by Tim Wu
When these problems reach a critical mass, and a lost potential for substantial gain is evident, the market’s invisible hand waves in some great mogul like Vail or band of them who promise a more orderly and efficient regime for the betterment of all users. Usually enlisting the federal government, this kind of mogul is special, for he defines a new type of industry, integrated and centralized. Delivering a better or more secure product, the mogul heralds a golden age in the life of the new technology. At its heart lies some perfected engine for providing a steady return on capital. In exchange for making the trains run on time (to hazard an extreme comparison), he gains a certain measure of control over the medium’s potential for enabling individual expression and technical innovation—control such as the inventors never dreamed of, and necessary to perpetuate itself, as well as the attendant profits of centralization. This, too, is the Cycle.
Since the stories of these individual industries take place concurrently and our main purpose in recounting them is to observe the operations of the Cycle, the narrative is arranged in the following way:
Part I traces the genesis of cultural and communications empires, the first phase of the Cycle, and shows how each of the early twentieth century’s new information industries—telephony, radio broadcast, and film—evolved from a novel invention.
By the 1940s, every one of the twentieth century’s new information industries, in the United States and elsewhere, would reach an established, stable, and seemingly permanent form, excluding all potential entrants. Communications by wire became the sole domain of the Bell system. The great networks, NBC and CBS, ruled radio broadcasting, as they prepared, with the help of the Federal Communications Commission, to launch in their own image a new medium called television. The Hollywood studios, meanwhile, closed a vise grip on every part of the film business, from talent to exhibition. And so in Part II, we will focus on the consolidation of information empire, often with state support, and the consequences, particularly for the vitality of free expression and technical innovation. For while we may rightly feel a certain awe for what the information industries manage to accomplish thanks to the colossal centralized structures created through the 1930s, we will also see how the same period was one of the most repressive in American history vis-à-vis new ideas and forms.
But as we have said, that which is centralized also eventually becomes a target for assault, triggering the next phase of the Cycle. Sometimes this takes the form of a technological innovation that breaks through the defenses and becomes the basis of an insurgent industry. The advent of personal computing and the Internet revolution it will eventually beget are both instances of such game-changing developments. And though less endowed with the romantic lore of invention, so too is the rise of cable television. But sometimes it is not invention—or invention alone—that drives the Cycle, but rather the federal government suddenly playing the role of giant-slayer of information cartels and monopolies that it had long tolerated. In Part III, we explore the ways in which the stranglehold of information monopoly is broken after decades.
Through the 1970s each of the great information empires of the twentieth century was fundamentally challenged or broken into pieces, if not blown up altogether, leading to a new period of openness. And a new run of the Cycle. The results were unmistakably invigorating for both commerce and culture. But like the T-1000 killer robot of Terminator 2 the shattered powers would reconstitute themselves, either in uncannily similar form (as with AT&T) or in the guise of a new corporate species called the conglomerate (as with the revenge of the broadcasters and of Hollywood). In Part IV we will see how the perennial lure of size and scale that led to the original information leviathans in the first half of the century spawned a new generation in the latter part.
By the dawn of the twenty-first century, the second great closing will be complete. The one exception to the hegemony of the latter-day information monopolists will be a new network to end all networks. While all else was being consolidated, the 1990s would also see the so-called Internet revolution, though amid its explosive growth no one could see where the wildly open new medium would lead. Would the Internet usher in a reign of industrial openness without end, abolishing the Cycle? Or would it, despite its radically decentralized design, become in time simply the next logical target for the insuperable forces of information empire, the object of the most consequential centralization yet? Part V will lead us to that ultimate question, the answer to which is as yet a matter of conjecture, for which, I argue, our best basis is history.
Reading all this, you may yet be wondering, “Why should I care?” After all, the flow of information is invisible, and its history lacks the emotional immediacy of, say, the Second World War or the civil rights movement. The fortunes of information empires notwithstanding, life goes on. It hardly occurred to anyone as a national problem when, in the 1950s, a special episode of I Love Lucy could attract more than 70 percent of households. And yet, almost like the weather, the flow of information defines the basic tenor of our times, the ambience in which things happen, and, ultimately, the character of a society.
Sometimes it takes an outsider to make this clear. Steaming from Malaysia to the United States in 1926, a young English writer named Aldous Huxley came across something interesting in the ship’s library, a volume entitled My Life and Work, by Henry Ford.8 Here was the vivid story of Ford’s design of mass production techniques and giant centralized factories of unexampled efficiency. Here, too, were Ford’s ideas on things like human equality: “There can be no greater absurdity and no greater disservice to humanity in general than to insist that all men are equal.”9 But what really interested Huxley, the future author of Brave New World, was Ford’s belief that his systems might be useful not just for manufacturing cars, but for all forms of social ordering. As Ford wrote, “the ideas we have put into practice are capable of the largest application—that they have nothing peculiarly to do with motor cars or tractors but form something in the nature of a universal code. I am quite certain that it is the natural code …”
When Huxley arrived in the States, Ford’s ideas fresh in mind, he realized something both intriguing and terrifying: Ford’s future was already becoming a reality. The methods of the steel factory and car assembly plant had been imported to the cultural and communications industries. Huxley witnessed in the America of 1926 the prototypes of structures that had not yet reached the rest of the world: the first commercial radio networks, rising studios for film production, and a powerful private communications monopoly called AT&T.
