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     The following article, ISSAQUAH MIRACLE, was first published
in Forbes ASAP, June 7, 1993.  It is a portion of George Gilder's
book, Telecosm, which will be published next year 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.

      I contacted the author and Forbes and as the preface above
indicates obtained permission to post this.  Please note that the
preface must be included when uploading or posting this article.



The following was received directly from Forbes ASAP on Wednesday
October 27, 1993.
-----------------



Date:     Wed Oct 27, 1993  9:17 pm  GMT
From:     Forbes ASAP / MCI ID: 579-9624



                        ISSAQUAH MIRACLE






                               BY


                          GEORGE GILDER





     In the spring of 1989 when Michael Bookey first visited the
Middle School in Issaquah, Wash., to help the school system with
its computers, he was reminded of his early ventures into
Communist China.  After 20 years of working with computer
networks, to enter Issaquah seemed to me like encountering an
exotic tribe of primitives untouched by the modern world.

     The only sign of modern technology was a forlorn computer
room full of Radio Shack TRS-80 machines, most of which had
broken down.  Then he learned that as a remedy for this problem,
the district had recently voted a levy of $2.7 million for
outlays on high technology.

     Lacking any better ideas, the school system had decided to
distribute the money equally among the teachers, to spend as they
wanted.  What they wanted turned out to be VCRs, incompatible CD-
ROM drives and a random selection of computers, printers and
other gear to be scattered through the schools under the
influence of a flock of computer salespeople attracted to the
site by the pool of mandated money.

     To Bookey, this remedy seemed worse than the disease.  It
meant that the bulk of the money would be wasted, further
estranging both taxpayers and students from the most powerful
technologies of their era.  Bookey wanted school officials to
know that the most powerful technology is not computers, but
computers joined in networks.

     Explaining the magic of networks, Bookey asks you to imagine
a car plumped down in the jungle.  Checking it out, you might
find it a very useful piece of equipment indeed.  A multipurpose
wonder, it would supply lights, bedding, radio communications,
tape player, heat, air conditioning, a shield against arrows and
bullets, and a loud horn to frighten away fierce animals.  In awe
of the features of this machine, you might never realize that the
real magic of a car comes in conjunction with asphalt.

     For the first 10 years of the personal computer era,
according to Bookey, we have used our computers like cars in the
jungle.  We have plumbed their powers for processing words and
numbers.  All too often, home computers have ended up in the
closet unused.  We have often failed to recognize that most of
the magic of computing stems from the exponential benefits of
interconnection.

     In the microcosm, the interconnections come on individual
chips, as ever smaller transistors crammed ever closer together
work faster, cooler and cheaper, enhancing both the capability
and the speed of the processor.  The microcosm strewed some 100
million personal computers around the world and endowed
individuals at workstations with the creative power of factory
owners of the Industrial Age.

     Just as the microcosm generates exponential gains from
increasing connections on chips, the telecosm generates
exponential gains by increasing connections between chips,
powerful microcomputers in themselves.  These links between
increasingly potent microchips will soon dominate the world of
communications.

     The networking industry therefore faces a drastic transition
from a people-to-people regime to computer-to-computer.  This
change is so radical that it resembles a mutation that creates a
new species.  People communicate in domains of time and space
entirely alien to the world of computers.  To a person, a one-
second delay on a voice line seems hardly noticeable; to a
computer, one second may mean a billion computations that would
take hundreds of human lifetimes to accomplish by hand.

     Most important, people can transmit or receive only a small
stream of information at a time.  They want relatively narrow
bandwidth connections for a relatively long period, a 64-kilobit-
per-second voice link, for example, for a 10-minute phone call.

     Computers, on the other hand, can handle hundreds of
millions or even billions of bits a second.  They often need many
millions of bits of bandwidth for a short time fractions of
seconds.  As industry shifts from a human scale of time and space
to a computer scale, the systems and structures in existing
telephone and broadcast networks become almost irrelevant.
Essentially, all other forms of networks: voice, text, video and
sound, are rapidly giving way to various new forms of multimedia
computer networks.

     Driving this overwhelming force of change is the alchemy of
interconnections, working in the telecosm with the same logic and
feedback loops as connections in the microcosm.  hile dumb
terminals such as phones and TVs use up bandwidth without giving
anything back, computers are contributors to bandwidth, not
consumers of it.

