The Master Switch

by Tim Wu

  What was understood in the 1970s, and what needs to be understood again, is the role of such restrictions in preserving both the free market of goods and services and the free market of ideas. While the idea of regulation as a safeguard of freedom in any sense has come to seem incomprehensible—at least in the politics of sound bites—it is an idea perfectly at home in any serious understanding of the nature of law and of government. What is the First Amendment, or the Fourth, if not law that restricts power for the protection and promotion of freedom? The controls on private power to protect individual freedom are no different. Whether the state restricts a corporation from dumping toxic waste in a river or toxic assets in the financial markets, would one more reasonably regard this as an abridgment of freedom of the malefactors, or a protection of the freedom of individuals and businesses that would be adversely affected?

  The implementation of a working Separations Policy, then, falls in the first instance to the Federal Communications Commission, where it finds its expression mainly in two classes of regulations. The first class comprises antidiscriminatory or common carriage rules, the ancient laws meant to govern how firms that operate or own essential infrastructures treat those who use those infrastructures. As we’ve seen, since 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.

  Such as “net neutrality,” a concept I have espoused in other contexts, which is essentially the application of the idea of common carriage to a twenty-first-century industry. By this specific nomenclature I mean to add only a somewhat more specific understanding of how information networks function, as compared to, say, the operation of the only ferry to the mainland. Discrimination can take various forms when a network traffics in information packets. For while the boatman may fail in his obligations by refusing you passage or charging you more than the next passenger, the keeper of an information network may also speed up or slow down your transmission, or give right of way to one over another stream of traffic, among other manipulations. The Internet’s nature affords many options, but whatever may be the justification, a vibrant information economy cannot countenance discrimination at a level so basic as transmission on a public network. If the carrier is determined to capture greater profits, the carrier ought to be obliged to do so by expanding his capacity, not by charging similar parties different prices, bestowing on the favored a competitive advantage.

  The second essential component of a Separations Policy concerns industrial structure, which, I have argued, is the ultimate determinant of the scope of expressive freedom in our time. Here, the priorities must be both the prevention and dissolution of large-scale vertical mergers in the communications industry, a stricture perfectly within the commission’s legal authority to impose. Under such a rule, a merger of Comcast, the emerging broadband monopolist for much of the nation, with NBC or Disney—a combination obviously resulting in the sort of conflicts of interest a Separations Principle is meant to prevent—would simply be out of the question; it would thus not be subject to the customary gaming of the commission’s approval process whereby applicants offer marginal concessions in exchange for extravagant license. It is a rule the FCC can and should effect without delay. The histories we have examined make clear enough their power to do so, and also the unsavory consequences of allowing the creators of content to be conjoined with its disseminators.

  Despite some good work done by the FCC that I have acknowledged, entrusting to that one agency total responsibility for the nation’s information policy would be a serious mistake. The FCC is inevitably close to the action—sometimes too close to be perfectly impartial, and always in danger of capture in ways obvious and subtle. History shows what problems can result. Despite some finer moments, the agency has on occasion let itself become the enemy of the good, effectively a tool of repression. And so what is needed is not only an FCC institutionally committed to a Separations Principle but also a structural arrangement to guard against such deviations, including congressional oversight as well as attention and corrections from other branches of government.

  Here is where antitrust law becomes so important to communications policy. It is inevitable that the FCC will occasionally fail in its mission, and for this reason the government’s competition authorities, the Justice Department’s Antitrust Division and the Federal Trade Commission, are necessary as a backup. Notwithstanding my earlier criticism of the antitrust system’s narrowness of focus, the DOJ and FTC have a vital role to play generally, and particularly in one pernicious situation: when a private power has become so closely affiliated with government that only the government can take action against it. We should at least be able to depend on antitrust as a last safeguard against the FCC’s lapses.

  As things stand, the American antitrust regime, unlike its European counterpart, is virtually dormant respecting the entertainment and communications industries. That’s not necessarily a bad thing, for these are fast-moving industries and Sherman is a slow-moving law. And no one would deny that the awesome power of the law should be used sparingly, working more as a deterrent than a ready remedy. Nevertheless, its application must be a far more credible eventuality in those relatively rare instances when an industry has manifestly defeated normal efforts to place reasonable constraints on it, and specifically whenever it has somehow managed to circumvent the FCC. To fulfill such a mandate, the antitrust law must be responsive to its own discrete criteria, not deferring to the FCC’s oversight of the industry, which of course is not inerrant. An antitrust law preempted by FCC discretion is no safeguard at all. And in a constitutional democracy we simply cannot do without such a line of defense. For once it is entrenched in our national life, particularly once an industry has virtually merged with the state, such a power can be dislodged in no other way.

