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The Master Switch: The Rise and Fall of Information Empires

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A secret history of the industrial wars behind the rise and fall of the twentieth century’s great information empires—Hollywood, the broadcast networks, and AT&T—asking one big question: Could history repeat itself, with one giant entity taking control of American information?

Most consider the Internet Age to be a moment of unprecedented freedom in communications and culture. But as Tim Wu shows, each major new medium, from telephone to cable, arrived on a similar wave of idealistic optimism only to become, eventually, the object of industrial consolidation profoundly affecting how Americans communicate. Every once free and open technology was in time centralized and closed, a huge corporate power taking control of the “master switch.” Today, as a similar struggle looms over the Internet, increasingly the pipeline of all other media, the stakes have never been higher. To be decided: who gets heard, and what kind of country we live in.

Part industrial exposé, part meditation on the nature of freedom of expression, part battle cry to save the Internet’s best features, The Master Switch brings to light a crucial drama—rife with indelible characters and stories—heretofore played out over decades in the shadows of our national life.

380 pages, Kindle Edition

First published January 1, 2010

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About the author

Tim Wu

13 books778 followers
Tim Wu is an author, a professor at Columbia Law School, and a contributing writer for the New York Times.. He has written about technology in numerous publications, and coined the phrase "net neutrality."

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Displaying 1 - 30 of 464 reviews
Profile Image for Mario the lone bookwolf.
763 reviews3,493 followers
November 23, 2019
I believed in the power and existence of the master switch long before the publishing of this book, because many future timelines by many famous Sci-Fi authors point in this direction and because it is a logical and to a certain extent necessary step for both government and industry.

We are not at the end of history, but probably at the end of new ways to control the information highways. Augmented reality, virtual reality and invasive techniques to participate better and more efficient all won´t change the fact that there will always be an underlying network, internet, LAN, intelligent tree roots or whatever that connect the participants. There will be standards and competitors and the best product will be used by most customers.

One can argue if it is good or bad if all this power lies in the hands of a few people, but in a democratic state the control of all content to avoid extremism up to a dictatorship is something simply necessary and the line between too much and too less censorship is so thin and difficult to draw that it may be good that machines will do the job. Probably they are more objective and less prone do party principles and so the endless circle of corruption between lobbyists, government and dominating industries will go on forever even more efficient.

Former industries fell because they are, compared to today's standard, inflexible and unilateral, not so say boring. Just radio, just a rigid TV program, just an offline PC game, come on. Not as if TV- and radio stations, news corporations, etc. would learn from the past and try to modernize themselves. Even if they would really want to, they would have to cannibalize themselves, because their push media program without active user participation is oldfashioned. If they would change, the whole subvention circle and political interests in official, state-owned propaganda stations would collapse and the information monopoly would have to be reconsidered. They would have to allow active evaluation by users and let people produce critical, true content, to them better-known as fake news. Pest or cholera, they lose whatever they do.

And there are antitrust laws, the youth has the best potential to connect and act together, old ideas become more and more ridiculous and pathetic and the human participation in important decisions becomes less and less. And for me, as a friendly technocratic science adorer, this ist the most important point. Automate everything and if someone has a problem with it, give her/him a history book.

Sure there are some ideas to democratize the whole internet, open-source, sharing economy, creative commons, etc. But a national and global standard, infrastructure and supervisory authority will always be needed to let the whole system run and fix problems. I am a proponent of democratic and social innovations and a fairer economic system, but I also see the importance of a master administrator with different kill switches.

And one must be realistic, each free and great idea gets commercialized in a certain amount of time and the only viable option is to make the best compromise between civil society and big money. Net neutrality and transparency must be prioritized with the help of techniques like open government and blockchain technology or the worst possible moloch, as seen in China, may arise. An indestructible super behemoth, with tentacles like an app as WeChat https://de.wikipedia.org/wiki/WeChat
that combines the worst mixture of totalitarian and turbocapitalistic ideas together and forces everyone to use it for daily life.

A wiki walk can be as refreshing to the mind as a walk through nature in this, yuck, ugh, boo, completely overrated real-life outside books:
Profile Image for Atila Iamarino.
411 reviews4,362 followers
December 30, 2016
Um livro que foi escrito em 2011 e ainda é completamente atual. Tim Wu é professor de direito em Columbia e estuda a relação com informação e tecnologia. Já vi a expressão net neutrality atribuída a ele.

O livro todo é um argumento muito bem apresentado em favor da neutralidade da rede e da importância de não se deixar que interesses específicos de alguma corporação (entre as maiores candidatas ele cita a AT&T) escolha o que circula ou não na web. Começa com uma história de como surgiram e cresceram os monopólios de mídia nos EUA, começando pelo telefone e passando pelo cinema, rádio e TV.

Já conhecia a importância do Bell Labs e algumas das grandes descobertas que vieram de lá. O que não sabia e Tim Wu ressalta é que várias tecnologias como fitas magnéticas para gravar informação também foram desenvolvidas lá décadas antes do que conhecemos, mas destruídas ou deixadas de lado porque ameaçavam o modelo de negócios da Bell. Também não fazia ideia do jogo sujo que estava por trás do desenvolvimento do rádio FM ou da TV e porque essas mídias viraram sistemas de broadcasting com poucos produzindo e muitos consumindo.

Sua explicação sobre como a verticalização da indústria (controle da produção à distribuição) e o monopólio facilitam censura e atrasam o desenvolvimento de muita coisa é impressionante. E termina com uma discussão sobre o que está se passando com a Apple e o Google controlando (ou não) o que consumimos nos computadores modernos, os celulares. Só senti falta do Facebook na discussão, mas o timing do livro (2011) não ajuda nesse sentido.

