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The Master Switch: The Rise and Fall of Information Empires (2010)

de Tim Wu

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9022023,431 (4.07)5
Business. Computer Technology. Sociology. Nonfiction. HTML:

New Yorker and Fortune Best Book of the Year
"A must-read for all Americans who want to remain the ones deciding what they can read, watch, and listen to.? ??Arianna Huffington
/> Analyzing the strategic maneuvers of today??s great information powers??Apple, Google, and an eerily resurgent AT&T??Tim Wu uncovers a time-honored pattern in which invention begets industry and industry begets empire. 
It is easy to forget that every development in the history of the American information industry??from the telephone to radio to film??once existed in an open and chaotic marketplace inhabited by entrepreneurs and utopians, just as the Internet does today. Each of these, however, grew to be dominated by a monopolist or cartel.
In this pathbreaking book, Tim Wu asks: will the Internet follow the same fate? Could the Web??the entire flow of American information??come to be ruled by a corporate leviathan in possession of "the master switch"? Here, Tim Wu shows how a battle royale for the Internet??s future is brewing, and this is one war we… (més)

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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. ( )
  MylesKesten | Jan 23, 2024 |
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. ( )
  auldhouse | Sep 30, 2021 |
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. ( )
  royragsdale | Sep 22, 2021 |
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. ( )
  aaronarnold | May 11, 2021 |
A book about the American media and communications empires. Included the history and where to go from here ( )
  PDCRead | Apr 6, 2020 |
Es mostren 1-5 de 20 (següent | mostra-les totes)
"let’s cut to the chase—the argument about the future of the Internet. I wasn’t sure whether I agreed or disagreed until I realized Wu is making two different claims, a weak one and a strong one, and does not separate them clearly."

"In summary, Wu deserves major kudos both for the historical treatment and for some very astute insights about the Internet. For example, in the last 2-3 years, Apple, Facebook, and Twitter have all made dramatic moves toward centralization, control and closed platforms. Wu seems to have foreseen this general trend more clearly than most techies did.[1] The book does have drawbacks, and I don’t agree that the Internet will go the way of past monopolies without intervention. It should be very interesting to see what moves Wu will make now that he will be advising the FTC."
afegit per jodi | edita33bits.org, Arvind Narayanan (Mar 23, 2011)
 

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Business. Computer Technology. Sociology. Nonfiction. HTML:

New Yorker and Fortune Best Book of the Year
"A must-read for all Americans who want to remain the ones deciding what they can read, watch, and listen to.? ??Arianna Huffington
Analyzing the strategic maneuvers of today??s great information powers??Apple, Google, and an eerily resurgent AT&T??Tim Wu uncovers a time-honored pattern in which invention begets industry and industry begets empire. 
It is easy to forget that every development in the history of the American information industry??from the telephone to radio to film??once existed in an open and chaotic marketplace inhabited by entrepreneurs and utopians, just as the Internet does today. Each of these, however, grew to be dominated by a monopolist or cartel.
In this pathbreaking book, Tim Wu asks: will the Internet follow the same fate? Could the Web??the entire flow of American information??come to be ruled by a corporate leviathan in possession of "the master switch"? Here, Tim Wu shows how a battle royale for the Internet??s future is brewing, and this is one war we

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