When he returned to England, Huxley declared in an essay for Harper’s Magazine called “The Outlook for American Culture” that “the future of America is the future of the World.” He had seen that future and been more than a little dismayed by it. “Mass production,” he wrote, “is an admirable thing when applied to material objects; but when applied to the things of the spirit it is not so good.”10
Seven years later, the question of the spirit would occur to another student of culture and theorist of information. “The radio is the most influential and important intermediary between a spiritual movement and the nation,” wrote Joseph Goebbels, quite astutely, in 1933. “Above all,” he said, “it is necessary to clearly centralize all radio activities.”11
It is an underacknowledged truism that, just as you are what you eat, how and what you think depends on what information you are exposed to. How do you hear the voice of political leaders? Whose pain do you feel? And where do your aspirations, your dreams of good living, come from? All of these are products of the information environment.
My effort to consider this process is also an effort to understand the practical realities of free speech, as opposed to its theoretical life. We can sometimes think that the study of the First Amendment is the same as the study of free speech, but in fact it forms just a tiny part of the picture. Americans idealize what Justice Oliver Wendell Holmes called the “marketplace of ideas,” a space where every member of societ
y is, by right, free to peddle his creed. Yet the shape or even existence of any such marketplace depends far less on our abstract values than on the structure of the communications and culture industries. We sometimes treat the information industries as if they were like any other enterprise, but they are not, for their structure determines who gets heard. It is in this context that Fred Friendly, onetime CBS News president, made it clear that before any question of free speech comes the question of “who controls the master switch.”
The immediate inspiration for this book is my experience of the long wave of easy optimism created by the rise of information technologies in the late twentieth and early twenty-first centuries, a feeling of almost utopian possibility and idealism. I shared in that excitement, both working in Silicon Valley and writing about it. Yet I have always been struck by what I feel is too strong an insistence that we are living in unprecedented times. In fact, the place we find ourselves now is a place we have been before, albeit in different guise. And so understanding how the fate of the technologies of the twentieth century developed is important in making the twenty-first century better.
The Rise
CHAPTER 1
The Disruptive Founder
Exactly forty years before Bell’s National Geographic banquet, Alexander Bell was in his laboratory in the attic of a machine shop in Boston, trying once more to coax a voice out of a wire. His efforts had proved mostly futile, and the Bell Company was little more than a typically hopeless start-up.*
Bell was a professor and an amateur inventor, with little taste for business: his expertise and his day job was teaching the deaf. His main investor and the president of the Bell Company was Gardiner Green Hubbard, a patent attorney and prominent critic of the telegraph monopoly Western Union. It is Hubbard who was responsible for Bell’s most valuable asset: its telephone patent, filed even before Bell had a working prototype. Besides Hubbard, the company had one employee, Bell’s assistant, Thomas Watson. That was it.1
If the banquet revealed Bell on the cusp of monopoly, here is the opposite extreme from which it began: a stirring image of Bell and Watson toiling in their small attic laboratory. It is here that the Cycle begins: in a lonely room where one or two men are trying to solve a concrete problem. So many revolutionary innovations start small, with outsiders, amateurs, and idealists in attics or garages. This motif of Bell and Watson alone will reappear throughout this account, at the origins of radio, television, the personal computer, cable, and companies like Google and Apple. The importance of these moments makes it critical to understand the stories of lone inventors.
Over the twentieth century, most innovation theorists and historians became somewhat skeptical of the importance of creation stories like Bell’s. These thinkers came to believe the archetype of the heroic inventor had been over-credited in the search for a compelling narrative. As William Fisher puts it, “Like the romantic ideal of authorship, the image of the inventor has proved distressingly durable.”2 These critics undeniably have a point: even the most startling inventions are usually arrived at, simultaneously, by two or more people. If that’s true, how singular could the genius of the inventor really be?