Tranquilamente um dos melhores livros que vi no ano e um dos com ideias de maior consequência. Recomendo muito a qualquer um que usa a internet.
Profile Image for Elaine Nelson.
285 reviews35 followers
September 30, 2013
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.
Profile Image for Manu.
353 reviews48 followers
May 26, 2018
Two of my favourite books in the recent past have been The Moral Animal and The Sovereign Individual. I liked them because they brought out the fundamental patterns that underlie the evolution and behaviour of humans and the system of the world respectively. The Master Switch does the same with communication and information empires.
His premise is this - history has shown that communication/information technologies follow a predictable path : it starts as an idea in a mind/group of minds typically in a small room, is then brought to life in the most rudimentary manner, and keeps itself open to improvements and changes until it becomes a solid proposition. It then shifts to industrial scale, predictable outputs, and controlled by a corporation which then decides to make it a closed system. He calls this the Cycle.
The author's contention is that all information businesses go through the cycle. The question he seeks to answer is "which is mightier : the radicalism of the Internet or the inevitability of the Cycle?" He gets there by taking us through the history of information empires.
The story begins in the 1870s, when Alexander Graham Bell's small telephone company goes up against the ruler of the times - Western Union. A classic underdog story that resulted in the continuing empire that is called AT&T. Is At&T still the hero? Will get to that in a bit. Similar stories with its own heroes and villains then play across radio (AM & FM), television, movies and now, the internet.
It is not just the magnificent scope that makes the book interesting. The author retells history in the mould of a thriller! There are anecdotes and (not so) trivia that make the book really engaging. Multiple inventors of the same technology (and uncredited firsts), towering personalities from JP Morgan to Steve Jobs who left a firm imprint, fascinating origin stories of movie studios like Universal and Warner that are now household names and how movie making is now less to do with the movie and more to do with the business of the franchise (a movie is a 2 hour advertisement of an intellectual property which makes money through a franchise that sells everything from tshirts to DVDs to theme parks), companies that rise again like phoenixes in revenge arcs that span a century (GE buying Universal)!
The author obviously does not give a definitive answer to whether the Internet will beat the Cycle. He suggests a constitutional approach (not regulatory) and a “Separations Principle” to make sure that the ownership of information creation, distribution (networks, infrastructure) and access control remains with different parties to prevent it from corporate or governmental misuse. The nuance he highlights is that the monopoly actually begins and even continues with noble intentions and utopian values, but loses the plot subsequently. Almost like "you either die a hero or live long enough to see yourself become the villain." (Remember the question earlier about AT&T)
He also points out (and this is where it meets The Sovereign Individual) that the user has the power to control how this plays out - "Habits shape markets far more powerfully than laws".
A fantastic read on multiple counts!
Profile Image for Mehrsa.
2,234 reviews3,659 followers
December 7, 2019
I started this a while back, got half way, and then moved on to his other books. So I started it again and read it all the way through and I'm so glad I did. This book is a fascinating history of monopoly power--how it was built and how it shaped modern media, the internet, AT&T, etc. It's just as relevant now as when it was written.
Profile Image for Irina slutsky.
21 reviews44 followers
Currently reading
November 5, 2010
by Irina Slutsky
SAN FRANCISCO (AdAge.com) -- Regular readers of Ad Age know that the companies that control the internet are, if not obsessed, then very concerned with the topic of network neutrality. Most recently Google and Verizon were the two giants rumored to have a plan to let users pay for faster access. "We already had the payola battle in radio, now this is the payola battle of the internet," said Tim Wu, the man who coined the term "network neutrality."

A Columbia Law school professor, Mr. Wu advised the Obama campaign in 2008 and today published his latest book, "The Master Switch: The Rise and Fall of Information Empires," which traces the histories of the mighty (and once-mighty) AT&T, NBC and Google.

Tim Wu
Currently, the Federal Communications Commission -- in front of which Mr. Wu has testified on numerous occasions -- has put the question of network neutrality on hold until after the midterm elections. Ad Age spoke to Mr. Wu a few days before his official book tour and asked him to frame the history of those empires in terms of advertising and, of course, Facebook.
Ad Age: What is the role of advertising in an information monopoly like AT&T -- or potentially, Verizon and Google?

Mr. Wu: Historically, the major resistance to monopoly comes from high prices. But if you have a monopoly supported by advertising, the price isn't noticed by consumers because the price is distributed. Consumers pay for Google through everything being a bit more expensive. If I type "dentist" in Google, and click through to a Google link, the price comes back to me when I pay the dentist. Consumers always pay for everything, but with advertising, it's in an extremely indirect fashion.

Ad Age: What about Facebook?

Mr. Wu: If they charged you money to see all your friends, then they started raising those prices, you would be really mad.

The fact that we think Google and Facebook are free deadens resistance to what would be very objectionable. People pay their phone bills and their cable bills and those prices are under scrutiny because those are consumer-facing bills. But Google and Facebook activity isn't under that much scrutiny.

Ad Age: Is social-media marketing -- typified by buzzwords like "engaging the consumer" -- changing the equation in terms of traditional advertising?

Mr. Wu: Every age thinks it is revolutionary -- in this case we are talking about marketer or advertiser having access to consumers in a new way. But the first television or the first sponsored radio programs, those marketers had the idea that the revolutionary thing was to be inside the American home, that was such a big change! We think Facebook is a big deal but a much bigger deal was an advertiser speaking directly in the living room of a customer when that had never happened before! Prior to that, the home was a sacred place. We think right now everything is changing like never before, but imagine 1920 and how completely shocking that was and what an effect it had on American culture. So I think the changes today are relatively mild. That gives some perspective.

Ad Age: Why do you suppose so many of the information monopolies started in the U.S.?

Mr. Wu: It started with radio in the 1920s and 1930s. England felt it was inappropriate to have advertisements on radio since they wanted to make their citizens into better people through the programming. Germany called radio the spiritual weapon for the totalitarian state. And in the U.S., we decided to collectively let large companies take over the radio -- and their main interest was to turn Americans into consumers.

