It is the summer of 2018. We have the now approved merger of AT&T and Time-Warner in the US. As well, Apple’s Chinese iCloud service will move to a state-controlled data centre which will in all likelihood be monitored by the Chinese government.

I thought it a good time to revisit Tim Wu’s 2010 classic “The Master Switch: The Rise and Fall of Information Empires” as a backdrop to new information monopolies such as Google and facebook, and to look at the AT&T merger under the lens of an earlier botched merger, that of Time-Warner and America Online back in the 1990’s.

Wu concerns himself with the rise and fall of telephone, radio, television and feature film monopolies and vertical integration. From the origins of the Bell telephone company, RCA in the AM radio bands, and the origins of the film studio system.

His biggest beefs of the monopolists are when they stymie innovation by eating their offspring to protect profits, when they cut into freedom of speech by controlling carriage, and when they consort with government to develop military projects to the detriment of a free marketplace.

He developed the position that while government regulation of monopolies in information and entertainment have provided stopgaps to the unfettered rise of these companies, the tools government used then are in noways adequate to guarantee a level marketplace, freedom of speech, and innovation in the future.

To which I have to say: Bravo! He’s spot on. Even eight years later.

Current US federal regulators have shown insufficient regard for “net neutrality,” a term popularized by Tim Wu in this very book. In this case regulators sided with AT&T that they are under pressure to retain their customers from Google, amazon, and facebook.

Opponents argued that because AT&T controls carriage of the Internet signal through their vast network of cables and towers and satellite transmission, the new merger will give them the power to discern which content provider gets the best broadband access to customers, and now they have a conflict of interest and will favour their own content, the Time-Warner assets.

Many fear their access to the giant Internet services will be beholden to AT&T.

Based on our reading of history, the opponents are right, in my opinion. AT&T was once broken up because it failed to give upstarts the right to compete on a level playing field. Vertical integration in the movie business was likewise reversed by government because it limited choice and indirectly freedom of speech of independent voices in the film business.

But since those times, AT&T reassembled itself during the Nixon, Reagan, Bush, Clinton, and Bush 2 years.

One can’t stop the analysis with Wu’s book only. This should be read in tandem with “The Idea Factory: Bell Labs and the Great Age of American Innovation” by Jon Gertner. In an effort to deal with the enormous technical problems of creating a universal telephone service in the US, the Bell company beginning in the 1900’s ran a kind of skunk-works which developed, and in some cases invented, technologies critical to innovation today: the transistor, the micro-processor, microwave transmission, cellular networks, fibre-optic transmission, satellite transmission, GPS, advanced data switching, and perhaps the one of the greatest inventions of the 20th century: Claude Shannon’s Information Theory.

All this done under the umbrella of protected profits, and mandated by government regulators to license these technologies, in many cases, for next to nothing. Silicon Valley got its start with many of these patents and the professionals who created them. You cannot say that monopolies and vertical integration in the US have not come without some huge benefits.

Are these times so different? Is an AT&T-Time-Warner merger likely to spin off more benefits or a diminished Internet?

One thing that is different about these times is the global reach of the monopolists. A lot of people globally depend on Google and facebook, a fact recently addressed by the European Union in sweeping privacy laws. One could argue that the US owes not only a debt of thanks to EU regulators, but some kind of royalty as a free-rider of EU regulation. Those spanking new EU regulations have undoubtedly affected how the monopolists treat information collected in the US.

If the US continues on its path of America First policies, of dividing its allies, it certainly risks becoming an impotent America, with the President becoming Eunich-in-Chief.

Moreover, there is certainly a false note in AT&T’s assertions that they only want a level playing field to compete with the information monopolists. My recent reading of “Greater Gotham: A History of New York City from 1898 to 1919,” by Mike Wallace reminds us that competition was never a priority of the trusts which arose at the end of the Gilded Age in America and continued into the Progressive era during the Teddy Roosevelt presidency.

Dammit! Competition drove profits DOWN complained J.P. Morgan, Andrew Carnegie, and John Rockefeller. Consolidation helped everybody, or so went the thinking.

