The wireless medium is coming up in the security world. That is where Layer 1 and 2 security should prove most interesting at this time. An example is the frequency switching schemes that the military and intelligence organizations use being implemented with infrared NICs.
The other thing you could look into is eavesdropping. That is deffinitely classified under the physical layer.
Don't let anyone tell you that fiber optic is secure in any way, it isn't. Give me twenty minutes with a soldering iron, some parts and my trusty schematic notebook and I'll show you how to circumvent Fiber security without downgrading the signal too much.
