The Twenty Laws of the Telecosm

February 21, 2001 by George Gilder

This excerpt from Telecosm (Free Press/Simon & Shuster) encapsulates futurist George Gilder’s grand vision of the age of the telecosm–in which infinite bandwidth will revolutionize the world.

1) The Law of the Telecosm

Originally published September 2000 as part of Telecosm: How Infinite Bandwidth Will Revolutionize Our World. Published on February 22, 2001.

The value of a network grows by the square of the processing power of all the terminals attached to it. In fact, this is a restatement of Metcalfe’s law (“Network value rises by the square of the number of terminals”). As the power and storewidth of terminals rises, the value of reaching them soars. Internet traffic is a good proxy for this effect. Rising at least a thousand times every five years, the trajectory of traffic indicates that a current Internet company is confronting just one tenth of one percent of its potential volume half a decade hence. This phenomenon impels both the exponentially rising value and the sometimes shocking volatility of investments in the Telecosm.

2) Gilder’s Law

Bandwidth grows at least three times faster than computer power. While computer power doubles every eighteen months (Moore’s law), communications power doubles every six months. This is a rough average; as with Moore’s law, it may take a few years before the pace reaches its natural rate. Practical backbone bandwidth on a single cable is now a thousand times greater than the entire average traffic on the global communications infrastructure five years ago. More information can be sent over a single cable in a second than was sent over the entire Internet in 1997 in a month.

3) The Black Box Law

Networks will become black boxes: dumb pipes, with intelligence spread to the machines at their peripheries. Past networks, including the phone system, have been “smart” and narrowband. Broadband flourishes with the reverse.

4) The Law of Bandwidth Efficiency

Bandwidth usability, measured in digital efficiency, grows roughly by the square of the move up spectrum to higher frequencies. Both wired and wireless communications capacity rises as transmissions move from long wavelengths and low frequencies at the bottom of the spectrum to short wavelengths and high frequencies at the top. In the air, for example, bandwidth has moved from 900 megahertz analog cellular phones to 2 gigahertz digital personal communications systems (PCS) with web access, and to 24 and 38 gigahertz wireless services offering extremely rich links to urban buildings, and finally to TeraBeam’s fiberless optics employing the same frequencies of infrared light now used in fiber.

5) Shannon’s Law

Digital communications efficiency declines as power increases, or, conversely, efficiency increases as power weakens. Increased electrical power means more dispersion and nonlinearity in fiber and more interference in the air. Reducing power expended per bit enables exponentially increasing bitrates. The rise of digital implies a constant preoccupation with reducing the power usage of every component of the information infrastructure. The future of networking lies in small, long-lasting batteries, powering lots of devices, joined together in a massive web.

6) The Bandwidth-Power Identity

A corollary of Shannon’s law is that bandwidth is a replacement for power. With enough bandwidth, communications engineers can simulate any powerful network architecture they please. Optical bandwidth will inexorably drive electronic switches and routers out of the center of the network where they just get in the way of bits and slow them down. In both fiber and air, the expansion of bandwidth geometrically increases communications efficiency. Bandwidth growth comes from using more of the electromagnetic spectrum and less electrical power. The spectrum is essentially infinite.

7) The Glass Mansions Law

In the cities of the world, fiber trumps both copper and the airwaves. Fiber optics is some ten billion times more capacious and reliable than copper or air. Many companies claim to offer “copper optics” or satellites that compete with fiber. But these systems, for all their special advantages of installed base or mobile access or broadcast reach, are not even remotely competitive with fiber for bandwidth. One fiber thread can command a hundred times more bandwidth than all the satellites in the world put together. Satellites will be useful chiefly in rural areas that are too remote from fiber lines.

8) The Yellow Pages Law

The telecosm demands better and better directories, and the companies that produce them will succeed. Bandwidth is created by hardware (optics, etc.), but the networks they enable will need better and better software. Hence, the telecosm opens huge opportunities for clever ways to cache, mirror, replicate, sort, and search for information.

