnetic energy
into electrical currents.  Geared for visible light rather
than radio frequency signals, the eye is a receiving
antenna.  As radio technology moves up through the
microwaves toward the infrared realm-with infrared wireless
links from Canon now reaching 155 megabits per second-many
of the differences are dissolving.
     
     Yet, in the crucial index of performance, the radio is
drastically inferior to the eye.  While most radios can
receive signals across a span of frequencies ranging from
the kilohertz to the megahertz, from thousands to a few
million cycles a second, the eye can grasp signals with a
total bandwidth of more than 350 trillion hertz (terahertz).
That is the span of visible light, from 400 terahertz to 750
terahertz, red to purple.
     
     How is it that your eyes command 350 terahertz of
bandwidth and your FM radio around 20 megahertz, 17 million
times less? It is not chiefly the special powers of the
retina and other optical faculties.  Radio antennas can
collect an even larger span of frequencies.  The difference
is mostly behind the receiver.  Backing up the eyes is the
processing power of some 10 billion neurons and trillions of
synapses.  Backing up the radio antenna is a lot of fixed-
analog hardware.  Eyes are smart and aerobatic while the
radio is dumb and blind.
     
     In Baran's vision, the future of wireless is the
replacement of current dumb radios by smart digital radios
that resemble eyes.  Coupling radio technology with computer
technology, the antenna can acquire a brain.  Smart radios
can eventually process gigahertz of spectrum (billions of
cycles a second).  They can sort out the frequency channels
much as eyes sort out arrays of color, and pin down codes
and sources of radiation much as the eyes descry different
sources, shapes, and patterns of light.  For example, a
smart radio could process phone calls, videos,
teleconferences, geopositioning codes, speed-trap lasers,
and emergency SOS's.
     
     The result will be a transformation of the nature of
the spectrum.  The current real estate model will give way
to a new view.  Rights to spectrum will roughly resemble
drivers' licenses for use on the highways.  Today you use
your 350-terahertz eyes to survey the highway in front of
you and avoid other traffic.  As long as you do not collide
with other users, pollute the air, or go too fast (use
excessive power), you can drive anywhere you want.  As
radios are computerized, they will be able to "see" the
radio frequency spectrum as your eyes see the roads.  Smart
radios will be licensed to drive in open spaces in the air
as long as they don't collide with other radios, overpower
them, or pollute the airwaves.
     
     As Baran argues, the fulfillment of this dream is at
hand.  It is the broadband digital radio or software radio.
Essentially, the radios used in cellular or PCS (personal
communications services) phones will be able to
differentiate among frequencies; they will be able to tell
which direction a signal is coming from and isolate it in
space; they will be able to identify the language of codes
and protocols and waveforms that it is using and download
software translators.  No longer caught in a dedicated set
of channels, time slots, protocols, data types, and access
standards, radios will be smart and agile rather than dumb
and fixed frequency.




MOORE'S LAW WILL LEAPFROG TODAY'S LIMITS




     This will not happen tomorrow.  But like any
technological vista, it illuminates the future.  It opens
the way to a new wireless paradigm, fully in place shortly
after the turn of the century, that will mandate an entirely
new model of wireless regulation and a new method for
judging the evolution of companies and their prospects.  In
general, the companies on the path to broadband digital
radios-the smart radio-will prevail over companies that hook
their futures to hardwired machines linked to narrow spans
of  frequencies.  Moore's law, the doubling of computer
power every 18 months or so, is enabling the creation of
broadband  cellular radios in which most of the processing
occurs in digital form.
     
