Ethernet papa makes Invent Now Hall of Fame

At age 61, Robert "Bob" Metcalfe has led a storied career, but he isn't resting on his laurels just yet.

The engineer-turned entrepreneur-turned columnist/publisher-turned venture capitalist insists his greatest achievement is yet to come. That said, the man who helped invent Ethernet, the most widely used packet switched technology in the world, was honored for his work on that invention this past weekend as he was inducted to the National Inventors Hall of Fame in Akron, Ohio.

The Brooklyn native graduated from the Massachusetts Institute of Technology in 1969 with bachelor's degrees in electrical engineering and management. In 1973, he earned a doctorate from Harvard in computer science, writing his dissertation on packet switching.

He left the East Coast for Silicon Valley, where he landed a job at the famed Xerox Palo Alto Research Center. And it was there, in 1973, that he and Stanford University graduate student Dave Boggs described the concept of Ethernet in an attempt to connect computers to a new laser printer that was being developed.

Five years later, in 1979, Metcalfe founded 3Com, a company that later went public and peaked with a market capitalization in the billions. Metcalfe left 3Com in 1990 and began his third career as publisher of IDG's InfoWorld Publishing Company and an industry pundit. For eight years, he wrote a weekly column that at its height was read by a million readers, Metcalfe claims. It was during this period when Metcalfe made several bold predictions, some of which never came to fruition and still haunt him today.

The secret for getting credit for things is not to claim credit for things. The secret is to make bold predictions that people think are ridiculous and then have them come true.

In 2001, he left the world of media and became a venture capitalist at the Boston firm Polaris Ventures, where he currently works today.

Along the way, Metcalfe has racked up several awards and honors, including the Grace Murray Hopper Award from the Association for Computing Machinery (ACM) in 1980 and the Alexander Graham Bell Medal from the Institute of Electrical and Electronics Engineers (IEEE) in 1988. In 1995, he was elected to the American Academy of Arts and Sciences. In 2003, he won the Marconi International Fellowship and received the National Medal of Technology from President Bush "for leadership in the invention, standardization, and commercialization of Ethernet".

From his office in Boston, Metcalfe chatted with CNET News.com last week to talk about the invention that has made him so famous. He also shared his views on what's troubling the U.S. patent system and the Internet at large. He even took some time to poke fun at himself for some of those infamously bold predictions.

Q: You're being inducted this week into the Invent Now Hall of Fame for inventing Ethernet, which in the 34 years since it's been invented has become the de facto standard in local area networks and generated billions of dollars in revenue. Did you expect it to be such a huge success?
Metcalfe: Of course not; it was invented in a memo I wrote on May 22, 1973. Dave Boggs and I were asked to build it by our colleagues in order to network the world's first personal computers. Our mindset then had more do to with building our own tools.

I believe others shared the four patents you developed describing Ethernet. Who were they and why do you seem to get all the credit?
Metcalfe: I got more credit than I deserved, that is for sure. Success has many fathers. And failure is an orphan. So I look to the predecessors of Ethernet like the ARPAnet packet-switched network from which Ethernet got packet switching and the Aloha packet radio network from which Ethernet got randomized retransmissions. Those were the predecessors, and I am quick to acknowledge that frequently.

Then there was Dave Boggs. He was a grad student at Stanford. And I was the new member of the research staff at Xerox's Research PARC. I recruited him to help me. So he and I would be the co-inventors, if I were to choose. But the Ethernet patents have four inventors on them: myself, Boggs, Butler Lamson and Chuck Thacker. Butler and Chuck now both work at Microsoft. Dave Boggs is a consultant in Silicon Valley. And I am here at Polaris. I was the principal inventor, so my name appeared first on the patent.

Speaking of patents, a lot of people say the U.S. patent system has gotten out of control. What do you think?
Metcalfe: The patent system will always be broken. It's a very good thing, and it's worth fixing. But it will always be broken because there will always be bad actors hanging around any system trying to game the system.

A big problem was that for 20 years the Patent Office did not issue software patents. It was against the rules. So, for example, when I patented Ethernet I spent a lot of time with Xerox attorneys explaining how you would build Ethernet using hardware, even though we actually built it using a lot of software. But since software was not patentable, we had to express it as a hardware embodiment. And then somewhere along the line, for some reason I don't know, the Patent Office started allowing software patents. That created a big problem, because there was this big gap in the prior art. A lot of patents got issued that shouldn't have been issued, because there is prior art out there that just hasn't been discovered.

Had I been a better person there would be no Cisco today. Were I a better person there would be no Novell today, and the list goes on.

You started 3Com in 1979, and ironically Cisco Systems, not 3Com, is now considered the world leader in Ethernet.
Metcalfe: That's right. Had I been a better person there would be no Cisco today. Were I a better person there would be no Novell today, and the list goes on. 3Com was ahead of a lot of companies, most famously Cisco, and it got passed. But you know that is pretty normal for companies. IBM let DEC get formed. And DEC let Sun get formed. And Sun let Apple get formed. And Apple let Nokia get formed. So there is a lot of precedent for companies getting overtaken from below. So many of my former 3Com buddies work at Cisco now, Cisco being a fine company.

