Tim Wu, The Master Switch: The Rise and Fall of Information Empires
Atlantic Books, 384pp, £19.99, ISBN 9781848879843
reviewed by Richard Sharpe
The telegraph, the telephone, radio, film and TV have all gone this way: they started as a disruptive and open technology only to become a closed system dominated by a few companies. In other words, those companies have their hand on the master switch of his title.
One of the refreshing things about Wu’s book is that he does not, unlike many others who write about the Internet and the information economy, think history started when the first packet was switched through Arpanet. He takes a longer view, starting in the 1870s with the development of the telephone. Electricity was known and used as a communications media over wires in the telegraph; acoustics was understood at the time. Alexander Graham Bell and Elisha Gray separately assembled these elements and made the telephone: ‘In this sense, inventors are often more like craftsmen than miracle workers.’
Soon people were building telephone networks as they wished in this open period of the technology. Farmers would rig up lines across their acres to talk to other farmers. Small towns and sections of cities would rig up their own networks. Then enter Theodore Vail in 1878: Vail was appointed general manager of the Bell Company and set out on a campaign to make the Bell system the only system. He defended the Bell patent, bought up competitors and created the monopoly: ‘We have organised and introduced the business,’ he declared, ‘and we do not propose to have it taken from us by any corporation.’ Vail offered what every aspiring monopolist offers: a more reliable system for all with less or no choice of supplier.
This, then, is the cycle: starting as a disruptive technology often applied by many before the information empire is built. The histories of radio, film and TV are different but they all have gone through this cycle, Wu says, often with the assistance of government. And the Internet and the information economy could go the same way.
The infrastructure of the Internet, its hardware and standards, may remain open and supplied by many but there are parts of it which show signs of becoming closed. Apple gave exclusive rights to the use of the iPhone to AT&T, the son of the Bell Company. ‘By entering this partnership, Apple was aligning itself with the nemesis of everything Google, the Internet and once even Apple itself stood for.’
Apple had radical origins with an operating system which could run a variety of software and slots to accommodate all types of peripheral devices: then Apple II was an open system. But the Macintosh and later Apple devices are closed systems. ‘Thus via the Mac, Apple was at once an innovative and retrograde company.’ It was Wozniak’s openness in the Apple II versus Jobs’ closeness with the Mac and all subsequent devices.
So the master switch of the Internet may not be in the network but may be a combination of devices using it and the information services they offer. Only this August another such combination of device and service was created when Google took over Motorola’s mobile phone division.
It does not take a conspiracy to close access: it just takes the regular capitalist competition between corporations swash with cash which they have gained from their high profits and willing to use that cash to branch out into other areas beyond their original base. So there are at least two fingers hovering over the master switch of the Internet and the information economy.
Wu’s answer to this possible threat is the separation principle: there should be a distance between each of the major functions or layers in the information economy. ‘It would mean that those who develop information, those who own the network infrastructure on which it travels, and those who control the tools or venues of access must be kept apart from one another.’ Added to this ‘the government [must] also keep its distance and not intervene in the market to favour any technology.’
Monopolistic control of the technology or the vertical integration of industrial functions which create the closed phase of the cycle offer ‘efficiency, polish and convenience’. We will have to forgo some of this ‘efficiency, polish and convenience’ if we are to continue to have an open information economy. The excitement caused whenever Apple launches a new iDevice clearly shows that few are willing to make this sacrifice. Consumers are lured into complicity with the monopolistic tendency of the information economy by the allure of the devices and services on offer.
If the consumers will not rise to the occasion to keep the information economy open in Wu’s sense then government will have to act to impose the separation principle. Wu, a professor at Columbia University, now has some influence in the US Government as he is now an advisor to the US Federal Communications Commission (FCC). In the past, Wu notes, the FCC has either failed to act to keep technologies open or has actively promoted monopoly in the interests of ‘efficiency, polish and convenience’.
Wu’s analysis is very much rooted in the US experience, with few references outside the USA. The European Union’s anti-monopoly actions have had more effect on the IT industry than US efforts in the recent past. The EU pursued Microsoft longer and harder than US authorities; the same with Intel. I hope that policy makers and politicians at national and European levels are reading this book and considering its implications. Indeed, anybody with a passing interest in the information economy should read and consider its thesis.