'The Master Switch'
Ad Age: Now Apple is entering the advertising business with its iAd format. How do you see that changing the milieu?
Mr. Wu: Steve Jobs believes viewing an ad can be an enjoyable and titillating experience. His theory is to treat advertising as another form of content. I'm not sure it will work -- iAds haven't taken off yet, but I understand Jobs' theory. Apple delivers the best content, so they will deliver the best ads, the ones that you want to see because you find them entertaining. But advertising isn't content. Google's theory is all about YOU. Apple's approach is all about "we are the experts."

Ad Age: Where do you see Facebook going? Its consumer dominance hasn't yet been matched by economic dominance.

Mr. Wu: Facebook is trying to figure out who they are right now. They are looking for a role model. Google is the most obvious example as success in advertising. Apple hasn't been successful in advertising. Ideologically, Facebook has to decide if they are going to be an open system like Google or a closed system like Apple.

Ad Age: Who is going to win the battle for control of the TV and, by extension, the TV ad?

Mr. Wu: The big big dog in advertising is television. The ongoing battle is between the phone, the television and the computer -- and the internet brings them all together. Google TV is Google's effort to colonize television. It's incredibly threatening to the established world of advertising. Traditionally monopolists have a lot of money and they are interested in taking over another market. And you can see this in Google -- they are interested in phones and TV. They are challenging powerful established powers in phones and TV. More than anything its an ideological campaign; they have a Google way of Google doing things. Google succeeding in phone and TV depends on what consumers are actually like. Do they prefer to have things chosen for them or do they like to make choices. Americans like choice and Americans like convenience. Historically Americans lean a little toward convenience. Google stuff has been extremely successful but I don't know the answer to this question.
Profile Image for Mahendra Palsule.
146 reviews17 followers
June 23, 2017
An important book and a must-read for policy makers and those who value freedom of expression and net neutrality.

Most of the book is devoted to tracing the history of information industries in the US - telephone, radio, tv, and film. Tim convincingly describes how each industry inevitably goes through a cycle - oscillating between an open, decentralized network and a closed, centralized one. Some of the historic episodes were quite shocking to me. Most prominent among those were learning how the FCC has been abused repeatedly to subdue, thwart, and cripple disruptive innovation, from FM radio to television. The prose may feel pedantic sometimes, but the topic deserves the gravitas.

I read this book as Facebook comes close to acquiring 2 billion users. Anyone who has read Zuckerberg's manifesto cannot but help comparing him to the information moguls described in this book. It is a timely reminder of how information businesses have gathered and abused power in the past and what society needs to do to guard individual rights and freedom of expression.
Profile Image for Zaphirenia.
278 reviews189 followers
September 6, 2019
I enjoyed this book very much. All this information about the... information industry was enlightening and really useful for understanding how the world of technology and media has developed and is still developing. From a European standpoint, the conclusion in the end, the "separations principle" proposal, seems a bit like wishful thinking but nevertheless the book is very engaging, well-written and kept me constantly craving to learn more.
Profile Image for Tiffany Conner.
94 reviews26 followers
November 30, 2010
I happened upon this book after listening to NPR's On the Media. I had never heard of Tim Wu before. Now, I am eager to go back and find some of his Slate articles. Though Wu is a law professor this book is not a dense, arcane, dry book of legalese. The writing is brisk, intelligent, and challenging. The Master Switch is accessible, informative, and very engaging. Mr. Wu has written a very timely book about the history and power of communication and information industries in this country. What was most refreshing about his book is that he is offering an objective historical analysis of how our current information environs mirror previous experiences in film, telephony, and radio. In other words, there's nothing that new about the "information" age of today. It's very unlike some of the other books written by people like Clay Shirky (a self-professed net "guru" of sorts, authors who tend to bristle at most criticisms of the internet and are quick label any who question the phenomenal power of the internet as hopeless Luddites doomed to eat the dust of the wily wired. Granted, the speed and scope of our current information culture feels unlike anything we've ever seen, but the fundamental concerns persist. Who will be allowed to control this force? Right now we enjoy the freedom of a largely open and uninhibited internet, but what's to keep that from changing? We think of the internet as a diffuse, naturally democratic opportunity, but what to make of the fact that the platforms, hardware, and applications permitting our exploration are large corporations no different from those of times past (Think Google/Apple as to Ma Bell)? And if history is any guide, then even corporations who promise "not to be evil" are prone to actions which privilege profit over innovation. Mr. Wu's book is a fantastic reminder of this.
Profile Image for Hashin Jithu.
24 reviews14 followers
December 7, 2017
A great read for those who are interested in understanding the historical background of the huge information empires today. It carefully analyses the rise and fall of the information empires of the past and Tim Wu comes up with am interesting explanation of cyclic changes present in the industry. He dissect all major information empires of the twentieth century and the early twenty first century and argues on how his pattern fits in the changing world.

A must read for all those who are interested in contemporary history especially in the history of Information technologies.
Profile Image for Nilesh Jasani.
969 reviews127 followers
September 15, 2012
There is an innate tendency in all of us to extrapolate from history, and often quite ridiculously. With the maxims like "those who do not know history, are condemned to repeat it", so many times these days, people overuse historical analysis. This book is a great recount of what happened before, but falls prey to heeding to history too closely.

"So many experts have this time is different written on their tombstone" is another proverb found everywhere. One should certainly believe in long cycles of history but one must also realize that everything in human life has also had a first. There is no point in abandoning logic in the name of historical analysis. Particularly when cycles are spotted based on three or four major events and for things and era as dissimilar as one talked here.

The book is extremely interesting and full of new things when it talks about the evolution of the US media/telecom/network (broadly telecommunication) industry since the first days of the telephony. The early monopolies, their abuse of power, the invention of radio/TV/cable TV, the birth of hollywood studios and media companies etc are all beautifully lined up in a nice story with a handful of interesting characters.

