City of Light: The Story of Fiber Optics

190 CITY OF LIGHT
pack of beer. The whole crew won. To show the system was built for the real
world, Cerny handed out photos of a Centel workman guiding the cable into
underground ducts—sitting in a grimy manhole, his hands covered with
greasy black cable lubricant. 67 The brash little company became the first independent
contractor to deliver a working fiber-optic system to a telephone
company.
The young fiber industry was growing explosively. Big cable and telecommunications
companies in America, Europe, and Japan jumped into the field,
worried that they might miss a revolutionary new technology. For a while,
the flood of companies threatened to splinter the market so much that no one
made any money. In one year, sales of fiber-optic connectors rose an impressive
50 percent, but the number of manufacturers tripled, meaning that average
sales per company dropped. 68
Valtec stood at the peak of the wave, struggling to keep its feet. The company
was in an enviable yet dangerous position—the purest stock-market
play in fiber-optic communications. Fiber was only a small part of the billiondollar
Corning Glass Works; it was a minuscule fraction of corporate giants
like AT&T or GTE. Moreover, Godbey shrewdly kept the company growing by
such moves as buying Laser Diode Labs. Sales doubled to about $30 million
in 1977, and Valtec made a $1.3 million profit. 69 However, neither stock
market hype nor Valtec’s manic energy could generate the tons of money it
needed to invest in fiber development. The company needed a partner with
deep pockets, and the logical place to look was in the metal-cable business.
The first candidate was Canada Wire and Cable, which agreed to buy a
small interest in Valtec. However, a close look at Valtec’s business and finances
from the inside convinced Canada Wire it could do better itself, so it
founded its own fiber division called Canstar. 70
Next, Godbey talked to Comm/Scope, a North Carolina company that made
coaxial cable for cable television. The company was profitable, privately held,
and about the same size as Valtec. In size and scope, it looked like a merger
of equals. Valtec brought fibers to the deal; Comm/Scope brought cabling. By
spring 1977, they were jointly developing fiber-optic cables. Later in the year,
they hammered out terms of a merger, in which the publicly held Valtec
technically acquired Comm/Scope in exchange for 38 percent of the stock in
the merged company. 71 Yet when the dust settled in mid-1978, Frank Drendel,
the head of Comm/Scope, was in control as vice chairman and chief
executive officer, with Ted Valpey as chairman. After spending a decade building
the company, Jim Godbey had lost control. The stress hit him hard, and
while attending a cable-television trade show in California he suddenly fell ill.
The next day he was dead of a heart attack at 43, the victim of an unrecognized
heart defect. 72
The merger and a supplementary stock offering gave the fiber program
badly needed money. Valtec hired more people to help Cerny, Dobson, Hudson,
and Randall with the Las Vegas telephone system. However, morale
started slipping after Godbey’s death. Randall left for another company in
1979, after Godbey died. 73 At the start of 1980, Ted Valpey swapped some