Let there be light," a voice said. And there was light. At least there was in part of the telecommunications network backbone-the many-headed beast that delivers our telephone, fax and Internet services. The problem is that fiber optics have thus far been installed in only part of the system. As soon as the light reaches the big network hubs where it is switched, the signal must be converted to electrons. Electronic switches are bulky, expensive and, by the standards of light-speed, slow. But until now, there haven't been any optical switches small and fast enough to replace them. This bottleneck is going to become tighter and tighter as our appetite for big-bandwidth applications such as video-on-demand grows.

It's obvious that whoever develops the first reliable all-optical switch is going to cash in. Which is why Lucent, Nortel, Agilent, Corning and a host of startups are hustling to make optical switches. The first commercial versions are reaching the market now-and the markets are taking notice. The day Agilent unveiled its prototype optical switch, the company's stock rose by 47 percent.