The book fails as it reaches the Internet era and tries to draw a conclusion. Google is good and Apple is bad appears a preconceived bias. Apple as a new AT&T almost ignores what has happened to almost every giant in the space in the last four decades starting from IBM to Microsoft to Intel and with dozens of others like Motorola, HP, Dell, Oracle, Sony, Nokia, Cisco, AOL etc. All of them appeared mightily powerful for a while but unlike what happened previously with other transformative technologies, this era has been different.

This does not mean there won't be control. There will surely be. But, it just can not be as heavy as AT&T era. And we are still in the second decade of Internet, more like telephones before the end of the nineteenth century. There is a lot more to go. Who knows, even Apple and/or Google may not appear more powerful than Yahoo or Microsoft of today by the time the decade is over. If there is anyone to worry about, they are not exactly corporate monopolies.

All that said, the book by itself is informative and interesting.
Profile Image for Brendan Holly.
47 reviews13 followers
June 28, 2018
Probably this is too high of a rating, but about 1/3 of the way in I realized just how ignorant I was about the history of information technologies in the past century. I was fascinated by the intertwining histories presented in this book, most intensely by the public/private AT&T monopoly - a word which fails to capture the awesome power of AT&T for the first 3/4 of the 20th century. Of course, in 2018 The Master Switch is both anachronistic and prescient as we await the consequences of the FCC's repeal of Net Neutrality. The historical record that Wu presents is overwhelmingly suggestive, as the utopian entropy of the internet age may soon give way to a more centralizing control that throttles disruptive innovations and possibly even stomps out the bastion of internet freedom: Google (who is undoubtedly painted with too cheery a brush). I take some pride in my precocious recognition that Apple products are the shiny, sleek, and ultimately sterile result of a corporation more intent on branding and design than information and innovation: thanks dad.
16 reviews2 followers
November 5, 2011
a number of things sets this book back badly:

* it deals only with the us (with the exception of a few pages on the bbc), thus the "empires" amounts to at most nation-wide corporations within one country
* too restricted in time; only deals with the birth of telephony and onwards (what about telegraphy, the semaphor system deployed in france etc?)
* the author invents a vaguely described Cycle to describe the phases, as he sees them, of the rise and fall of corporations operating in the information domain. by the end of the book, the Cycle is turned into a generative/prescriptive device. the book had been better off without the attempt at cramming (the few) extraordinary business actors into a, imho, far too vague descriptive model of the domain at hand.

the best thing about the book is the final chapter, where the author introduces and elaborates on the separations principle as a means to divide the political power from the economic power when it comes to information businesses.
Profile Image for Jayesh .
178 reviews101 followers
August 31, 2013
The historical detail, especially in the first half, is extremely endearing and convincingly shadows the current state of information age. Be it the monopolistic behavior of corporate giants or importance of patents or keeping the government on your sides, things really do appear to repeat themselves.

The book sort of petered out coming to the present internet age. Wu (although quite understandably) is clearly biased a lot towards Google, seeing it as almost the only force of good, about which I now have some reservations. Moreover, I knew about most stuff he was talking about the internet and Apple's empire building trend.

All said, I consider it a must read, especially if you are interested in the state of information over time and have a strong interest in free (as in speech) internet.

Profile Image for Nick Black.
Author 1 book702 followers
March 20, 2011
about what you'd expect from the five chapters excerpted onto slate.com: swashbuckling profiles of masscomm's elder founders, fascinating people all (theodore vail of bell and adolph zukor of paramount particularly, and of course alexander graham), fawning over Apple (though he takes a refreshingly stark stance on the grim hegemony and clockwork control of an Apple-dominated future), blatant oversights with regard to historical philosophy (capitalized "Cycle" used throughout, but not a word of homage to Vico) and overreaching conclusions. a fun enough read, if just for its history of telecom and the television/film industries.
Profile Image for Vikas Erraballi.
114 reviews16 followers
January 18, 2017
A historical analysis of 20th/21st century 'information industries' (telephone, radio, TV and film) attempting (successfully IMO) to identify patterns in their emergence/evolution and the consequences/implications of those patterns to US culture and politics.

Behind the analysis is a question of whether the internet industry will evolve similarly. Wu uses Schumpeter's theory of creative-destruction as a foil to highlight all the ways government can (and has) intervened to contradict the outcomes predicted by that theory (as applied to the information industry).

He ends with policy suggestions engineered to prevent the worst consequences of the patterns highlighted.
Profile Image for Azzaz Akl.
12 reviews11 followers
April 11, 2019
History of electronic and telecommunication systems as TV, Radio and a brief introduction about it's inventors. History of enterprises as AT&T, ARPA, General Motors and apple.
106 reviews50 followers
August 26, 2018
In the very last line of The Master Switch, Tim Wu's magisterial argument about the nature of information systems, the author catalyzes the argument he’s just spent 300 pages making, largely from a historian’s perspective, with a jarring statement about the future:

Our dependence on smartphones, tablets, and other devices has delivered us to a moment when our insatiable demand for bandwidth left us vulnerable. Let us, then, not fail to protect ourselves from the will of all who might seek domination of those resources we cannot do without. If we do not take this moment to secure our sovereignty over the choices that the information age has allowed us to enjoy, we cannot reasonably blame its loss on those who are free to enrich themselves by taking it from us in a manner history has foretold.

The new Our Father? I'm down.

In this book, Wu essentially presses the urgency of the first part of that prayer-like plea—the need to care about who controls our information systems—by elucidating exactly what "history has foretold."

The 20th century, he argues, has witnessed a number of information technology systems arise and inevitably consolidate. This pattern is consistent enough for him to call it The Cycle, and his concern is that the Internet is no less vulnerable to it than telephony, radio, film, or television was. Wu peels back the gauze from our popular history of these media—no longer do I think fondly of the corporate-controlled "golden age of radio" or “Edison's” invention of the phonograph (p. 138)—and shows how, in all cases, the new technologies attracted will-to-power conquistadors who fought titanic industrial wars for their control. The reason to care about who controls the medium, as he articulates on p. 155, is that "industry structure is what determines the freedom of expression in the underlying medium." Or, more pointedly, from 308: “The public square is a fine conceit, but in an information society it matters little that one is free to speak one’s mind in public; the public square, if it exists, is an information network nowadays.” Free speech needs free networks to mean anything.