     In general, the more computers, the more bandwidth.  Not
only is the network a resource for each new computer attached to
it, but each new computer is also a resource for the network.
Each new computer expands the potential switching and processing
capacity of the system by a large multiple of the increasing
demands it makes on other switches and processors.

     As ever more powerful computers are linked ever more
closely, whether in digital cellular microcells or in webs of
fiber and coaxial cable, usable bandwidth expands explosively.
Governing the expansion of networks, the law of the telecosm is
just as potent as the law of the microcosm.  Indeed, in enhancing
the productivity of organizations, the telecosm consummates the
microcosmic miracle.



Microsoft Windows for Jungle Cars


     The creator in the early 1970s of what may have been the
world's first fully functioning system of corporate electronic
mail, Bookey was quick to foresee this radical shift from person-
to-person to computer-to-computer communications.  Pursuing his
vision of networks, Bookey in 1982 spurned a possible job at
Microsoft on the grounds that the company was outfitting cars for
the jungle, a decision that probably cost him several million
dollars.

     Instead, he joined Seafirst Bank in Seattle, where he made
history (in the form of a reference in John Sculley's
autobiography, Odyssey) by pushing the purchase of a thousand
Macintosh computers for bank networks at a crucial time for
Apple.

     In 1986 Bookey left the bank to join Doelz Co., a startup in
Irvine, Calif., that built advanced computer network equipment
that he had used at Seafirst.  For Doelz, Bookey designed
software and spearheaded marketing.  A so-called cell-based
network, the Doelz system broke up a stream of data into short,
equal-sized packets, each with its own address, to be sent
through the nodes of the net in nanoseconds, like letters
accelerated a trillionfold through the branches of the post
office.

     Bookey was not necessarily wrong in choosing this technology
over Microsoft's.  In the form of asynchronous transfer mode
(ATM) systems, this essential approach, based on short, uniform
packets that can be switched at gigabit speeds in hardware, is
now the rage of planners in the computer networking industry.

     ATM is seen as the crucial enabler for digital networks
combining voice, data and video in so-called multimedia
applications.  Bill Gates now calls multimedia the future of his
industry.  Although many observers still see ATM as a futuristic
technology, Bookey believes its future is nearly now.  From the
humblest personal digital phone to the most advanced
supercomputer, computer-to-computer links will dominate the
entire universe of telecommunications, and ATM will dominate
network switching.

     Doelz, however, was ahead of its time and failed to survive
a tangled legal imbroglio with AT&T in 1988.  So Bookey took a
big profit on his California residence and returned with his wife
Robin and daughter Erin to Seattle, where he had grown up and set
records in the mile on the track at the University of Washington.
He bought his dream house on the top of Cougar Mountain in
Issaquah, with a view of the very Twin Peaks made famous in the
television series and put out his shingle as a network consultant
under the name Digital Network Architects (DNA).  Almost as an
afterthought, the Bookeys sent Erin to Issaquah Middle School.

     Having designed networks around the world, Bookey had often
seen their powerful impact on business organizations, such as
banks.  Bookey believed that networks could have a similar
revitalizing impact on schools.  Like banks, schools are
essentially information systems that have brought their
Industrial Age hierarchy into the Information Age.

     Creating networks in schools, however, posed many special
problems.  Most school systems, like Issaquah, were largely
unaccustomed to managing technology.  The system would need to
create a large MIS (management information services) organization
just to keep the network functioning.  Then, as the teachers at
Issaquah hastened to point out to Bookey, there was the problem
of students.  Impulsive, mischievous and messy, they in no way
resembled the disciplined employees of a corporation.  Speaking
from grim experience, some of the teachers told Bookey that his
network plans would succeed only if the computers were reserved
exclusively for teachers and if students were barred entirely.

     Bookey, however, thought there had to be a way to bring the
magic of networks to America's increasingly troubled school
systems.  The secret would be to recognize that, just as
computers are not consumers of but contributors to bandwidth,
students should be seen not as a problem, but as a precious
resource in launching the networks that inform the Information
Age.



Networks as Productivity Engines


     Ever since Adam Smith first maintained that the division of
labor, the spread of specialization, is the catalyst of the
wealth of nations, economists have seen the breakdown of
functions into subfunctions and specialties as the driver of
efficiency and growth.  The key force expanding specialization in
the contemporary capitalist economy is networks.  Indeed,
networks, by their nature and purpose, refine the division of
labor.

