Get ready. Bandwidth will triple each year for the next 25, creating trillions in new wealth.

Editor’s note: Four years ago, Forbes ASAP published its first issue with a stunning prophecy by contributing editor George Gilder. Fiber optics, said George, had the potential to carry 25 trillion bits per second down a single strand. This represented a ten-thousandfold leap in carrying capacity over the 2.5 billion bits “barrier” long assumed by most experts in the field. What did George see that others had missed? One, a little-recognized (at the time) breakthrough called an erbium-doped amplifier, which keeps optical signals pure and strong over long distances. The other was a deep technical shift, with roots in the 1940s-era work of information theory pioneer Claude Shannon. If you believed Shannon, his logic dictated a new messaging scheme called wave division multiplexing. Though scorned by the experts four years ago, WDM now is emerging as the winner George had prophesied.

The real winners will be all of us, as the coming world of cheap, unlimited bandwidth unfolds and at last fulfills the true potential of the information age. Here is George with an update.

IMAGINE THAT IN 1975 YOU KNEW that Moore’s law—the Intel chairman’s projection of the doubling of the number of transistors on a microchip every 18 months—would hold for the rest of your lifetime. What if you knew that these transistors would run cooler, faster, better, and cheaper as they got smaller and were crammed more closely together? Suppose you knew the law of the microcosm: that the cost-effectiveness of any number of “n” transistors on a single silicon sliver would rise by the square of the increase in “n.”

As an investor knowing this Moore’s law trajectory, you would have been able to predict and exploit a long series of developments: the emergence of the PC; its dominance over all other computer form factors; the success of companies making chips, disk drives, peripherals, and software for this machine. With a slight effort of intellect, you could have extended the insight and prophesied the digitization of watches, records (CDs), cellular phones, cameras, TVs, broadcast satellites, and other devices that can use miniaturized computer power. If you did not know precisely when each of these benisons would flourish, you would have known that each one was essentially inevitable. To calculate approximate dates, you had only to guess the product’s optimal price of popularization and then match its need for mips (millions of instructions per second) of computer power with the cost of those mips as defined by Moore’s law.

Merely by using this technique of Moore’s law matching—and holding to it with unshakable conviction for nearly 20 years—I became known as a “futurist.” Today I await the death of television, telephony, VCRs, and analog cameras with utter confidence as Moore’s law unfolds. You can tell me about the 98% penetration of TVs in American homes, the continuing popularity of couch-potato entertainments, the effectiveness of broadcast advertising, and the profound and unbridgeable chasm between the office appliance and the living-room tube. But I will pay no attention. Just you wait—Jack Welch, Ted Turner, Rupert Murdoch, John Malone, and David Jennings—the TV will die and you may be too late for the Net.

It is now 1997, and a stream of dramatic events certifies that another law, as powerful and fateful and inexorable as Moore’s, is gaining a similar sway over the future of technology. It is what I have termed the law of the telecosm.

Its physical base lies in the same quantum realm of eigenstates and band gaps that governs the performance of transistors and also makes photons leap and lase. But the telecosm reaches beyond components to systems, combining the science of the electromagnetic spectrum with Claude Shannon’s information theory. In essence, as frequencies rise and wavelengths drop, digital performance improves exponentially. Bandwidth rises, power usage sinks, antenna size shrinks, interference collapses, error rates plummet.

The law of the telecosm ordains that the total bandwidth of communications systems will triple every year for the next 25 years. As communicators move up-spectrum, they can use bandwidth as a substitute for power, memory, and switching. This results in far cheaper and more efficient systems. In 1996, the new fiber paradigm emerged in full force. Parallel communications in all-optical networks became the dominant source of new bandwidth in telecom. Like Moore’s law, the law of the telecosm will reshape the entire world of information technology. It defines the direction of technological advance, the vectors of growth, the sweet spots for finance.

America's Dark Secret
FOR MORE THAN A DECADE, American companies have been laying optical fiber strands at a pace of some 4,000 miles a day, for a total of more than 25 million strand miles. Five years ago, the top 10% of U.S. homes and businesses were, on average, a thousand households away from a fiber node; now they are a hundred households away.

However, the imperial advance of this technology conceals a dark secret, which has led to a pervasive underestimation of the long-term impact of photonics. Sixty percent of the fiber remains “dark” (unused for communications) and even the leading-edge “lit” fiber is being used at less than one ten-thousandth of its intrinsic capacity. This problem has prompted leaders in the industry, from Bill Gates and Andy Grove to Bob Metcalfe and Mitch Kapor, to underrate drastically the impact of fiber optics.

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