The overarching argument is that power-capitalism has defined the course of every communications medium invented in the last 200 years. Wu starts with the story of the telephone, which had been invented before Alexander Graham Bell, but which had previously never matched with the backing of a wealthy man who had a personal and capitalistic interest in beating Western Union. Bell did have that, unlike his rival inventor, Elisha Gray, and it was due to the investor Hubbard having those grand ambitions and those resources that Bell’s telephone could be pushed to market. The chapter is titled “The Disruptive Founder” as a wink to the notions of individual genius this book disabuses at every corner.

Even in cases where individual genius was undeniable, market forces proved to have the definitive say. The tragic story of FM radio’s invention by Edwin Armstrong, and then its immediate suppression by his former friend David Sarnoff, attests to industry’s ability to hold back beneficial technologies until they can be co-opted by the most powerful actors in the space. There is nothing inevitable about a technology emerging at its due time; control of the technology is the curse of the patent system, accompanied by the blessing of legal protection for patent-holders who have the stomach and resources to take on entrenched interests like Bell had in its early days. “The inventor gets the experience, and the capitalist gets the invention,” said Charles Jenkins, one of a number of inventors of the film projector and television, of Thomas Edison (p. 138). And the corporate interest is never quite aligned with that of the population’s.

The savvier the powerful company’s leadership, the more totally it can destroy a potential competitor, including a new technology. (Bell’s suppression of Henry Tuttle’s Hush-A-Phone was hard to read.) Wu calls this “the Kronos effect,” after the Greek god who ate his young. Mass-market penetration is the end goal of all communicative technology, and any technology which has yet to find a sustainable interaction with capital is simply striving towards a maturity in which it does. It was hard to see the optimism that characterized the early days of radio, nearly parallel to the optimism of the Internet, compared to what became of it under quasi-nationalized corporate control.

That trajectory might be what we’re witnessing with consolidating tech power—which this 2010 book obliquely predicts, years before Google was ever fined by the EU or Facebook claimed its 7 billionth user. Theodore Vail’s Bell Company got around anti-trust legislation (p. 55) by making the same small concessions and request to be regulated that Mark Zuckerberg did in congressional testimony this year.

The story of the Bell Company is the closest thing to a through-line in the history of 20th century information systems. From humble beginnings, it became the sole owner of the “long lines” of cable that connected North America, and therefore an unimaginably powerful company. It was a monopoly, possibly one of the most pure examples that ever existed, and it operated with the full support of the US government, whose FCC was directly under the control of the telecom. (Wu demonstrates amply how the FCC consistently acts as a tool of industry.)

Bell’s monopoly defined the American experience to a large degree. It had a hand in deciding a presidential election (26) and brutally stymied any competition to its monopoly. On p. 79 Wu makes a pretty jarring statement: That had AT&T taken over radio to the degree they wanted, in addition to the phone industry, they would have exerted an influence over American culture and communications only paralleled in totalitarian regimes. It’s interesting that we take for granted our freedoms, etc, but never stop to consider how the praxis of such a concept increasingly relies on the technology of interaction also being somewhat free. This is one of the tentpole ideas of the book.

And the thing is, there’s a reason our society permits that level of control. Monopolies, especially “benevolent” ones like Bell, are efficient. They enjoy economies of scale and do sometimes deliver services faster and cleaner than a messy competitive landscape would be able to manage. This is the justification for a water utility; having to lay multiple sets of pipes would be far more inefficient than the market benefit that would result. But monopolies are terrible at letting anything else happen that they don’t control. Wu constantly evinces how openness and competition lead to unforeseen innovations, especially the all-important cultural ones that are aesthetic and hard to quantify and may even run counter to a profit motive. These innovations are well worth the immediate loss of efficiency that comes with taking down a monopoly.

The big example in this book is the breakup of the Bell system by Nixon and Reagan. That move— in a rare example of libertarian principles being applied for the actual good of society — led directly to the creation of an open Internet that didn’t have to use the long lines of one company. In fact, it was in the relatively brief window of time in which Bell (now AT&T) was broken up that the Internet really developed and became the network we know today. Things are consolidating again, and the end of net neutrality means that the company will be able to impose its monopolistic vision on the network again, but at least we had a blueprint for openness.

I really like how towards the end he starts breaking apart the chronology of his story in order to build his argument about the true connective nature of the Internet. His point is that this gigantic connective thing is actually made of individual parts that can easily fall into the hands of controllers. Google, for example, is basically a switchboard. AT&T is the same as the long lines holders it used to be. Bell is the villain in this book, always figuring out how to turn utopian possibilities into an opportunity for monopoly, aided by the FCC, which truly is an organ of industry in this rendering.

I appreciate this argument, but I think something the Internet has in its corner is the fact that it’s not just a new way of communicating, it’s promising an entirely new ontology. It probably inspires more religious-type devotion than the phone did. It’s also evolving much faster than those technologies did, so far.

I’ll end this rambling review (sorry, my original one got deleted, so whatever smoothly laid out thoughts I had there I just barfed out in this one) with a recap of how Wu ends the book. He proposes a set of three Separations Principles intended to keep information empires separate from one another and let innovation flower. He believes these guidelines address the reality of the information economy as well as the separation of church and state did for a previous mode of power. (And which is doubtless still essential, if no longer the cutting edge of political theory.)

His Separations Principles are: 1) the Temporal Separation, which authorizes rules that keep information entities separate. As in, it would be in fealty to the Temporal Separation principle that a seemingly-arbitrary or capricious or targeted prohibition would be passed keeping one information company from acquiring another. The goal is to prevent the Kronos Effect. Had Alexander Graham Bell worked in the Xerox PARC of 19th century Western Union, the advent of telephony would have been much slower, worse, and controlled by them.