     In the financial industry, for example, networks allowed the
proliferation of specialized institutions.  In the ever-shifting
kaleidoscopes of American finance, some institutions went local,
some global.  Some managed car loans, credit cards or other
consumer services; some handled mortgages, mutual funds or real
estate trusts; still others stressed computer leases, junk bonds,
venture capital or large corporate accounts.

     The pell-mell fragmentation of American finance during the
1980s into an ever more refined division of labor enabled the
U.S. to lead the world in levels of capital efficiency, with more
economic growth per dollar of savings than any other country.
Each financial business did not have to repeat all the work of
all the rest, and each became more efficient at a particular
task.

     Bookey believes that networks can have a similar effect on
that other great information-processing industry: education.  Why
should every school have an all-purpose library and a French
teacher and a calculus scholar and a health center and an
administrative office?  Why should every school have an entire
complement of buildings?

     With all the schools on networks, individual schools could
specialize in particular subjects, functions and resources, as
financial companies do.  Education would not have to happen
exclusively, or even mostly, in schools.  The explosive spread of
networks is now the prime mover of the U.S. economy, allowing all
industries to break down into patterns of specialization unbound
by place and time.  And now the government wants to get into the
act.



Superhighways in the Sky


     Zoom through tax-hike tollgates and glide out onto data
superhighways; this is the new mantra of American industrial
policy.  Add the further fillip of investment for educational
infrastructure and you can sweep up the ramp toward the federal
treasury and drive out with a bonanza.

     In this new era of the big bands, there are now some 10
bills before Congress to foster vast new networks with large
bandwidth, or communications capacity.  Some $2 billion has
already been authorized and $765 million appropriated this year
for various programs related to a National Research and
Educational Network (NREN).

     Candidate Bill Clinton presented the concept of NREN as Ra
national information network to link every home, business, lab,
classroom and library by the year 2015.  President Bill Clinton,
vice-president Albert Gore and a raft of advisors all celebrate
the highway as the metaphor for the future information economy.
Gore points out that his father was a leader in building the
Interstate Highway System in the early 1950s; Albert Jr., wants
to play a key role in building the information highways of the
1990s.

     Indeed, data superhighways would seem to be the fulfillment
of the fibersphere; the way to create the vast new infrastructure
of fiber-optic lines that will bring the full promise of digital
video and multimedia communications to all citizens.

     Why, then, is Mike Bookey so worried?  He would seem to be
the perfect NREN champion.  Bookey has pursued networks through
most of his career and now is focusing on networks for education.
In explaining the importance of computer connections, he has even
long used Gore's favored highway metaphor.  Bookey thinks that
the federal superhighwaymen do not grasp the nature of networks
and how they grow.  In systems work we have a rule: You design
top down, but you build bottom up.

     Bookey sees the creation of networks as an organic process,
driven by public demand, shaped by human needs and rooted in a
moral universe of growth through sharing.  It is the experience
of building the network that creates the expertise to maintain
and use it.  In all these processes, big government is nearly
irrelevant.



None of the Above


     For the past 10 years, Washington, D.C. experts have been
wringing their hands over the supposedly unbearable costs of
building broadband networks and the urgent need for large federal
funding.  Analysts have been ruminating over the question of who
would spearhead the creation of broadband nets; the phone
companies, the cable television companies or the government.

     Before any of these forces could act, however, it became
clear that the answer would be none of the above.  The hardest
part of the job was accomplished, with astonishing speed, by
computer and networking companies.  The rest of the work is well
under way, as cable and phone companies adopt the computer
technologies.

     As recently as 1989, only seven percent of America's
personal computers were connected to local area networks.  By
1991 45 percent were connected, and by 1993, close to two-thirds
were linked to LANs.  Growing even faster than LANs is the
internetworking business: the interconnection of existing local
area nets in wide area networks.

     Building internetworking gear or accessories, such companies
as Cisco Systems, Cabletron, Wellfleet, 3Com and SynOptics are
among the highest flyers in the technology stock market boom.
Cisco, for example, is growing some 50 percent a year and
commands a market value of almost $6 billion, comparable to that
of Digital Equipment Corp.  Cabletron has hiked its revenues some
16-fold in the last five years.