     Some of the first smart radios were built for the
military.  In Operation Desert Storm, the cacophony of
allied combat radios-some 15 of them using a variety of
frequencies, modulation techniques, encryption codes, and
waveform standards, such as AM or FM or PCM (pulse code
modulation)-created a virtual Babel in the sand.  Units
needed a separate radio system for every radio (or radar)
standard.  As a result, the Pentagon launched the Speakeasy
project-one smart radio that could process all the different
standards in software.  Made by Hazeltine and TRW, the first
prototypes were demonstrated successfully in 1994.  Because
standards change over time and hardware improves at the pace
of Moore's law, a software programmable radio also saves
money.  Rather than upgrading the system in hardware every
time the technology changes, software radios can be upgraded
merely by downloading a new software module.
     
     Speakeasy engineers have spread the word through the
cellular industry.  Stephen Blust, now at BellSouth
Wireless, is leading an international effort to create smart
radio standards-the MMITS project.  Today, with the advance
of an array of new digital technologies, including CDMA,
TDMA, GSM, DECT 1900, SMR, PHS, and a spate of others, every
urban area is becoming a Desert Storm of incompatible
radios.  Not only are these systems unable to communicate
with one another, but they also require separate spectrum
and base station equipment.  All this redundant processing
has raised the costs and reduced the universality of
wireless and prevented cell phones from displacing wireline
telephony.
     
     The solution to complexity, however, is Moore's law:
Put it on a chip.  Reducing this Babel of complexity to
silicon microchips, with hundreds of millions of transistors
on centimeter slivers of sand that ultimately cost less than
$2 to manufacture, smart radios can radically simplify the
cellular landscape.  Freed of most wires, poles, backhoes,
trucks, workers, engineers, and rights of way, cellular
should be far cheaper than wireline.
     
     For example, the conventional analog base station that
receives your cellular calls and connects them to the
telephone network requires a million-dollar facility of
1,000 square feet.  This structure may contain a central-
office-style switch to link calls to the public switched
telephone network, huge backup power supplies and batteries
to handle utility breakdowns, and racks of radios covering
every communications channel and modulation scheme used in
the cell.  This can add up to 416 radios, together with all
the maintenance and expertise that multiple standards
entail.
     
     In the near future, one wideband radio will suffice.
Digital signal processors ultimately costing a few dollars
apiece and draining milliwatts of power will sort out all
the channels, codes, modulation schemes, multipath signals,
and filtering needs.  Gone will be the large buildings, the
racks of radios, the arrays of antennas, the specialized
hardware processors.  Gone will be the virtual honeycombs
towering in the air in time and space with exclusive
spectrum assignments and time slots, and possibly gone will
even be the battalions of lawyers in the communications bar.
     
     All this apparatus can be replaced by a programmable
silicon base station in a briefcase, installed on any
lamppost, elevator shaft, office closet, shopping mall
ceiling, rooftop, or even a house.  The result, estimated
Don Cox of Stanford, the father of American PCS at Bellcore,
could be a reduction of the capital costs of a wireless
customer from an average of some $5,555 in 1994 to perhaps
$14 after the turn of the century.  That is a paradigm cliff
of costs.
     
     As smart radios are delivered in the first years of the
new century, they will allow escape from the zoo of
conflicting protocols.  Base stations will be programmable
in software, able to handle any popular protocols, including
the new technologies that will be emerging.  The world of
wireless will escape the bondage of air standards, where if
you live in a GSM (global services mobile) area, you are
forced to use GSM, and if you live in a CDMA (code division
multiple access) area, your communications-poor cousins
visiting from Europe will have to give up their GSM phone
and demand to borrow yours (will they ever give it back?).
Under the new regime, different standards mean different
software loaded into RAM (random access memory) in real
time.  Any cell can accommodate a variety of access
standards, channel assignments, and modulation schemes, and
the best ones will win.




FROM MICROWAVES COME TORRENTIAL BITS



     
     To get there from here, however, will require heroic
achievements in the technology of radios.  Every radio must
combine four key components:  an antenna, a tuner, a mixer,
and a modem.  Easiest is the antenna.  Even though antennas
too are converging with computer technology and becoming
smart, for many purposes a shirt hanger will do the trick.
It is the other components that deliver the message to the
human ear.
     