Do you feel bitter about that or disappointed?
Metcalfe: No, there is no bitterness here. I am proud of the company. It's still a substantial company, hundreds of millions of dollars in revenue. It may even be profitable again. I am delighted that the company is still independent and delighted it has done a series of mergers and each time has chosen to keep the name 3Com, which I gave it. So that makes me the founder of this company even though there are a bunch of other people who founded parts of it. But it's funny, they don't get credit for founding their parts of it, because the 3Com named survived.

You seem to get a lot of credit for things.
Metcalfe: Well, I have the knack for it. Some people hate me for that. The secret for getting credit for things is not to claim credit for things. The secret is to make bold predictions that people think are ridiculous and then have them come true. Then you get a lot of credit for that. That is how I have done it. I said a long time ago that Ethernet was going to be a standard someday and guess what? It turned out that way. I wasn't lying.

But some of your other predictions have not come true.
Metcalfe: I wrote a column every week for eight years. That's a lot of predictions. I think my batting average is pretty good actually. But I think I know which one you are referring to.

Yes, I'm talking about the December 1995 InfoWorld column where you said the Internet would suffer a "catastrophic collapse" in 1996. And then after the prediction didn't come true, you ate a copy of your column in front of a live audience.
Metcalfe: That was a huge PR stunt that I am proud of. I got the cover of Barron's. I got coverage everywhere for eating my column in 1997.

But do you think it hurt your credibility?
Metcalfe: I don't think so. Among some idiots, I guess. But I don't care about them. Anyway if you want the full story there is a book about it. I wrote it. It's called Internet Collapses and Other InfoWorld Punditry, and it's still available on Amazon.com. You can buy it for $1.97 used. And it describes what I actually predicted. The problem is most people mischaracterized what I predicted. They say "Metcalfe predicted that the Internet would go away in 1996." Well, I didn't actually say that. They like to position it that way and attack me. I was wrong, and I did eat my column. But I was wrong in a different way than I am generally credited for. Anyway you should read the book if it's at all interesting.

Are there any other doozies in your list of unrealized predictions?
Metcalfe: Oh yeah, there is another one that is even worse than that. In 1993, there were various companies touting these little wireless modems that you would hook to your PC. As a pundit responsible for keeping everybody honest, I attacked. And of course, I overdid it. I actually wrote that "wireless PCs will be like pipe-less bathrooms, like port-a-potties. They will be used at rock concerts and construction sites and on vehicles. But in all other cases people will prefer to use pipes or wires." And then I wrote that, "wireless will never work."

Now, you have to understand, wireless was not working at the time. And the modems were bigger than the PCs. I was right to attack the sons of bitches, but I overdid it. I gave a speech at Motorola a couple of weeks ago, and there were nine guys there ready to rub my face into that one. And of course, I had to reach in my pocket and pull out my Motorola phone proving that I prefer to be right than to be consistent.

I have another doozy for you. I also attacked open source. The big mistake I made there was I didn't stop at attacking open source. I went after Linus (Torvalds) himself. And boy, I learned you don't do that. You don't go near Linus. I basically suggested he was being hypocritical going to his company Transmeta, whose software was not open source. So I called him on it. Well every open-source devotee is a vicious e-mail writer. And I got buried in hate mail. It happens to this day.

Has your stance on open-source software changed? Are you still critical?
Metcalfe: Once again there is a certain amount of mischaracterization of what I actually said. And fortunately it is in my book, so people can go and see what I actually said. I didn't say that Windows was better than Linux. I was attacking Microsoft and Linux just as furiously, but of course the Linux people said I was cashing my checks from Microsoft while I was attacking open source. What really annoys them is that I coined the term "open sores," which is just a little too apt, because it really annoys them that whenever they say "open source" it sounds like "open sores." That is really cool that I nailed them on that.

But also two things have changed. I have changed and open source has changed. The open source that I attacked deserved attacking. But it's kind of evolved substantially since then. For example it doesn't mean free software. And it doesn't elevate all those loopy free-software people to the top of the list. But Linux didn't kill Windows and Windows didn't kill Linux, even though they are both deserving of being killed. They are both old, clunky software. And they should be replaced by something slick and new.

But the question remains. Do you end up with better software if you develop it at a rapacious software monopoly? Or do you develop better software if you do it with a ragtag group of amateurs? That question remains.

You mentioned that you have changed too. How?
Metcalfe: Well, I am an investor in a supercomputer company that runs Linux open source. The whole model is based on open source. So I am a big fan of it now.

There has been a lot of talk about Net neutrality over the last year or so. Your contemporary Vint Cerf, who is credited with helping invent the Internet, is a huge supporter of Net neutrality, saying it's important to keep the Internet open. Otherwise, the big Bell phone companies could stifle innovation by controlling the pipes of the Internet. What do you think?
Metcalfe: I'm no fan of the big Bell phone companies. I've been attacking them since 1972. And they are coming back, the bastards. On the other hand, I am not an expert on Net neutrality, I'm sure there are nuances to that issue that I have not bumped into. But I have a hunch that Vint and his intelligentsia may just be alarmist. But that is just a hunch. I haven't really looked at the details, and I wouldn't put it past the Bell system, now refurbished, to be up to no good in Washington, because that is what they are good at.