     Most of these connections run at some 10 megabits per
second, enough for high-resolution digital video, but inadequate
for the more exotic traffic in images predicted for use later in
the decade.  Increasingly, however, the connections are fiber-
optic lines or are broadband coax, which is nearly as good as
fiber for short-distance transport.  The potential of fiber is
almost unlimited (see "Into the Fibersphere," Forbes ASAP,
December 7, 1992).

     Although moving more slowly than the computer firms,
telephone and cable companies are rushing to lay fiber ever
deeper into the nation's neighborhoods.  Spending some $2 billion
(as much as NREN), Telecommunications Inc. (TCI) vows, according
to CEO John Malone, to have 90 percent of its subscriber
households served by fiber to the curb by 1995.

     Bringing fiber into the local loop at a slower pace, the
telephone companies, led by Bell Atlantic, also are forging ahead
with ingenious new ways to make their twisted-pair copper
connections carry as much as six megabits per second of digital
information.  Wireless technology is also moving into the local
loop for video delivery (see "The New Rule of Wireless," Forbes
ASAP, March 29, 1993).

     The U.S. networking industry is not in need of fixing.  The
U.S. currently commands some three-fourths of all the world's
LANs and perhaps 85 percent of its internetworks.  Although Gore
and others justify their industrial policies by referring to the
imperious plans of Japan, the U.S. currently commands about three
times the computer power per capita as Japan, some 10 times as
many computers attached to networks, and an installed base of
broadband fiber and cable nearly 10 times as large.  The
remarkable thing is that the U.S. government is so eager to fix a
fabulously flourishing system that is the envy of the world.

     The electronic and photonic networking industries actually
resemble highways in only the most superficial way.  The highway
construction trade has not advanced substantially in 50 years.
By contrast, the networking trade is the fastest-moving part of
the ever-accelerating computer industry and doubles its cost-
effectiveness every year.  Although interconnecting government
laboratories, contractors and supercomputer centers with fiber is
desirable, a massive government network is not.  Issaquah offers
better guidance for the future....  But first it will be
necessary to deal with the abiding menace of the student problem.



Overcoming the Student Problem


     "What do you think you are doing?  Answer me," the voice
insisted with the I've-got-you-squirming-now confidence of a
teacher who has caught a pupil red-handed.

     "Just lookin' around," grumbled Lee Dumas, the red-headed 13-
year-old, trying to sound natural.  Glimpsing a telltale red
screen of network management among the array of blue displays
used in the keyboarding class, the teacher had walked up silently
behind Dumas as he broke into the student lists, software
programs and grades, and was on the verge of entering the
administrative server.

     Dumas was a bad kid.  No one at Maywood Middle School (one
of the 16 campuses in Issaquah) doubted that.  His teachers
called him "obnoxious" or even "brain-dead."  He set what he
believes was an all-time record at Maywood by being detained
after class some 60 times for insubordination.  Using the
approved psychobabble, he says, "I had problems with authority.
I couldn't accept teachers ordering me around."

     After being caught breaking into the computer system, Dumas
was dragged up to the principal's office.  Neither the teacher
nor the principal could figure out the nature of the crime or
judge its seriousness.  For help, they summoned Don Robertson,
the administrator assigned to Issaquah's Technology Information
Project (TIP).  He considered the situation gravely and
recommended severe punishment.  Toward the end of the meeting,
however, he turned to Dumas and said, "With your talent, you
should become the sheriff rather than the outlaw.  Why don't you
come down and join TIP?"  Since no one had previously detected
any talent in Dumas, this comment made a sharp impression.

     About a week later, he showed up sheepishly at Robertson's
door.  To school administrators, kids like Dumas might be a
problem, but to Bookey, Issaquah's 9,000 students seemed a
wonderfully cheap resource.  By training the students to build
and maintain the networks, he could make the $2.7 million the
foundation of an enduring educational resource.

     In the end, the Issaquah network was almost entirely built
by students between the ages of 12 and 17.  Using students to
solve the problems of network maintenance and support and thus
reduce the real costs by some 80 percent was Mike Bookey's
solution to the perplexing problem of computers in schools.

     The first step in the Issaquah networking venture, in the
spring of 1990, cost no money and arose from pure necessity.
Just as in businesses across the country, the initial motive for
networking was the arrival of laser printers from Hewlett
Packard.  Bookey began by giving his 10-person TIP team a pile of
manuals and having them install a basic network connecting two
PCs, an Apple II and a Macintosh to a laser printer.  This step
enhanced the value of all the computers at a small fraction of
the cost of buying new dot-matrix printers for each.  Four of the
ten students managed to cobble together the network in about a
month.  They learned the intricacies of pulling twisted-pair
wiring for 10baseT Ethernet computer connections running at the
standard rate of 10 million bits (megabits) per second.