  Reasonably effective though I believe the FCC/Antitrust model can be, given the force of the Cycle it would hardly be prudent to rely on government institutions exclusively to ensure a durable compliance with a Separations Principle. But how else do we achieve such a goal?

  It may sound improbable, if not hopelessly naïve, but one place to apply pressure is among members of the industry itself. If legal scholarship over the past few decades has proved anything, it is that we have little choice. The better part of compliance with rules of all sorts actually depends on the power of self-regulation, not the threat of force, though of course that threat can help. Both church and state (or at least individual politicians) may occasionally feel motivated to push the boundaries of their coexistence, but overall both institutions tend to accept the wisdom of the divide between them, which is why it works. The consent of the governed is not strictly necessary, but it helps.

  Likewise the information industries, whatever their actions may suggest to the contrary, are much closer to an acceptance of the Separations ideal, at least in theory, than one might imagine. It should be recognized that there are uncodified norms governing the behavior of infotel firms in the twenty-first century, ones that did not exist decades ago, such as the norms that stigmatize site blocking, content discrimination, and censorship, broadly defined. Consider that when phone or cable companies have been accused of blocking an Internet site, their tendency has been to deny it, or to blame a low-ranking official, rather than to baldly defend a right to block or censor, as for instance the Edison Trust once did. While not always resulting in a practical difference, the change nonetheless suggests that such behavior has become malum in se. And the consensus to this effect is a powerful force.

&nbs
p; Consider all the mischief that the information firms could undertake but choose to eschew. Cable operators, though not obliged by law to do so, generally carry channels that a cruder calculus would motivate them to block. Likewise, Apple, the maker of the iPhone, has been, in effect, shamed into allowing apps, such as Skype or Line2, that compete with its own services. Meanwhile Verizon, a born-and-bred Baby Bell, gains public applause by publicly declaring itself an “open” company. And Google, one of the great corporate hegemons of our time, does likewise under its banner “Don’t Be Evil.” Whatever its missteps and shortcomings, that firm has, so far, done more than any other to promote what we have been describing as a constitutional policy of separations for the information industry. And while the extent of Google’s commitment has been exceptional, the basic impulse is not.

  In fact, rare is the firm willing to assert an intention and a right to dominate layers of the information industry beyond its core business, an ambition that someone like Theodore Vail, Adolph Zukor, or David Sarnoff would have proclaimed with unabashed glee. Now of course, some of these high-minded professions we hear might be cynical constructs of public relations departments, a scrim behind which a company can hatch some diabolical master plan. But I find little evidence of that level of conspiracy. (Generally, the Cycle moves in a manner more akin to the classical invisible hand than to Strangelovian machinations.) However insincerely embraced, corporate norms have in many ways proved to be a far more powerful deterrent to misconduct than regulations, which in corporate psychology exist only to be circumvented, preferably though not necessarily by legal means. Certainly this is so for the financial services sector. Perhaps in this way, too, information industries show their exceptionalism.

  Anyone who would discount the power of such norms might care to know what a world without them would look like. For that, one need search no farther than China, where blocking, discrimination, and censorship of the Internet are perfectly routine and in no way stigmatized. What is so striking (although, I would argue, not surprising) is that the vast preponderance of Chinese censorship is private, undertaken voluntarily, rather than enforced by actions of the state. In that society, it is as if the American commandment “Thou shalt not block” has had a minus sign placed before it; there exists a diametrical inversion of our norm, an orientation influenced, to be sure, as ours is, by codes both legal and extralegal, but to the opposite effect.

  Many would consider it simply a foolish denial of capitalism’s red tooth and claw to look for virtue among corporate titans. But as our narrative has also shown, the urge to dominate is never one of simple greed or the warped megalomania of a James Bond villain. It is in fact heartening to discover in the history of the information industries a recurring strain of idealism, even if it occasionally comes to unwholesome fruition. The motivations of information moguls can almost never be exhaustively described in terms of simple greed and vanity. Were it otherwise, we as a culture might be irretrievably lost. For ultimately, no matter how many regulatory fetters we may succeed in placing on them, the men and women who run the information empires of today and tomorrow will inevitably have enormous power over the extent of our free expression. Their values will always be the first line of defense, but so, too, will their vices be the most immediate source of public outcry. Whatever external system of controls might be created, there is no substitute for self-control. Put another way, we have hardly managed to improve on the Roman conception of virtue in governance.