Commercial expansion in the US was predicated on the expansion of slavery in the early days, the theft by use of force of the frontier lands, and subversion of the democracy for private interests.

And Peter Nowak’s highly entertaining “Sex, Bombs and Burgers: How War, Porn and Fast Food Created Technology As We Know It” reminds us that so much of technological innovation in the US was driven by the needs of war.

This is their patrimony.

How important is net neutrality going forward? Very important in the short-run, of questionable importance in the long run as the cost of storage, processing, and transmission continue to go down.

New US laws to reign in facebook, amazon, Google/Alphabet, twitter, and Apple will unlikely have the kind of effect regulators seek without international coordination. And this pitiful Congress will never agree on anything, awash as it is in campaign contributions and a corrupt administration.

In some small way, one can not fault the Chinese government with wanting data aggregation companies operating in their country to locate encryption codes inside the Chinese data wall. The Chinese are undoubtedly aggressors in the international data piracy, and yet Edward Snowden’s revelations must have shaken confidence in their sovereignty of their own information assets as well.

Tim Wu did not believe that a 1930’s era regulation framework would work in this era. he advocated a “Separation Principle” which kept ownership of the components of information creation, information transmission, data aggregation separate. “By that I mean,” Wu says, “a regime whose goal is to constrain and divide all power that derives from the control of information.”

He terms it a “constitutional approach” to regulation, not a regulatory approach. He feels that any government intervention is doomed to be subverted the workings of democracy in America today.

I kinda feel that even this progressive take on the regulatory problem is out-dated in an era where the traditional customers of the system are now the inputs of the system, pace facebook.

And I question whether this new merger will be any good for AT&T or Time-Warner any more than the earlier combination of Time-Warner and AOL. It is no longer the producers of content who have control over profits. It is the grand algorithms. That is why hip-hop artists succeed on YouTube and traditional television languishes in a backwater.

Today AT&T is not all that much different from the company that was broken up late in the 20th century. AT&T can roll out TV services for smartphones. They can even give it away for free to their subscribers and favour their transmission over AT&T lines, but I personally think the big money will go elsewhere.

Moreover, “national” or “nationalist” strategies in this environment which ignore regional and local and topical “neighbourhoods” are also doomed to fail. The market is so easily fragmented that large swaths of the public will never accept the legitimacy of national mandates if for no other reason than that neighbourhoods today cross national boundaries like so many blades of grass. ( )

If you work in high tech or work in media this book is an interesting look at the rise and fall of information technologies and companies. Tim Wu takes a look at innovation over the last 100 years starting with the birth of the telephone (and how Western Union missed an opportunity). It explores everything from the Hollywood studio system and the Hayes office to the rise of radio and television all the way through the dot-com era and the rise and fall of monopolies. Throughout the book AT&T plays a figure and appears in several of the stories. Funny--I think of AT&T as my current cell phone carrior and had forgotten their place as the original Bell monopoly (and how that once monopoly has gained a lot of power again. One of the more interesting chapters was the story of the AOL-Time-Warner merger. Most of the books focus on the personalities--but Wu here gives another take on what really went wrong. Wu explores the last century or so to ask the question of whether what is happening now can be predicted by the past. The book ends with Wu's theory on the current battle taking place between Apple (truly an old Hollywood/conglomerate power) and the more open source Google which ultimately remains in danger if a monopoly can come along and turn the switch off. ( )

Fantastic. Really truly good book. It has an amazing (and unknown at least to me) historical look at the rise of information networks. I was expecting a full on treatise for network neutrality, and instead got taken on a most enjoyable journey through the rise of technologies in the last 100 years that essentially made the case for it without even needing to say a word. I couldn't be more convinced "The Cycle" exists as described and that some sort of change and widespread cultural realization is necessary. Following the buildup, Wu hammers home this point succinctly and offers a solution, what more could you ask for.

Great book.