2) An evolved, lenient version of antitrust that permits monopolies to form for a short term (to benefit from their efficiency) but prevents their accumulation of power over the long term.

3) Keeping state interference (regulation) negative — as in stating that something cannot happen — and never aid in the creation of a monopoly. In general, regulation usually succeeds at simply preserving, or attempting to preserve, the status quo.

NOTABLE BITS. This book had some really cool moments and I want to record a few here.

p. 99: “In 3000 AD, one will doubtless be able to travel from Kansas City to Peking in a few hours. But if the civilization of those two places is the same, there will be no object in doing so.” Aldous Huxley. This fear of a coming centrality and monoculture is spot on, and it’s exactly what happened in the TV industry when it became, instead of an open medium of storytelling, a primarily advertising medium. That’s because TV was co-opted by David Sarnoff’s RCA and born as a cash cow in the radio model. “Two (later three) networks defined the medium that would define America, offering programming aimed at the masses, homogenous in sensibility, broadly drawn and unprovocative by design, according to the imperatives of ‘entertainment that sells.’” (p. 139.)

“Common carriage,” as in a company being “a common carrier,” is a phrase that dates to 15th century England and acknowledges that the delivery of some goods are so important, the carrier has to act in a nondiscriminatory way. (Net neutrality.)

The Fox company was founded by Wilhelm Fuchs, a Jewish socialist who refused to abide by the cartel that controlled the film industry in the 1910s. A group of them moved out west and started a new cartel of film production companies that put out better-quality content than their Edison trust predecessors.

Corporate innovation labs produce “sustaining inventions,” not disruptive ideas. Those get shut down. (Ultimately, corporations themselves are anything but free market.)

The internet’s founders, including Vint Cerf, were forced “to invent a protocol” of information exchange “that took account of the existence of many networks, over which they had limited power.” This resulted in the TCP/IP protocol, which took off in 1982, and led to the Internet’s decentralization that we now take for granted.

p. 212: Ted Turner, whose CNN was the first cable channel to prove that the medium could support the mass-market model of broadcast TV, initially hated the idea of a news network. “I hate news. News is evil. It makes people feel bad.” Also, Wu argues that the “triopoly” of NBC / CBS / ABC was an aberrant unification of American society and that the much more traditional route is today’s fractured attention.

p. 219: Another Huxley gem, trotted out to express Wu’s feelings on all mass media: a machine that applies” all the resources of science... in order that imbecility may flourish.”

On p. 230-2, Wu argues that modern film has basically become a “species of advertisement” for intellectual property, which is where real money is made. The history of film in the latter half of the 20th century saw post-code stories being explosively, artistically rendered. But the problem was that one big flop, like Michael Cimino’s Heaven’s Gate, could tank a studio. After that, the MO became to mitigate risk as much as possible by relying on tried-and-true franchises, and build a reliable revenue stream that could absorb a $200M flop. Eventually Harvey Weinstein would revolutionize that model by buying already-finished indie movies, but for major studios, films are primarily an exposure strategy for intellectual property so they can make money off those associations.

p. 249: Amid a deregulatory spree in the Bush era, it starts to become possible for Bell (now AT&T) to rebuild its empire. Wu is adamant that they know only one speed, and that is domination. It’s pretty crazy to think that all this old history, with dates in the 1930s, just starts to creep into my own lifetime. Anyway, in 2005, AT&T wrote, “The existence of separate local and long distance companies no longer benefits consumers.” It’s exactly what they have said at any point in the last 150 years.

One consequence of the resulting consolidation was that the NSA had to rely on relatively few companies in order to gather data on Americans. In the early 2000s, a whistleblower named Mark Klein revealed that AT&T had been illegally collecting granular, user-level data on their users and passing it to the government. In 2008, during the campaign, Congress passed a law retroactively granting AT&T full immunity from the consequences of aiding these illegal requests. And this Wu book came out three years before Snowden, by the way.

Chapter 20: Apple and Google, once allies in a more naiive time, are now totemic powers on the spectrum of how open technology should be. Apples has finally been able to create its benevolent dictatorship through better devices and lifestyle and stuff. Fuck you Steve Jobs. Google, on the other hand, as the controller of the Internet switchboard, has reason to advocate for neutrality, a common carrier that they put you in touch with. Closed/convenient vs. Free/open. On p. 271, Eric Schmidt suggests that the efficiencies usually only found on a closed network can actually exist on an open network too. Big paradigm shift.

Overall, this book was a fascinating and enjoyable read that benefited from being consumed slowly. I loved watching debates on the news take place concurrently with the history of information technology unfolding in these pages. Surprisingly, I did not necessarily leave it with the conclusion that we’re fucked. Hopefully the digital technology Wu is desperate to keep open is going to usher in an era of more convenient subservience. And maybe an appetite for a new, non-corporate structure of social history.
Profile Image for Andy.
357 reviews58 followers
April 16, 2022
A very good book covering the history of information and communications industries, mainly in America. The title is slightly misleading, as the idea of a “Master Switch” is one of a few discussed within. I think the two more important themes of the book are

- the forces influencing information technologies to move between open and closed standards
- the strong public interest in information industries specifically, and how government has always acted with private industry (sometimes for the better, sometimes for the worse)

The book starts off with the telephone and covers various new media through the decades: radio, movies, television, cable, the Internet. Personally, I enjoyed the chapters on older technology more, in part because I work in tech and was already somewhat familiar with the newer stuff, but also because I found it fascinating to see how modern technological battles echoed those of the past. In particular, I enjoyed reading about the old Bell System: how its “walled garden” approach mirrored that of some present-day companies like Apple, and how its strong sense of serving a common interest partially resembles and partially contrasts with the tech giants of today.

The one mild complaint I’ll make is that I found the presentation of a capital-c Cycle to be a little strained. The main takeaway I got was not the regularity or inevitability that this word suggests; rather, that there exist different incentives, business and regulatory structures, technological constraints, and business philosophies of leadership that push things one way or another.

