The Internet and Industry: New Book Describes the History of the Communications Industry

[The historical development of the communications industry is presented here in a review by David Leonhardt.  What seems especially valuable is the author's recognition of the interplay of government and industry, the privatization of all things communicable. The author concludes by saying: "The Internet, to take one example, may now be the world’s communications network. But it started as a Defense Department project. As “The Master Switch” artfully shows, the government often has a role that no company will play on its own."   - Lew Rosenbaum]

 

From Hobby to Industry

By DAVID LEONHARDT
Published: December 10, 2010

Shortly after the United States developed the first atomic bomb, J. Robert Oppenheimer realized the country would need a new kind of weapons laboratory. This lab would maintain and improve the military’s arsenal rather than create new weapons. It would be called Sandia National Laboratories and placed not far from Los Alamos.

Illustration by Harry Campbell  THE MASTER SWITCH
The Rise and Fall of Information Empires

By Tim Wu
366 pp. Alfred A. Knopf. $27.95

Initially, the University of California ran the lab, but President Truman soon decided to transfer its operation to the entity he thought could best run it during the nascent cold war: AT&T. “In my opinion,” Truman wrote to an AT&T subsidiary in 1949, “you have here an opportunity to render an exceptional service in the national interest.” AT&T ended up running Sandia until the early 1990s.

It was one of the more extraordinary instances of Ma Bell’s involvement with Uncle Sam. The company owed its very existence to a favorable federal patent ruling in 1878, which saved it from an early death at the hands of Western Union, the dominant telegraph company then trying to crush its new rival. A little more than a century later, Washington broke up AT&T. But regulators soon allowed many of the company’s parts to merge back together. This consolidation, Tim Wu argues in “The Master Switch,” probably allowed the Bush administration to conduct its wiretapping program in secret for so long.

AT&T is the star of Wu’s book, an intellectually ambitious history of modern communications. The organizing principle — only rarely overdrawn — is what Wu, a professor at Columbia Law School, calls “the cycle.” “History shows a typical progression of information technologies,” he writes, “from somebody’s hobby to somebody’s industry; from jury-rigged contraption to slick production marvel; from a freely accessible channel to one strictly controlled by a single corporation or cartel — from open to closed system.” Eventually, entrepreneurs or regulators smash apart the closed system, and the cycle begins anew.

The story covers the history of phones, radio, television, movies and, finally, the Internet. All of these businesses are susceptible to the cycle because all depend on networks, whether they’re composed of cables in the ground or movie theaters around the country. Once a company starts building such a network or gaining control over one, it begins slouching toward monopoly. If the government is not already deeply involved in the business by then (and it usually is), it soon will be.

Wu argues that it has little choice.  [Read more by clicking here]

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