As an added bonus this book puts into words all those feelings that I couldn't elegantly describe about why I think Apple makes great stuff but is overall the worst. ( )

This book is divided into two parts: the first 300 pages, which is a high-level history of how a common cycle of innovation and monopolization has manifested itself in various communication/information industries like radio, movies, television, telephone, cable TV, and the internet. Then there's the last chapter, which is Wu's What Is To Be Done? moment where he suggests a possible regulatory regime that will protect the public interest in these network technologies while still allowing for sufficient innovation and invention.

The history section is about as good as you could expect with such a broad range of industries to cover, with plenty of interesting details about the inventors, entrepreneurs, and CEOs who have battled over control of what we now regard as public infrastructure nearly as essential as roads or sewage. He identifies what he calls the Cycle, common to all network technologies since the telegraph, whereby a small-time inventor comes up with a new gadget that allows people to consume or distribute information (it could be multiple inventors - simultaneous inventions are surprisingly frequent, and the difference in success and fame between an Alexander Bell and an Elisha Grey is often as much a matter of luck or corporate backing as technological merits), threatens an established interest with a stake in an old communications paradigm, and makes the steady climb from plucky underdog to overbearing behemoth until the next game-changing inventor comes from nowhere to challenge the incumbent and start the whole process over again.

Since a large part of my professional career has involved AT&T in one way or another I was anxious to read the story of one of the largest and most entrenched monopolies of all time. Wu delivered an abbreviated but still fascinating account of how what used to be just another company came to be The Phone Company, its quest for "One Policy, One System, Universal Service" on the one hand underwriting the tremendous research of Bell Labs and on the other consolidating more power over people's ability to communicate with each other than any company in history. He also gave great overviews of the stories of companies in the other industries; I particularly enjoyed the sections on the vicious struggles in the movie industry, and though he didn't make the parallels to the modern video game industry that I've discussed with friends in the business it's a great exposition of the nature of cartels and how they can impose censorship as bad or worse as that of a government. All told, the historical part of the book is great, and very convincing in its suggestions that all these related technologies are in some sense destined to undergo Schumpeterian cycles of innovation, disruption, consolidation, and stagnation as new business models supplant old ones.

The controversial part, though, is the final chapter with Wu's attempts to outline how we can protect ourselves from monopolies while still enjoying the fruits of companies which would very much like to be monopolies someday. Designing a good regulatory regime is a classic attempt to square the circle, and Wu himself comes up with many examples in the first part of the book how various agencies like the FCC have been co-opted to serve the interests of the businesses they were supposed to be restraining. Since this problem is of course hardly unique to the telecom industry, it's not really surprising that he ends up proposing a tripartite Separations Principle that's more akin to inflexible rule-based proposals (e.g. a discarded plan in drafts of the Dodd-Frank Act to simply place hard caps on the size of large banks) than discretionary agency-based proposals (e.g. an actual provision in the Dodd-Frank Act to create a Consumer Financial Protection Bureau to police bank actions).

The first part is temporal separation, which means to restrain established players in an industry from devouring infant entrants, as in the Justice Department's battle to prevent Microsoft from crushing Netscape by using the incumbent advantages of Internet Explorer. The second is functional separation, and he gives the example of preventing movie studios from directly owning the theaters that show their films. The third is regulatory separation, which he defines as removing the potential for regulatory capture by giving the government the power only to check private actors, never to aid them. It should go without saying that in the brief form in the book, this Principle seems at a glance to be hopelessly vague and unworkable; let's use Google as an example. What kind of neutral standard would allow for Google to integrate its Android operating system and Chrome browser with its Google TV platform yet forbid AT&T to give affiliated content higher bandwidth priority on its uVerse internet service (i.e. the opposite of net neutrality)? Similarly, a rule to restrict the ability of Disney to morph into the vast entertainment conglomerate it is today would surely also hamper Google's ability to purchase products like Maps or YouTube. And what kind of "check, not aid" actions, if any, should the government take in situations like Google's copyright struggles with publishers over its attempts to broaden its Google Books database?

