One Sunday morning in spring I took my Airedale terrier puppy, Echo, on a walk from the Capitol Hill neighborhood of Washington, DC, where we live, to the city's downtown district. As we strolled along that infamous haunt of lawyers and lobbyists, K Street, I noticed a plaque commemorating "the first wireless telephone message in the history of the world."
This plaque appears on the K-Street side of the Franklin
School at 925 13th St NW in Washington, DC.
The plaque intrigued me. I had written about Charles Kao's share of the 2009 Nobel Prize in Physics for developing and promoting fiber-optic telecommunication, so I knew about attempts in the 1960s to use lasers to transmit information long distances through air and down pipes. But Alexander Graham Bell's precursor was unfamiliar to me.
My ignorance of what Bell called the photophone is hardly widespread. In fact, besides the inevitable Wikipedia entry, I also found this YouTube video in which Dean Segovis of Hack A Week explains how you can make your own photophone.
Nowadays, the word "wireless" usually connotes Wi-Fi, a technology and associated standards for short-range telecommunication. The range limit isn't intrinsic. Radio waves in the same few-gigahertz waveband as Wi-Fi are also used to communicate with Earth-orbiting spacecraft. Now, thanks to a fascinating article by Jerry Adler in this month's Wired magazine, I know of another use for that waveband: transmitting financial information to gain an edge in high-frequency trading (HFT).
Raging bulls
As Adler explains, HFT exploits tiny, fleeting differences in share prices that are identified by computer algorithms and acted on by automatic trading programs. The practice is possible and profitable, thanks to fast, high-capacity fiber-optic cables to transmit the information, fast computers to make the calculations, and quantitative analysts or "quants" to devise the algorithms.
Milliseconds matter in HFT, which is why the trading company McKay Brothers (to be followed soon by its rival Tradeworx) has built strings of radio towers to ferry financial information between the stock exchanges of New York City and the futures markets of Chicago. As you might expect, fiber-optic cables already connect the two cities, but those cables follow a path whose twists and turns, like those of I-80, add distance and time. By contrast, the radio towers transmit information along a path that's close to an ideal great circle. The time saved for the round trip: about 5 milliseconds.
Physics features quite a bit in Adler's article—and not just in the context of current technology. It turns out that some HFT quants were disappointed that neutrinos don't in fact travel faster than light, a shortcoming that deprived them of a means to perform even faster trades. On the other hand, neutrinos' established ability to travel right through Earth could conceivably be exploited for faster transcontinental communication. "Buy neutrinos" is Adler's not-quite-serious conclusion.