     Tuners usually employ the science of resonant circuits
to select a specific carrier frequency or frequency band.
The cellular band, for example, comprises 25 megahertz at
around 850 megahertz.  The PCS band comprises some 30
megahertz at around 1,950 megahertz.  A mixer converts these
relatively high microwave frequencies into an intermediate
frequency (IF) or to a baseband frequency, which can be
converted to a digital bitstream.
     
     Familiar in the PC world, a modem is a modulator-
demodulator.  In transmitting, it applies an informative
wiggle (AM or FM, say) to the carrier frequency.  In
receiving, it strips away the carrier, leaving the
information.
     
     In the old world of dumb radios, transceivers join all
these components into one analog hardware system.  In the
new world of smart radios, only the antenna and the front-
end mixer are analog and hardwired.  Channels, frequency
bands, modulation schemes, and protocols all can be defined
in software in real time.  The radio becomes a programmable
microwave eye-a device that can see whatever colors of RF
you want to send it.
     
     The key to digital radio is the analog-to-digital
converter.  It takes a radio or intermediate frequency and
samples it at least at a rate double the frequency to
translate it into a series of numbers.  Imagine a strobe
light illuminating a dancer.  The light will have to strobe
at least twice as fast as the dancer moves or you will not
be able to detect the dance.  Indeed, in a phenomenon called
aliasing, you may see a different, slower dance, as you see
a tire rotating slowly in the wrong direction on a film.  In
a similar way, an ADC strobes (samples) the dance of
inflected frequencies on the carrier wave.  The resolution
of the ADC is measured in bits, setting how high the number
can be that defines the waveform and, in samples per second,
determining how high a frequency the ADC can capture without
aliasing.
     
     Ultimately, early in the next century, the advance of
analog-to-digital converters will dispense even with the
mixer.  Then the all-software radio will be here.  Analog-to-
digital converters (ADCs) will be able to translate
microwave frequencies directly from the antenna into a
digital bitstream.  Alcatel has already accomplished this
feat in the GSM cellular band at its labs in Marcoussis,
France.  But so far this almost totally digital radio is a
stunt rather than a product.  That will change.
     
     Most of today's ADCs cannot function reliably in real
time at microwave frequencies (above 300 megahertz).
Therefore, mixers are vital.  Whether digital or analog, a
mixer is essentially a multiplier.  As invented by E. H.
Armstrong, the father of FM, mixers are superheterodyne.
They use local oscillators (LOs) to multiply the carrier
frequency with a lower frequency.  The key result is a
frequency that represents the difference between the LO
frequency and the carrier.  This frequency is an
intermediate frequency that holds all the information borne
by the carrier but at a level that can be processed by
existing ADCs.
     
     By far the most effective mixer is the paramixer
invented by Steinbrecher Corporation of Burlington,
Massachusetts, now owned by Tellabs and renamed Tellabs
Wireless.  This device can range gigahertz of frequencies
with a spur-free dynamic range (a range of volumes without
spurious crackles or harmonics) that could capture the sound
of a pin dropping at a heavy metal rock concert.  For a
fully digital superbroadband radio, a cascade of these still-
costly devices is still the best bet.  The pioneer of this
technology since it was conceived a decade ago by MIT
professor Donald Steinbrecher, Tellabs's Burlington
operation introduced the Steinbrecher MiniCell in May for
wireless local loop and interior cellular applications.
     
     Tellabs has had trouble selling its wideband radios for
cellular applications, for which they may be overdesigned.
With the increasing spread of CDMA, which ordinarily uses
only one to three channels, the initial gains from a
broadband radio are small.  But for a wireless local loop,
with many thousands of customers in the Third World using
all available channels, a broadband base station could offer
large efficiencies.  Replacing a large number of costly
custom radios with one programmable device, the MiniCell may
find its niche.
     
