MURRAY HILL, N.J. Bell Labs struggles to regain its glory

Bell Labs, inventor of the laser and transistor, has 27,300 patents.
MURRAY HILL, N.J. (AP) -- To understand the proud past and uncertain future of Bell Laboratories, step inside its little museum in the brown-brick lobby of Lucent Technologies Inc. headquarters, just past the earnest statue of Alexander Graham Bell with his prodigious sideburns.
Futuristic-sounding organ chords play softly above plaques commemorating Bell Labs' six Nobel Prizes, a counter showing 27,300 patents and displays of major inventions from the lab's 77-year history, including the laser and the transistor.
On one shelf sits a recent innovation: a tiny router that whizzes data over fiber-optic networks by using 256 mirrors to steer beams of light.
The Lambda optical router earned the exhibit space because, for Bell Labs, it was an impressive achievement. But it has yet to do much for Lucent.
Not a hot seller
Bell Labs' parent has shelved the router because telecommunications companies, pressed for cash, aren't buying much new top-of-the-line equipment these days.
Therein lies the painful fact of life at Bell Labs.
Repeatedly squeezed by corporate spinoffs, layoffs and Lucent's financial peril, Bell Labs is mounting a mighty effort to invent future technologies for Lucent to sell.
But like the Lambda router, all of Bell Labs' talents -- especially its impressively varied research specialties, such as computer programming, chemistry and physics -- might not be enough to save Lucent.
After losing $11.9 billion and cutting 30,000 jobs in fiscal 2002, Lucent is betting that the telecom industry will begin to revive in 2003. Though Lucent says it has plenty of cash, some analysts say bankruptcy is possible.
New worries
Such survival worries are relatively new at Bell Labs, where scientists confirmed the Big Bang, invented key wireless technologies and developed computer programming languages.
For most of its life, Bell Labs was the research arm of the national telephone monopoly. Financed by part of every American's monthly bills, its scientists had remarkable freedom.
"If Bell Labs is going to resume its status as a national treasure, it cannot be part of a competitive company," said Narain Gehani, a former computer researcher who recently published his memoirs, "Bell Labs: Life in the Crown Jewel."
If Bell Labs has to keep relying on a corporation's spending ability, Gehani said, "it will be just another industrial research lab."
Any suggestion, however, that Bell Labs' stature could be sinking makes its researchers cringe.
"Every time something happens in the industry, as is now, we get this resurgence of 'Bell Labs is dead,"' said Cherry Murray, senior vice president for physical science research. "We've always managed to come out of it stronger. Bell Labs is not dead. It is adaptable."
Present projects
Current projects include work on nanotechnology; flexible display screens; ways to radically boost the performance of communications networks; software that finds flaws in complex systems; and studies of how patterns in nature could enhance designs in technology.
While Lucent's budget crunch has reduced the quantity of Bell Labs' projects, researchers say quality is unaffected, largely because they have maintained their prized interdisciplinary mix.
"We can go down the hall and find an expert in just about any area of physical sciences or many of the engineering disciplines and we can have a discussion," said Elsa Reichmanis, director of materials research.
Many scientists say Lucent's dire straits have given Bell Labs needed focus. Researchers now have "relationship managers" or "champions" who coordinate projects with Lucent business units. The scientists also have increased contacts with Lucent customers.
Business focus
"Instead of working on atomic physics because it's beautiful, we're working on atomic physics because it could be valuable for the future of communications," Murray said.
Bell Labs has been repeatedly pruned, beginning with the breakup of AT & amp;T in 1984 and continuing with the spinoff of its equipment division into Lucent in 1996. Still, as recently as 1999, Bell Labs had 30,000 employees, 1,000 in "core" long-term research.
Since then, Lucent has spun off divisions into Avaya Inc. and Agere Systems Inc. and sold an optical-fiber business. Company-wide layoffs also struck Bell Labs, and a short-lived Silicon Valley facility closed last year. Now Bell Labs has 10,000 employees, 500 in core research.
Lucent cut research and development spending 34 percent in fiscal 2002, to $2.3 billion. Glass-half-full types note that was 19 percent of revenue, up from 16 percent in 2001.