Wu ended the book with a call for net neutrality, which I thought tied things together very nicely. With the force of the history he just presented at his back, he convincingly argues that while it is an issue for modern times, it is mainly the latest iteration of a much older challenge.
Profile Image for Taylor Pearson.
Author 3 books722 followers
January 28, 2019
The Subtitle of this book, The Rise and Fall of Information Empires, captures the gist. This book starts with the founding of AT&T/Bell, the first information empire, and traces the history of radio, television and the movie industry, culminating in an analysis of today’s information empires: Google, Facebook and, perhaps again, AT&T.

The main thrust of Wu’s argument is that information monopolies are fundamentally different than other types of monopoly because they have what economists call externalities, effects not captured in the economic data.

Monopolies in the TV and radio industries didn’t cause problems through increases in consumer prices like industrial monopolies (I’m thinking of Rockefeller’s Standard Oil and Carnegie’s steel empire), but through the chokehold, they put on culture.

For decades of the 20th century, the movie, radio and television industries were run by a cartel of monopolists who used government regulatory agencies to stop any competitors, arguably creating a monoculture of conformity and reducing creativity and innovation.

Wu carries this logic forward to the internet giants which started as open networks (like radio and movies) but fairly quickly consolidated their power into walled gardens.

Wu, who coined the term “net neutrality,” argues that we must, as a society, refuse to tolerate information monopolies.

Regardless of if you agree with Wu’s thesis, his history of 20th-century media is extremely well done and helped me to contextualize today’s internet. This was my second read through and I still got a lot out of it.
Profile Image for Kevin Gross.
104 reviews1 follower
August 12, 2015
I found this book an interesting survey of the business undercurrents and politics surrounding and supporting the rise of various public information technologies, including telephones, film, radio, TV, and the Internet. From other sources, we hear frequently about the inventors like Alexander Bell and Phil Farnsworth, as well as others whose association with innovation is frequently overblown and misrepresented, like David Sarnoff. The author does a good, readable job of describing the world into which these inventions was launched and what happened to the idea as it was turned into product.

The book's final chapter is a bit of a disappointment. Building on his interesting observations of the business and politics that influenced each technology, he makes a case for a Separation Principle. His thesis is that vertical integration, in telephony, TV, etc., has repeatedly worked against public interest and for corporate monopolistic interests. Think of a Comcast owning the wires into your home, the media content, telephone service, perhaps even the technology standards. Great concept, but the chapter rushes through it, burdened with stilted prose and too many $10 words.
Profile Image for Myles.
377 reviews
October 9, 2019
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.
Profile Image for Ashwin Chhabria.
84 reviews7 followers
September 26, 2018
In the book Master Switch, Tim Wu details the history of the US tech industry discussing the inventions of telegraph, radio, television and the internet with several case studies.


1. Government interventions can disrupt natural growth and innovation- New technologies don’t always result out of free playing forces of the market. The entry of television was delayed by intention (so the radio could have an extended period of profit). The US government supported Bell Labs/AT&T for the longest time in wading off competition and ensuring that the market was monopolized (so they could have access to public data among other reasons). Things would have been a lot more different if the government did not orchestrate scenarios with a desired target in mind. Things would have been different if the laissez faire approach played out. The “government’s only proper role,” Wu concludes, “is as a check on private power, never as an aid to it.

2. The internet is heading into one of Open or closed systems- Tim Wu is certain that the internet will take form and shape into one of Open or Closed systems in the coming years. Google’s long-term fondness for keeping the internet open and welcoming (where the net is neutral) versus AT&T and Apple’s predilection to keep it closed (anti net-neutrality) will play out its eventualities in the near future. The cost of keeping the internet open and free is a lot of deregulated junk and phony content while the cost of keeping the internet closed is increased costs, scope to manipulate global information and increased power in the hands of telecom companies. Wu is all for regulated openness and against banning net neutrality. He calls for a separation policy- Those who “develop information (eg. Facebook), those who own the network infrastructure on which it travels(eg. AT&T, Airtel), and those who control the tools or venues of access (eg. Apple) must be kept apart from one another,” Wu writes. He stresses on the need for telecom networks to remain free from the favoritism of the network owners.

3. Cycles- Tim Wu identifies a recurring cycle in the evolution of all technologies(radio, television, movies, and now, the internet) that he identifies as almost inevitable. Each started out as open, chaotic, diverse and intensely creative; each stimulated utopian visions of the future, but in the end they all wound up “captured” by industrial interests.
Profile Image for José Luis.
283 reviews17 followers
January 8, 2023
Um registro histórico, temporal, da história das comunicações nos EUA. A análise dessa história, sob o ponto de vista da criação de monopólios, relação de monopólios com o governo federal, oligopólios, leis antitruste, e a internet e seus desafios de controle e regulação. O poder da indústria verticalizada do cinema, que persiste até hoje. Contém uma análise muito bem registrada sobre a criação do monopólio da AT&T nos EUA, e o efeito negativo que esse monopólio que durou 70 anos teve no desenvolvimento tecnológico estadunidense no período. Um trecho, tirado do livro, ilustra o fato (há vários outros exemplos no livro), sobre a invenção do princípio tecnológico para a criação da secretária eletrônica em 1930, e a sua chegada finalmente ao mercado somente em 1990(!): "Mas por que a diretoria de uma empresa escondeu uma descoberta tão importante e valiosa em termos comerciais? Do que eles tiveram medo? A resposta, bem surreal, está evidente no memorando de veto da empresa, também desenterrado por Clark. A AT&T acreditava fervorosamente que a secretária eletrônica e suas fitas magnéticas fariam com o que o público abandonasse o telefone." (Clark se refere ao historiador Mark Clark). O último capítulo do livro, O princípio da separação, apresenta o princípio da separação, que evitaria a formação de monopólios e favoreceria os prinícipios anti-truste. Muito bom livro.
Profile Image for Bruno Silva.
17 reviews
March 30, 2018
Neste livro observei como carteis na ajuda do governo, podem se formar em diversos setores industriais inclusive na comunicação (mencionado neste livro), trazendo diversos prejuizos as invenções disruptivas (que eliminam o mercado anterior) e principalmente afetando a livre expressão, causando a centralização de mercados até então bem difundidos e ramificados com o objetivo duvidoso de facilitar a comunicação. A AT&T foi o exemplo máximo no que de início era aberta e com a ideas de livre concorrência nas visões de seu fundador tornou-se numa das maiores empresas monopolistas do seculo XX, destruindo quaisquer adversários usando a lei como artifício de barreira dificultando simples inovaçoes que apenas serviam como acessarios aos aparelhos da Bell.
Porem, com o advento da internet trouxe uma filosofia contraria dos empresarios e dos integrantes do FCC (Federal Comunications Commition) fazendo sistemas diversos interligados entre si, causando uma revolução que tem suas consequências refletidas até na atual votação da neutralidade de rede dos EUA.
Profile Image for Mauricio.
35 reviews
July 3, 2019
Tales of disruptive innovation in information industries backed by historical facts and academic theory.