9) The Law of Telecosmic Price Elasticity

One unit decline in bandwidth price yields a five unit rise in demand. Fears of a bandwidth glut are groundless. Bandwidth multiplies its own demand. (As one example, business-to-business bandwidth has been exploding and price per bit plummeting, and business-to-business traffic on UUNet has been doubling every 90 to 120 days.)

10) The Law of Instantaneous Information

This law is a commandment to save time: the companies that save their clients time will profit in the telecosm. Time to market, turnaround time, disk seek and rotate time, time to retirement, network delay time, memory access time all reduce to two key metrics: the speed of light and the span of life. A physical limit and a biological limit, these are the governing scarcities of the information age.

11) The Law of Wasted Bandwidth

The governing abundance of the information age is bandwidth: communications capacity. This law is a commandment to waste bandwidth. The companies that exploit bandwidth recklessly will profit by it.

12) Amdahl’s Law in the Telecosm

A law defined by computer designer Gene Amdahl, known as Amdahl’s law, ordains that system speed is determined by the slowest component in the datapath. Combining this with Drucker’s law (by Peter Drucker) that profits migrate to the supplier of the missing component necessary to complete a system, the conclusion is clear: The missing components today are cheap chips that can operate at optical speeds. Profits will migrate to optical-speed chip makers.

13) The Single-Chip Law

A corollary of the above is that the Telecosm requires single-chip systems. Chips operating at a billion cycles per second simply have no time to go off chip to retrieve instructions and data.

14) The Law of Hand-Held Devices

When bandwidth is infinite, and the network is ubiquitous, digital cellular teleputers prevail. These devices will economize on power and silicon area. Power and silicon were two prime abundances of twentieth-century technology, when power came from outlets in your wall and silicon spread across computer backplanes and mother boards. In the twenty-first century, they are defining scarcities.

15) The Law of Network Computing

In the telecosm, the network becomes the computer. Computers disaggregate across the net and software disaggregates into components on the net.

16) Huber’s Law of Geodesic Networks

Putting together Shannon’s law with the law of bandwidth efficiency produces a vision of the kind of networks that will prevail. As coined by Peter Huber, they are “geodesic”: short-connection, multipoint, dense arrays. The higher the frequency, the shorter the wavelength, the wider the bandwidth, the lower the power, the smaller the antennae, the slimmer the cells, the cheaper and better the bandwidth.

17) The Low-Latency Law of Satellites

Satellites will move from far and fast to low and slow, from the geosynchronous orbit 36,000 kilometers above the earth to far slower low earth orbit paths fifty times closer to the earth. To the geosynchronous orbit, signals take a quarter of a second-a showstopper amount of latency for interactive communications. Bouncing to low-earth orbits and back, signals move fast enough to race photons in fiber.

18) The Law of Television Obsolescence

Television, high powered and low choice, will die. It is rapidly giving way to the Internet’s low-powered bandwidth with myriad choices. A corollary of this law concerns advertising: TV advertisements are not adds; they are minuses. Most Internet banners are not adds either. They will give way to informational and transactional ads that people want. The Internet empowers the customer; in the future companies will not be able to tease or trick their customers into reading their ads.

19) The Law of Journalistic Victory

Profits will migrate toward newspapers and magazines. Unlike television, newspapers already empower their customers. Newspaper readers can read at their own pace and schedule, respond to stories with letters, clip and save desired material, ignore undesired ads, and even advertise themselves in the classified section. All these functions become more effective on the net. It will be much easier for newspapers to acquire web technology and video than for television stations to acquire real news reporting and valuable editorial content.

20) The Law of Conduits and Content

This law comes in the form of a commandment to divorce content from conduit. The less content a network owns the more content flows through it. If you are a content company, you want your content to travel on all networks, not just your own. If you are a conduit company, you want to carry everyone’s content, not restrict yourself to your own. Companies that violate this rule (AU, AOL Time Warner) tear themselves apart. The dumber the network the more intelligence it can carry.