     The next step was to add a hard disk containing school files
and software programs.  Using both Apples and IBM PCs, the
Issaquah network from the beginning, had to handle a variety of
communications protocols.  If the network was to connect to
anything outside itself to the school's administration building
or the school system's libraries, for example, Issaquah would
have to install equipment that could sort out messages from
different computers.  This meant Issaquah joined the market for
multiprotocol routers.  A router is a device that sits on a
computer network and reads the addresses on all the message
packets that pass by.  If the address is on another network with
a different protocol, the router creates a new envelope for the
packet and sends it to the other network.

     Nonetheless, with all their routers and Ethernet wiring, the
Issaquah networks slowed to a crawl as soon as they had to
connect outside a building.  There, they had to depend on what is
known as the Public Switched Telephone Network, where everything
turns to analog and drowses down to some 2,400 bits per second.

     Bookey demonstrated that the school could save money on its
voice communications by buying a digital T-1 line that
multiplexes 24 phone circuits onto a 1.544-megabit-per-second
system.  Since 12 of the 24 circuits would be enough to satisfy
the school's internal voice needs, the rest of the T-1 line, some
760 kilobits per second, could be devoted to the data
communications needs created by the school's new Ethernets.
Thus, while getting a cheaper solution for its voice traffic, the
school increased its data bandwidth by some sevenfold for free.

     Once these connections were in place, the students acquired
a Microsoft Mail program to incorporate E-mail in the system.
Soon, this became the heart of the network, with both students
and teachers using it constantly to handle papers, consult
teachers in other schools in the system, make reports to the
state and interact with parents and students.  E-mail became so
central to the functioning of Issaquah that when the computers
were down teachers would talk of canceling classes.

     To E-mail were added connections to Internet, the global
research and education network launched some 33 years ago as
DARPA Net (the Pentagon's Defense Advanced Research Projects
Agency).  Since Internet was civilianized in 1983, adopting the
TCP/IP networking standard, it has been expanding its traffic at
a pace of some 15 percent per month.  Between 1981 and 1992 the
number of computers connected to Internet rose from 281 to 1.1
million.  Through Internet, the students could search through a
variety of databases for material for a paper or connect to Japan
for help in learning Japanese.

     Along with several other Issaquah students, Aaron Woodman,
Jr., a burly boy with his long blonde hair in a ponytail, became
so adept at using Internet that he now gives speeches to national
conferences on the subject.  The speechmaking needs that grew out
of the Issaquah project have imparted valuable lessons in English
communications for the students.

     All these developments did not occur without administrative
resistance.  But the administration eventually became a prime
beneficiary.  Soon, the computer networks in the Issaquah system
were connected by a T-1 line to the Washington Schools
Information Processing Cooperative (WSIPC) 20 miles north in
Redmond, where attendance and other student records were kept for
the entire state.

     To make these WSIPC services more readily available to
schools across the state, Bookey proposed the creation of a
statewide educational network running on T-3 lines (45 megabits
per second), now known as WEDNET.  This provides links all over
Washington, from Shaw Island and Stehekin to Seattle and
Issaquah, with a rogue line down to Portland, Oreg.

     As for Lee Dumas, according to his mother, his situation has
changed completely, "both in his attitude toward school and in
the school's attitude toward him."  After joining TIP, Dumas
became one of its most active and enthusiastic members.  Last
summer, he got a job at the Computer Store in Seattle teaching
the Macintosh HyperCard program to a student body consisting,
yes, of public school teachers.  According to Dumas, they had no
problem accepting his authority as a fledgling computer guru.

     No longer one of the outlaws, Dumas became an official beta
tester for the new Microsoft DOS 6.0 and Windows NT operating
systems, specializing in their security procedures.  Following
the path of another student who found the "Issaquah bug" in
Microsoft's LAN Manager program, Dumas believes he found three or
four bugs in NT.

     Having just finished his sophomore year, Dumas has gone to
work this summer at Microsoft for the company's network
development chief, Brian Valentine, who regards this once brain-
dead punk as a valued employee with high promise for the future.
This student who floundered in the usual educational system
flourished when his individual specialization was discovered.
The Issaquah economy released his energies, just as the national
economy releases its own energies through the specialization and
division of labor in computer networks.