     As ADC technology continues to advance, however, it
will relieve pressure on the mixer, opening the way to still
cheaper and lower power solutions.  With the expiration of
Steinbrecher's patent on the paramixer, the business is
opening up.  Watkins-Johnson has created a tiny mixer device
in gallium arsenide the size of your smallest fingernail.
So has Mini-Circuits of Brooklyn, New York.  "It has 50%
less performance than Steinbrecher's, but it costs only 10%
as much.  Many customers say, 'It's a deal,'" observes
former Steinbrecher CEO and president R. Douglas Shute, now
contemplating a startup.
     
     AD converters are now edging toward microwave
frequencies.  Both Analog Devices and Comlinear, a National
Semiconductor company, have introduced 40-megasample-per-
second products at a resolution of 12 bits.  This allows
more of the mixing to move into digital multipliers.  The
first of the digital downconvertor chips came from Harris
Corporation of Melbourne, Florida.  Harris now has parlayed
its expertise in RF and mixers into the creation of a
sophisticated programmable machine that demonstrates the
management of multiple modulation schemes in one cellular
radio.  Introduced on the floor of the Fifth Annual Wireless
Symposium Exhibition in late February in Santa Clara,
California, the Harris smart radio showcases its
programmable HSP50214 digital downconvertor chip and is run
from a PC.  With an array of displays, the machine is
designed to allow configuration and testing of smart
transceivers from a Windows PC.
     
     With high-powered digital signal processors and leading-
edge ADCs, Analog Devices is a paragon of the digital radio
paradigm.  At the CTIA (Cellular Telecommunications Industry
Association) meeting in San Francisco during the first week
of March, Analog introduced a wideband smart radio tuned to
the cellular band but applicable through the PCS band as
well.  A reference design to be used by infrastructure
manufacturers, it displays an array of new chips from Analog
comprising a specialized ADC called the 6600, tunable
filters called the 6620 and the 6640 that function as a
digital tuner, a SHARC DSP chip that performs the modem and
channel-coding role (any advanced DSP will do), and a
"sinfully cheap" Watkins-Johnson mixer chip the size of your
fingernail.  Incorporating an automatic gain control and a
received signal strength indicator, the ADC is customized
for smart radio applications.
     
     The antenna is from Radio Shack (most any will do).
From a Windows PC using Visual Basic, Analog engineers can
move from one cellular channel to another and from GSM to
CDMA to DECT 1900 to IS-136 to the Japanese Personal
Handyphone system (PHS).  As manufacturers around the globe
converge on a single intermediate frequency of 70 megahertz,
the reference radio could adapt to any cellular band, from
850 megahertz on up.  All you would have to do  is change or
retune the mixer.  According to Tom Gratzek, Analog
Devices's director of base station marketing at the Analog
communications center in Greensboro, North Carolina,
customers say, "Shazaam!"




THE RUSH TO CASH IN... WHO WINS, WHO LOSES



     
     Interest is acute at all major telecom equipment
manufacturers, from Ericsson to Motorola, and champions
include every telecom company that thinks it may have
guessed wrong in the GSM, TDMA, CDMA wars.  BellSouth, for
example, is slipping into a GSM ghetto, but it dreams of
deploying smart radios that can play any popular standard
and allow it to filch (i.e., service) CDMA customers.  Also
a TDMA orphan, AT&T could buy cheap, all-purpose base
stations that allow it to sell any favored brand of service.
Ericsson is using the technology to create indoor GSM base
stations that can fit in a closet, and if worst comes to
worst (as it will), Ericsson will also offer CDMA, perhaps
initially as an overlay for data.
     