I'm skeptical that Wu's admirably clear principles could be simply turned into a working and beneficial regulatory scheme. This isn't really his fault given the size of the book compared to the daunting complexity of modern corporations and the fluid nature of boundaries in network technologies, but it's disappointing that such a perceptive critic of monopoly power proposed such underwhelming solutions. He should write a longer book on that subject; I would eagerly read it. ( )

A book about the American media and communications empires. Included the history and where to go from here ( )

A survey of how various information technologies have impacted society and a look at what the future may hold. ( )

Tim Wu does a good job of putting some of our current information age issues in context via this interesting look at the history of communications tech in the US. If there's a weak spot, it's in his recounting of the past ten years of this history -- a period which is a bit too complex and too in-progress to be neatly summarized in a few dozen pages. That aside, he makes a very strong argument for things like net neutrality and the history as he presents it does a solid job of hammering home why he holds the opinions he does. Also: It's easy to forgot that some of the companies we deal with daily today (AT&T, Verizon, for example) have long, long histories and this book does a good job of presenting some of the stuff these guys have been up to lately and putting it in this larger historical context.

Good read! ( )

3.5 stars, a wonderful history of telecommunications empires. I'm not sure I agree with the conclusions Wu draws, but that is probably my technological idealism overpowering reason. ( )

Goes through the modern "information" businesses in the US - telephone, radio, television and film, and internet. A recurrent theme is how upstarts become (power-abusing) empires. The communication network determines who gets heard. Bell vs Gray controversy over the invention of the telephone. The Bell company exploiting its monopoly and sabotaging competitors. Broadcasting and sports. Modern mass media is sometimes accused of weakening local communities, but Wu claims that at least radio had the opposite effect. Tinkering and voluntary sharing important in the early days of radio, but less and less, like internet and computers today. Hollywood censorship code possible to implement because of centralization of power. A second recurrent theme is "the utopia of openness vs the perfection of the closed system." Will today's information giants be different from before? Do not bet on it. ( )

This was was a surprise. The author was patient and took his time building a case for his argument, so the firs 3/4 of the book is a history of telecommunications in the 19th and 20th centuries. Wu shows that the recent history of the Internet, in real and important ways, mirrors the development of telephone, radio, television, film, cable television before.

Wu finds a pattern: innovation leads to disruption, which is then consolidated by industry until the next innovation comes.

Currently, we are in a phase of innovation, but Wu challenges the easy optimism that suggests the powers of consolidation have been defeated forever. Net neutrality and the consolidation of media into single companies poses a threat to openness and innovation.

Highly recommended. ( )

On my list to reread -- Read this in the form of a somewhat scrambled audio book, due to the bother of working around DRM on an ebook I bought. This provided a delightful frisson as I read the book's accounts of other communication medias being taken over and locked down by corporations.

Anyway, I wish I could get everyone involved with say, Debian or Linux or general online free culture to read this. While it can be a bit of a slog in places, it provides a worldview that makes certain corporate maneuverings and ongoing shifts going on right now look very transparent. (Hello Google, Apple, Amazon, etc.) It shows how people trying to do what we're trying to do have failed, and failed, and failed yet again. This is valuable.

I was not fully convinced by its argument that the internet (and, though it doesn't mention it specifically, free software) is no different than radio, tv, telephone, movies, cable. But, as it points out, the wild-eyed visionary ones always think they have something new and world-changing.

Wu's concluding proposal to prevent the cycle he identifies, was also sadly, not to me very convincing. At least, its prospects look unlikely in the US. ( )

As with Nothing to Envy, I should have written this review right after reading the book. It was fantastic, and I'd like to read it again. Great history of the "Information Empires" of the 20th and early 21st century, the continuing tension between openness and control. The history of television seemed particularly instructive: there was no early era of openness; instead Sarnoff (RCA/NBC) manipulated everything he could to make sure that it came out under the exact same control as radio at the time. Found myself kinda wishing for some discussion of Facebook in the closing chapters, in which there was a lot of focus on Apple & Google. It seemed to me that Facebook (or its moral equivalents) are the elephant in the room in that discussion. Very highly recommended. ( )