     Since there are millions of Lee Dumases in the schools of
America, many of them being given up for lost by analysts such as
Labor Secretary Robert Reich, because they are not adept at the
usual curriculum for "symbolic analysts," Dumas' redemption by
technology bears crucial lessons.  The lessons are Bookey's:
Students are a resource, not a rabble; specialized practical
experience is more edifying than most textbook learning; networks
are the critical technology both for economic growth and for
educational renewal.

     To these insights should be added Lewis Perelman's view, in
his book "School's Out" (1992, Morrow), that teachers should
increasingly abandon their role as a "sage on the stage" in favor
of service as a "guide on the side," steering their students
through a global cornucopia of educational resources.



Education as a Network Driver


     It may seem peculiar that Bookey, a network guru for large
corporations like U.S. West, should focus his attentions on such
problems as interconnecting school children in Issaquah with
libraries in Bellevue, parents on Squaw Mountain, teachers across
town and administrators at the Washington State Information
Processing Cooperative.  Yet Bookey believes that the educational
application may well drive the creation of a true national
infrastructure of digital networks.

     The networking problems of schools closely resemble the
networking problems of a nation full of diverse systems.  To
achieve their full promise, school networks must link computers
of many varieties owned by parents, students and teachers, to
administrative servers owned by state and local governments, to
printers, libraries and databases.  School networks must connect
LANs to IBM SNA (Systems Network Architecture) links, to a
variety of telephone technologies, from T-1 lines of 1.5 megabits
per second to T-3 lines at 45 megabits per second and, soon, to
ATM switches and other potential gigabit systems.  In all its
dimensions, including an acute financial constraint, this
challenge is altogether as difficult as interconnecting
supercomputers over fiber in an NREN.

     Bookey relished this challenge at Issaquah.  Advocates of
NREN might disparage Issaquah as a relatively low-grade network.
After all, it currently has no fiber outside of the fiber links
in the telephone network that it uses.  Without fiber, the
network will not be able to accommodate collaborative learning in
multimedia forms across the country.  Bookey demurs.  Buying a
fiber-optic network before personal computer technology can
manage broadband flows of data is premature.  In five years,
fiber-optic links will probably cost about one-fifth of what they
cost today.  When the network is needed, Issaquah will be able to
purchase it and, more important, also use it.  Moreover, TCI
recently offered to install fiber throughout the Issaquah school
system for nothing as part of its general program of fiber to the
curb.

     The fact is that big-band technology will come to Issaquah
in due course, with or without NREN money.  Critics, of course,
will carp that Issaquah is a special case "a relatively rich
community" that could afford to levy $2.7 million for technology.
Yet the Issaquah example is galvanizing schools across the state
of Washington and even in California and Arkansas, where Bookey
and his colleague Mason Conner have been consulting with
education officials.  Emulating Issaquah, other districts in
Washington have since raised some $140 million for network
ventures.



Glass Ceiling for Networks?


     The lesson of Issaquah is that data highways and
superhighways, driven by the convergence of microcosm and
telecosm, are indeed emerging in America, and at an astonishing
pace.  They already are revitalizing the economy and society, and
are helping to reform the system of education.  The only federal
initiatives that will significantly assist the process are lower
taxes, accommodation of Internet growth and use, and further
deregulation of telecommunications.  Communication must begin
locally, with access to the community.  From these local roots
can emerge the great branching systems that can interconnect an
information economy.

     By starting from the top, the government risks paving over
the pullulating fabric of networking enterprise with a glass
ceiling of expensive and misplaced fiber.  In 1993 an estimated
37 million personal computers will be sold worldwide.  The same
forces that impelled the networks of Issaquah will drive the
owners of these new PCs to interconnect them to other networks
and will induce the owners of the networks to link them together.

     As the centrifugal force of the microcosm, multiplying and
distributing intelligence through the world, converges with the
integrating power of the telecosm, the exponential miracles of
specialization and growth will gain new momentum.  How far can
this spiral reach?  Internet will soon approach some interesting
limits.  According to International Data Group, the number of
users has risen from 9,800 in 1986, all in the United States, to
4.7 million around the world today.