But you are someone who really understands how the Internet operates. Would it be fair for one of the phone companies to give priority or charge companies a fee for priority on their network?
Metcalfe: Now you have opened a different topic, which is what is wrong with the Internet. It's not necessarily about Net neutrality.

Well, what is wrong with the Internet, in your opinion?
Metcalfe: The network that we have built--that Vint built--is broken. It lacks three things: It lacks security, it lacks economics and it lacks dedicated bandwidth. It's the last point that you've touched on.

Priority isn't good enough. This best-efforts stuff--have you heard that term? It was coined in my Ph.D. dissertation in 1973, I might add. So I am an expert on best efforts. The Internet was originally designed to carry teletype packets across the United States in half a second. But now it's carrying full-length feature films. That is a different thing. So the Internet, in addition to its other two bugs, needs quality-of-service improvements. In particular, it needs to depart from the best-efforts model at its core and allow for the reservation of the bandwidth and not merely priority.

Should the Internet be free to all people at all times equally, network neutral? Or should it be a place where value is exchanged and investments are made and profits are earned? I'm a big fan of the latter model.

The intelligentsia would argue, "Let's just keep what we've been doing for 30 years. We'll just throw bandwidth at it." An excess of bandwidth means you can get away with best efforts, because best efforts will suffice.

But I disagree. I think that we need to have bandwidth reservation and not merely priority. So then go back to network neutrality. You could have these evil Bell people, not to mention the MSOs (cable industry), not to mention the ISPs, who are just as evil as--well I don't want to go too far. Anyway, if they can allocate dedicated bandwidth to their particular properties that would be a major attack on so-called network neutrality.

Once again, I'm not an expert, but my hunch is that isn't really a big problem. In fact, it could be that what we are doing is fixing the economics problem of the Internet. The Internet was developed by grad students who didn't know from money. Still, economics has for some time been invading the Internet. Advertising is the big one now. But eventually we're going to have to pay for things like in a real economy. And what happens in order to have a real economy is that people have to own things and pay for them and buy and sell them.

So network neutrality may be an issue all tangled up in the fixing of the economics of the Internet. And that is an ideological question. Should the Internet be free to all people at all times equally, network neutral? Or should it be a place where value is exchanged and investments are made and profits are earned? I'm a big fan of the latter model.

How do we monetize the Internet? You don't think advertising is enough?
Metcalfe: No it isn't. You also want to have access to content that can't be advertising-supported or government-supported. Content that is not supported by foolish venture capitalists.

At the moment advertising does seem to work pretty well. It's what is paying my salary.
Metcalfe: Yes, but there is a lot of content which is not supportable by advertising. CNET works because there are enough people in the world who buy enough computer equipment that you can influence their purchase decision. And therefore you can get people to advertise there. But there are a lot of things worth talking about that don't influence major amounts of purchasing decisions or are read by people who have no purchasing power at all and therefore, are of no interest to advertisers.

So how do you get that content? You pay for it, like music. Like iTunes, where you are able to get a song by actually paying someone for it. iTunes is not advertising-supported, right? Advertising tends to drive toward the common denominator content. And we complain about that all the time.

You mentioned that security is another major problem with the Internet. Can you explain?
Metcalfe: The network is fragile. We have spam; we have viruses. We have phishing and all sorts of screwy things on the Internet. And that's due to the Internet being insecure at its core. Security and privacy will never be solved. There is always a tradeoff. But the best efforts nature of the Internet goes too far. No one is inspecting source addresses on packets at the very bottom. And therefore packets can pretend to come from places that they didn't come. Or they can pretend that they are from nowhere. So we can't allow that. We have to fix that.

What would you say is your proudest achievement?
Metcalfe: That's a very sensitive topic. I think I haven't done it yet. I'm not dead. It's not over. I'm a mere 61 years old. I plan to live forever so the thing I hope to be remembered for hasn't occurred yet. I'm hoping that my mid-life crisis is still ahead. But if you push me, I'd say that Ethernet is good enough. If I were to rest on my laurels, that wouldn't be a bad laurel to rest on. Of course, there is my family, my children. They might want to get mentioned. Of course, they haven't quite succeeded yet. So it's hard for me to be that proud of them. No pressure or anything.

I'm pretty proud of 3Com. I did work on the Internet in ways other than Ethernet, so I take some pride in the entire Internet.

What about your work as a venture capitalist?
Metcalfe: I'm new there. I've only been at it a little over six years. None of my personal investments here at the firm have exited yet, which is what VCs are supposed to do. So I am a couple of accomplishments short of being a complete venture capitalist. I haven't gotten liquid, and I haven't raised money for the firm. And those things are related. So it's way early. Of course, I've got these great companies in my portfolio. I am already proud of them, but I am hoping that they will go on to bigger and better things. And that will be great.