The author theorizes that information empires go through a cycle that usually leads to monopolies. He uses the telephone, cinema, radio and television in order to raise the question whether internet will go through the same path.

For me, the most interesting part was to see all the power plays that went behind the scenes and ended up shaping our relationship with communication, entertainment and our media consumption patterns.

Unfortunately, this book (published in 2010) came before the disruptive waves of Netflix started to affect traditional film and television, reshaping internet along the way.

If you are into technological history and want to dive into this industry, I think it is a great first approach.
Profile Image for Aaron Arnold.
428 reviews130 followers
December 4, 2012
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.
Profile Image for David Dinaburg.
278 reviews40 followers
December 21, 2012
Radio, television, cinema, telephone, internet. If you have any interest in the industrial or technical history of information industries, The Master Switch is highly recommended.
More than anything else, the preceding chapters chronicle the corrupting effects of vertically integrated power. A strong stake in more than one layer of the industry leaves a firm in a position of inherent conflict of interest. You cannot serve two masters, and the objectives of creating information are often at odds with those of disseminating it.
That statement is supported with hundreds of pages of fascinating examples, ranging from Paramount to NBC, AOL to CNN. The unifying thread—and exhibit par excellence—is Bell Communications and their control over America's long distance lines. Bell, and the multitude of titles it has adopted or been forced into over the past century plus, most recognizably AT&T, has perhaps the most interesting history I have ever heard concerning a business entity.

I don’t know if most people have formed a concrete distinction between the information industry and an industry like, say, the automobile industry. The Master Switch carves out a clear distinction and never allows the reader to forget the importance of not treating information dissemination and communications the same way as manufacturing:
...[s]ince antiquity, certain functions have been recognized by the state as being essential to the economy and commerce and therefore necessarily subject to nondiscriminatory policies. For such firms, also described as “public callings,” freedom and opportunity for profit come with responsibility as well. In the American Information industries, such duties were first imputed to the telegraph and telephone companies by the Taft administration in 1910; once it is recognized that a network has passed from a novelty to a necessity, the ancient justifications for common carriage reappear, even if under different names.
The historical details continue with a sentiment common to other past-facing books discussing networks; each time communications technology leaps forward, utopian idealists proclaim it to be the answer to the world’s ailments:
There was even, perhaps unexpectedly for an electronic medium, hope for the elevation of verbal discourse. “There is no doubt whatever that radio broadcasting will tend to improve the caliber of speeches delivered at the average political meeting,” read a column from the 1920s in Radio Broadcast.
However, there is an undercurrent throughout The Master Switch that the internet is not per se different from any other advance in communications technology, from telegraph on upwards; even its particular brand of extreme decentralization cannot stave off the “walled garden” model pounding at the gate, though it seemed to be the deciding factor in scuttling the AOL-Time Warner merger. The internet seems to be inexorably marching toward the next step in what author Tim Wu has dubbed ‘the cycle’: “...when we look closely at the twentieth century, we soon find that the internet wasn’t the first information technology supposed to have changed everything forever. We see in fact a succession of optimistic and open media, each of which, in time, became a closed and controlled industry...”

Theories of how to halt encroachment of industrial conglomerates into the decentralized and open internet are expounded late in the book. It is in my opinion fantastic that the author, typically credited with coining the term “net neutrality,” spent a year advising the Federal Trade Commission, and I can completely understand if that appointment was based mostly off the strength of The Master Switch. “The American political system is designed to prevent abuses of public power. But where it has proved less vigilant is in those areas where the political meets the economic realm, where private economic power comes to bear on public life.

There is so much more to recommend about The Master Switch and no review could hope to encompass what will resonate with a reader. Personally, the industrial history of Bell was absolutely the most interesting, and most detailed, facet of the book. AT&T was sundered via antitrust laws into Southwestern Bell, BellSouth, and all the rest, and yet reformed itself back into the nation’s largest telecommunications conglomerate, even donning the mantle and title of the old AT&T. The parts of that broken trust that didn’t merge back into AT&T became Verizon. “...and like the late Rome, the Bell system now existed as an eastern and a western empire—Verizon and AT&T.” Un. Real.

There is no way to know what is going to happen with the internet, but The Master Switch will assist a reader in understanding the historical context of telecommunications. It will help you form an opinion when you see a corporate link between, say, Google and Verizon:
Google’s close relationship with Verizon—its first friendship with a Bell—is hard to interpret. Eric Schmidt and Google believe they are converting Verizon to the side of openness and sundering the Bell Empire for good. But we’ve heard that before, and it is not completely clear who is converting whom. Verizon/Google makes for a powerful vertical combination. Verizon, formerly known as Bell Atlantic, is a seasoned monopolist, having held parts of its domain since the capitulation of Western Union in the 1870s. And so it may be Google that is learning from the master.
We shall see.
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