There could not be a better example than the story of the telephone itself. On the very day that Alexander Bell was registering his invention, another man, Elisha Gray, was also at the patent office filing for the very same breakthrough.* The coincidence takes some of the luster off Bell’s “eureka.” And the more you examine the history, the worse it looks. In 1861, sixteen years before Bell, a German man named Johann Philip Reis presented a primitive telephone to the Physical Society of Frankfurt, claiming that “with the help of the galvanic current, [the inventor] is able to reproduce at a distance the tones of instruments and even, to a certain degree, the human voice.” Germany has long considered Reis the telephone’s inventor. Another man, a small-town Pennsylvania electrician named Daniel Drawbaugh, later claimed that by 1869 he had a working telephone in his house. He produced prototypes and seventy witnesses who testified that they had seen or heard his invention at that time. In litigation before the Supreme Court in 1888, three Justices concluded that “overwhelming evidence” proved that “Drawbaugh produced and exhibited in his shop, as early as 1869, an electrical instrument by which he transmitted speech.…”* 3
There was, it is fair to say, no single inventor of the telephone. And this reality suggests that what we call invention, while not easy, is simply what happens once a technology’s development reaches the point where the next step becomes available to many people. By Bell’s time, others had invented wires and the telegraph, had discovered electricity and the basic principles of acoustics. It lay to Bell to assemble the pieces: no mean feat, but not a superhuman one. In this sense, inventors are often more like craftsmen than miracle workers.
Indeed, the history of science is full of examples of what the writer Malcolm Gladwell terms “simultaneous discovery”—so full that the phenomenon represents the norm rather than the exception. Few today know the name Alfred Russel Wallace, yet he wrote an article proposing the theory of natural selection in 1858, a year before Charles Darwin published The Origin of Species. Leibnitz and Newton developed calculus simultaneously. And in 1610 four others made the same lunar observations as Galileo.4
Is the loner and outsider inventor, then, merely a figment of so much hype, with no particular significance? No, I would argue his significance is enormous; but not for the reasons usually imagined. The inventors we remember are significant not so much as inventors, but as founders of “disruptive” industries, ones that shake up the technological status quo. Through circumstance or luck, they are exactly at the right distance both to imagine the future and to create an independent industry to exploit it.
Let’s focus, first, on the act of invention. The importance of the outsider here owes to his being at the right remove from the prevailing currents of thought about the problem at hand. That distance affords a perspective close enough to understand the problem, yet far enough for greater freedom of thought, freedom from, as it were, the cognitive distortion of what is as opposed to what could be. This innovative distance explains why so many of those who turn an industry upside down are outsiders, even outcasts.
To understand this point we need grasp the difference between two types of innovation: “sustaining” and “disruptive,” the distinction best described by innovation theorist Clayton Christensen. Sustaining innovations are improvements that make the product better, but do not threaten its market. The disruptive innovation, conversely, threatens to displace a product altogether. It is the difference between the electric typewriter, which improved on the typewriter, and the word processor, which supplanted it.5
Another advantage of the outside inventor is less a matter of the imagination than of his being a disinterested party. Distance creates a freedom to develop inventions that might challenge or even destroy the business model of the dominant industry. The outsider is often the only one who can afford to scuttle a perfectly sound ship, to propose an industry that might challenge the business establishment or suggest a whole new business model. Those closer to—often at the trough of—existing industries face a remarkably constant pressure not to invent things that will ruin their employer. The outsider has nothing to lose.
But to be clear, it is not mere distance, but the right distance that matters; there is such a thing as being too far away. It may be that Daniel Drawbaugh actually did invent the telephone seven years before Bell. We may never know; but even if he did, it doesn’t really matter, because he didn’t do anything with it. He was doomed to remain an inventor, not a founder, for he was just too far away from the action to found a disruptive industry. In this sense, Bell’s alliance with Hubbard, a sworn enemy of Western Union, the dominant monopolist, was all-important. For it was Hubbard who made Bell’s invention into an effort to unseat Western Union.
I am not saying, by any means, that invention is solely the province of loners and that everyone e
lse’s inspiration is suppressed. But this isn’t a book about better mousetraps. The Cycle is powered by disruptive innovations that upend once thriving industries, bankrupt the dominant powers, and change the world. Such innovations are exceedingly rare, but they are what makes the Cycle go.
Let’s return to Bell in his Boston laboratory. Doubtless he had some critical assets, including a knowledge of acoustics. His laboratory notebook, which can be read online, suggests a certain diligence. But his greatest advantage was neither of these. It was that everyone else was obsessed with trying to improve the telegraph. By the 1870s inventors and investors understood that there could be such a thing as a telephone, but it seemed a far-off, impractical thing. Serious men knew that what really mattered was better telegraph technology. Inventors were racing to build the “musical telegraph,” a device that could send multiple messages over a single line at the same time. The other holy grail was a device for printing telegrams at home.*
Bell was not immune to the seduction of these goals. One must start somewhere, and he, too, began his experiments in search of a better telegraph; certainly that’s what his backers thought they were paying for. Gardiner Hubbard, his primary investor, was initially skeptical of Bell’s work on the telephone. It “could never be more than a scientific toy,” Hubbard told him. “You had better throw that idea out of your mind and go ahead with your musical telegraph, which if it is successful will make you a millionaire.”6