     By drastically enhancing efficiency in the use of
spectrum, broadband digital radios will lend new force to
the industry's move up the frequency ladder toward bandwidth
abundance.  They enable the seamless convergence of the
cellular band not only with the PCS band but also with an
array of other applications such as the low-powered ISM
(industrial, scientific, and medical) bands at 900 megahertz
used by Baran's  Metricom startup, the 24-gigahertz band of
Associated Communications, the 28-gigahertz band of Local
Multipoint  Distribution Service (LMDS) used by
CellularVision for wireless cable, and the 38-gigahertz band
of WinStar.  This up-spectrum bias assures the continued
success of companies pressing the frontiers of microwave
integrated circuits, low-noise amplifiers, power amplifiers,
and other devices that function in  the gigahertz.
     
     Going over the cliff of costs, the industry can
introduce radically new products.  We have just undergone
the epoch of the personal computer, climaxing in 1996 with
PCs outselling TVs in units for the first time.  We are now
entering a new era when a new form of PC will be dominant.
It may not do Windows, but it will do doors.  Tetherlessly
transcending most of the limitations of the current PC era,
the most common PC will be a digital cellular phone.
     
     It will be a dataphone, as faithful readers of these
pages will know.  It will be as portable as your watch and
as personal as your wallet.  It will recognize speech and
convert it to text.  It will plug into a slot in your car
and help you navigate streets.  It will consult electronic
yellow pages and give directions to the nearest gas station,
restaurant, police headquarters, or hotel.  It will collect
your news and your mail and, if you wish, it will read them
to you.  It will conduct transactions and load credit into a
credit chip on a smart card, which can be used like cash.
It can pay your taxes, or help you avoid them, or soothe you
with soft music as you do your calculus homework.  It will
take digital pictures and project them onto a wall or
screen, or dispatch them to any other dataphone or computer.
It will have an Internet address and a Java run-time engine
that allows it to execute any applet or program written in
that increasingly universal language.  Or it will dock in a
more powerful machine to perform more demanding functions.
It will link to any compatible display, monitor, keyboard,
storage device, or other peripheral through infrared pulses
or radio frequencies.
     
     And, oh yes, it will unlock your front door or car
door, open your garage door, or even play Jim Morrison
songs, if you are old enough to care for those swinging
Doors of the 1960s (amazingly enough, my teenage daughters
do).
     
     Sorry, though, Nokia, your model 9000, which comes
closest today to this new machine, will not cut it, at least
in the United States, because it is based on Europe's
increasingly obsolescent GSM standard.  Also offering the
right form factor but the wrong access standard is the IBM-
BellSouth Simon, which is based on the U.S. analog cellular
system (AMPS) or CDPD (cellular digital packet data).  The
most common PC will not be a GSM or CDPD device, because it
will soon need to provide bandwidth on demand while draining
the lowest possible power, whenever it is not plugged in.
Thus the first PC of the new  paradigm will probably have to
be CDMA, built from the bottom up to provide bandwidth on
demand, according to TCP/IP Internet standards, at a handful
of milliwatts of communications power.
     
     Among the companies soon to supply such machines,
resembling the popular U.S. Robotics Pilot, are Sony,
Qualcomm, Lucky-Goldstar, and Samsung.  In cooperation with
Alcatel, the European giant, which has just announced a CDMA
program, Qualcomm base stations will soon contain a GSM link
that can allow such CDMA dataphones to tie seamlessly to GSM
systems in Europe.  This will permit European carriers to
use CDMA to expand capacity without jeopardizing their GSM
customers.
     
     Inspiring the Baran vision of wireless is the
spectronic paradigm, in which most of the industry, from
personal computers to cellular phones, moves on into the
microwaves and is discussed more in terms of megahertz and
gigahertz than in the usual metrics of mips and bits.  The
spectronic paradigm tends to favor the manufacturers of
gallium arsenide, indium phosphide, and silicon germanium
devices.  Even as Philips and other firms push silicon
bipolar chips toward microwave frequencies, the industry
will move to higher domains of spectrum where gallium
arsenide and indium phosphide tend to prevail.  For the
power amplifiers needed in every cell phone, gallium
arsenide is superior to all the silicon variants.  Pushed by
the advance of the spectronics paradigm, the current ride of
Vitesse, Anadigics, TriQuint, and other gallium arsenide
innovators is likely  to continue.
     