Very long and dry, however gained many insights. He describes the history of how radio, film, television and telecommunications all started out full of hope and openness with many players only to grow into a closed monopoly of a few until a disruptive technology comes along to change everything. He outlines many ways monopolies and government regulations negatively affected innovation and free enterprise. He then applies the past patterns to the internet. Worth reading for it exposes the darker side of these industries, however almost didn’t finish it due to it being so dry. ( )

The Master Switch by Tim Wu is a fascinating study of the contradictory cycles of information and communication corporations, from creation to their eventual diminishing. The main subject for most of the book is AT&T, which began quite modestly in the laboratory of Alexander Graham Bell and over time grew to ruthlessly dominate the industry it created.

In addition to the phone, this book takes us on a tour of the 20th century through the invention and developments of radio, film and television. And ultimately, the internet. In many ways the internet is changing (and challenging) the old information empires more drastically than those mediums before it, but it's still too soon to tell what the full historical impact will be.

Wu also proposes a solution to limit the monopolist's inherent need to sabotage the upcoming research and development that threaten their company's power. He describes a kind of constitutional separation of powers, only in this case for businesses.

This isn't light reading, but I recommend this book because it's important to understand some of the darker natures of the information industries that surround us in the 21st century. ( )

Interesting overview of history of AT&T, film, radio, and television, although discussion of recent telecommunications history is blighted by cheap attempts to demonize (e.g., he cites MCI falling into hands of Verizon, when it was Worldcom's fraud and bankruptcy that caused that particular fall). He believes information industries are particularly prone to monopolization, and terms this trend toward monopolization "the Cycle", and argues that government intervention is required to break the cycle. While this appears to be true for many of his examples like film, radio, and the first break up of AT&T, his discussion of local telephony competition is botched because the government intervention to break the monopoly fundamentally didn't work, and he completely ignores the role that real competition in the form of wireless and cable telephony had in demolishing the importance of traditional landline telephony. His extensive historical overview is a build up to a discussion of the internet, in which he focuses on Apple versus Google, with Apple representing a closed system and Google representing an open system. While the cautionary message certainly has merit given the tremendous importance of the Internet to our society, his proposed solution - allowing no vertical integration in information industries is poorly argued, and is awkwardly bolted on to the book. ( )

This excellent book suggests that I might have been wrong. In clear, engaging prose, he offers the histories of a number of communications industries—telegraph, telephone, movies, radio, broadcast TV, cable, and then the internet—arguing that each reveals the influence of a cycle in which an entrenched industry is disrupted by a new technology. The disruption starts with poor quality but innovative products, in contrast to the old technology’s very nicely designed and profitable versions. The threat to the survival of the old models, and the messiness and uncertainty of the new ones, means that government can often be persuaded to intervene on behalf of the old, sometimes delaying them by decades. Wu argues that centralized control produces beautiful products and services, but suppresses free expression and experimentation. He argues that government should intervene, not on behalf of industries, but on behalf of separation—making sure that industries don’t get too big or too vertically integrated to crush the next innovation that comes along. This means net neutrality, but it also means potentially blocking the merger of cable companies with movie studios. There are counterarguments I wish he’d engaged more with—in particular, people often defend consolidation as the only way to save and cross-subsidize things like local newspapers—but it’s a really good read. ( )

I love reading business histories and this one is definitely at the top of my list. Highly readable, superbly organized... I find myself referrencing things I learned from the book constantly. ( )

captivating book -- just started; returned to kate, unfinished, no rating ( )

Superb book, must write a very good blogpost on this book on Blogmania.nl Wu has written a tragic story on the power of arrivals against innovation. It's strange to see how powers in America are working the same as in socialist countries. So long democracy. ( )

This is a great book! Wu gives an historical account of the large communications empires (phone, film, radio), their rise over competition, partnerships with the government to achieve monopoly status and their general strategy and tactics. He then relates those historical cycles with the Internet and provides guidance and warning on how to avoid the stagnation of our "open" progress moving forward. Definitely 5/5 stars ( )