     At this pace, Internet will embrace the entire world
population by the year 2001. That's one limit.  As the system's
trunking backbone rises to 45 megabits per second on T-3 lines
and above, the sky is the limit for the amount of message
traffic.  In the first month after the enlargement to T-3 lines
in October 1992, usage rose from 3.5 trillion bytes to 4 trillion
bytes.  All these networks are dominated by text and still
pictures.  But the miracles of Internet and Issaquah are about to
be joined with a new miracle of growth in digital video
connections in the local loop.



          Bombshell from Time-Warner


     How soon can this happen?  Advocates of NREN speak of this
technology being consummated in 2015.  But to most politicians
and businessmen, a projected date more than five years ahead is
essentially a synonym for never-never land; a way of saying,
"Forget about it. I'll be retired."

     The fact is that a widespread system of two-way broadband
networks reaching most American homes, schools and offices is
less than five years away.  All U.S. business planners must come
to terms with this transforming reality.  Announcements this
spring from leading cable, telephone and computer companies; from
TCI and U.S. West to IBM and Silicon Graphics; bring the shape of
this network into clear focus.

     Exemplary among plans announced by a variety of firms is
Time-Warner's projected system in Orlando.  As described by Jim
Chiddix, the company's college-dropout technical guru, the Time-
Warner showcase venture will be a giant client/server computer
network, suggestive of the arrangements now ubiquitous in
corporate computing.  The wires will be a combination of fiber to
the curb and coax to the home.  Much of the system's hardware and
software will be supplied by computer companies (allegedly
including IBM and Silicon Graphics).  The "client" computers will
be digitized TVs or teleputers linked to powerful database
computers that use a parallel-processing architecture to access
hierarchical memory systems, from DRAM caches to optical disk
archives.  These memories will contain terabytes (trillions of
bytes) of digital video movies, games, educational software and
other programming.

     Perhaps the most dramatic breakthrough, though, will come in
the switches.  While much of the computer and telephone world
continues to dither about the future of ATM (many consigning it
to the pits of 2015), Time-Warner is committed to installing ATM
switches, built by AT&T, beginning next year in Orlando.  The ATM
system will allow Time-Warner to offer telephone, teleputer and
multimedia services together, as soon as the regulators allow it.
Chiddix predicts that ATM will soon gravitate to local area
networks and ultimately become ubiquitous.

     But the most portentous announcements of all have come from
the telephone companies, who have the most to lose from this
cable-oriented network design.  Both U.S. West and Pacific Bell
have disclosed that they are adopting a combination architecture
of fiber and coaxial cable closely resembling the Time-Warner and
TCI projects.  This unexpected action by two leading Baby Bells,
of turning their backs on their millions of miles of twisted-pair
copper wires shows both the boldness of the new telephone company
leadership and the imperious power of this digital technology.

     From all sides the telecommunications and computer
industries are converging on one essential configuration of
advanced parallel-processing hardware, client/server database
software and ATM switching.  As microcosm and telecosm converge
in the living room, with interactive digital video and
supercomputer image processing, the leading edge of the digital
revolution moves from millions of offices toward billions of
homes.  Just as Michael Milken, then of Drexel Burnham Lambert,
and the late William McGowan of MCI in 1983 rescued long-distance
fiber optics from the never-never lands of the year 2015 to which
AT&T had consigned it, John Malone of TCI, Gerald M. Levin of
Time-Warner and Richard D. McCormick of U.S. West in 1993 have
burst open the floodgates for fiber and ATM in the local loop

     Again, the force behind this revolutionary development was
fierce business and technical rivalry in the marketplace.  In the
real world the ruling principle of network development is not
imposed standardization by government but spontaneous order.  It
springs from the interplay of human creativity and
entrepreneurship with the inexorable laws of physics and
technology.

     These dynamics of interconnection in the Information Age
will continue well into the next century.  The microcosm will
yield chips containing billions of transistors, equivalent to
scores of supercomputers on single slivers of silicon.  The
telecosm will yield bandwidth exploding into the terahertz of all-
optical networks and the gigahertz of millimeter waves in the
air.

     Provided that rulers and regulators do not stifle this
spiral of opportunity, the human spirit "emancipated and thus
allowed to reach its rarest talents and aspirations" will
continue to amaze the world with heroic surprises.  The Issaquah
miracle of Mike Bookey and Lee Dumas and all the others, and the
continuing miracle of American networks, which was entirely
unexpected by the world, will repeat themselves again and again
in new forms of entrepreneurship and technology.