     The major long-term winner is silicon germanium.
Pioneered by IBM fellow Bernard Meyerson and tested and
sampled by Analog Devices, silicon germanium combines much
of the manufacturability of silicon with the high-frequency
operation of gallium arsenide.  IBM has recently contracted
with Hughes's communications division to develop silicon
germanium microwave devices.
     
     As the technology advances, the broadband radios will
be ideal to offer video teleconferencing, World Wide Web,
and other image-rich wireless content, including CDMA
bandwidth on demand.  Data, not voice, will be the critical
application.  As people brandish their dataphones around the
globe, linking to convenient displays through IR connectors,
users can break out into a tetherless telecosm where they
can work or play, study or pray, anywhere they go.
     
     A major supplier of wireless in Third World countries
may be NextWave, the aggressive CDMA vendor for PCS, now
preparing an IPO.  As a "carrier's carrier" providing only
infrastructure and network services and leaving the sales
and marketing to the locals, NextWave will join its
complementary sister company in space, Globalstar, at the
heart of a CDMA fabric of culture-independent worldwide
communications.  Watch Motorola's obsolescent Iridium, with
its exclusive spectrum requirements and its effort to bypass
all local infrastructure, sink like a stone.
     
     The new paradigm of wireless joins Baran's two key
inspirations-Internet and smart radio-to burst the chains of
geography.  People who want leading-edge computers and
communications can get them wherever they may live.  Using
Globalstar, Teledesic, and other low-earth-orbit (LEO)
satellite systems that will be available as the smart radios
roll  out, students in the Third World can study or work in
the First World.  Teachers and entrepreneurs in the First
World can serve and employ people around the globe.
Imagined gaps between the information rich and poor will
collapse in an infoscape equally accessible to all.
     
     Baran has not spent  his life in speculation or
prophecy.  Living at the heart of Silicon Valley in a walled
and radiantly flowered community a few minutes down
Middlefield Road from Netscape, Baran sits at the epicenter
of a series of entrepreneurial creations.  His home-office
PCS and Power Macs are linked to the Internet through the
Palo Alto Cable Co-op by cable modems from Com21, which he
founded and now chairs.  To run multimedia  programming down
twisted-pair wires, the regional Bell operating companies
now propose to use discrete multitone technology (DMT), the
basic technology conceived by Baran for Telebit and now the
leading digital subscriber loop (DSL) method, taken up and
perfected by Amati Communications, just down the road in San
Jose.  StrataCom, recently purchased by Cisco for $4
billion, began as a leveraged buyout spinoff from Baran's
Packet Technologies.
     
     Metricom, a Baran company with investments from Bill
Gates, among others, offers wireless Internet services
through Baran's neighborhood and at campuses across the
country.  Baran's company, Equatorial Communications,
introduced spread spectrum commercially as a way of
delivering information from satellites below the noise floor
required by the FCC.  Spread spectrum is now, in the form of
the CDMA of Qualcomm and Globalstar, the world's fastest-
growing communications technology.  And it is the basis for
the flourishing, unlicensed wireless systems, such as
Metricom, operating at less than one watt of transmit power
in the ISM (industrial, scientific, medical) bands.
     
     Collectively, the visionary concepts of this once-
myopic and still-modest engineer offer the foundation of an
effort to reinvent the Internet in an increasingly wireless
form and reshape the communications policies of the nation
and the world.
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     George Gilder is a contributing editor of Forbes ASAP. He
also publishes the monthly Gilder Technology Report.

     The Gilder Technology Report is designed to assist investors and
corporate decision makers in formulating strategy and tactics for the
exciting new era of technology.

     For additional information, please contact the Gilder Technology
Group by calling toll-free (888) 484-2727.  For information about GTR
and its September conference, email gtg@gilder.com.





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