  If, as I’ve suggested, corporate norms can provide a critical basis for self-regulation, the question naturally arises: Where, exactly, do such norms come from? The answer is, quite simply: From the general sentiment, the popular sense of right and wrong. And so this is where the ordinary citizen becomes involved in the Separations cause. I’m not suggesting that every American need become an avid follower of FCC proceedings. But the population’s general “information morality,” so to speak, is decisively important. In any industry, corporate behavior that strikes most people as wrong can bring a great cost to the perpetrator. But information commerce, as we have repeatedly observed, is more entangled with daily life than any other sort of commercial enterprise. Even the misdeeds of an industry as vitally important as health insurance do not have the potential to provoke such instantaneous reaction as the blocking or impeding of network traffic. The ever-growing wired majority is a particularly vociferous one, quick to adopt and exploit every new application for self-expression.

  Can we really depend to any degree on a popular groundswell to accomplish anything significant? In fact, every existing principle of separation, every effective limit on power in the American system, manages to be upheld precisely because of a broad consensus actively favoring it. Laws may continue on the books indefinitely, even after falling into desuetude. But the laws that continue to bite are those for which there continues to be a strong consensus. Thus, for instance, years before the Supreme Court struck down antisodomy statutes in the fifty states, prosecution of violators was already rare in nearly all jurisdictions because of a lack of strong consensus. Democracy expresses itself not only in the erection of walls but in the enforcement of prohibitions.

  In this way, a successful Separations regime ultimately depends less on the enactment of useful laws—although we need these, too—as on the cultivation of a popular ethic concerning our society’s relation to information, an ethic consistent with the importance of information in our individual and collective lives. A strong general conviction that it is wrong to block sites on the Internet, wrong for studios to censor films that deal with controversial problems, can do more to secure our freedom than an army of regulators. For the Cycle may have enormous force. Those who lobby government on behalf of the information industries may be legion. But in a society such as ours, they should be fairly matched by a generally elevated awareness of the imminent perils of a closed system.

  THIS TIME IS DIFFERENT

  Here at the very end it behooves us to return to the two questions posed at the beginning of this book. First, why should you care? Second, is the Internet different?—or, put another way, have we seen the last of the Cycle? The two questions are in fact intertwined, and to answer the second is to leave little doubt about the first.

  Notwithstanding what may seem the slow, progressive realization of information dystopias à la Aldous Huxley, the outright repressions of speech, of innovation, and of entire industries might seem a relic of the twentieth century and its totalitarianisms, nothing to fear in our day and age. It cannot be denied that the Internet has ushered in a time of unprecedented diversity and ease of communication and commerce, a broadly available way of reaching millions of people. And each of those millions of networked parties can in turn claim the role of what was once called, with appropriate distinction, a “broadcaster.” Beyond the Universal Network, cable television carries hundreds of channels, our mobile phones exceed the communicators of Star Trek in functionality, and even mature industries such as print journalism and book publishing have sought renewal in opening up to an unprecedented variety of voices, sensibilities, and forms. While the decline of many once proud industries is cause for real sorrow, we do, I think, live in what is in some ways an informational golden age. Television, the Internet, film, and mobile devices each force one another to become better. The breathtaking diversity of content in our age has actually engendered in us an anxiety perversely contrary to the one that plagued our ancestors: it is not that there’s too little produced to meet demand, but that there’s way too much to sustain all our would-be writers, reporters, and thinkers in a world of content so cheap and abundant.

  Yet if we generally like the way things are now, we must also ask whether our current situation is really so different from the open ages of radio, film, or the telephone. Might it not have also seemed in those times that the orgy of limitless entrepreneurism would never end? The point is that we are near the high end of a pendulum arc that, so far, has always begun to swing in the opposite di
rection—toward greater integration and centralization—with a force that can seem inexorable. So let us evaluate the basis for suggesting that “this time is different.”

  The cornerstone of this view is that with the coming of the Internet, we have been, at least as makers and consumers of information, “saved”; now, as with the Resurrection, things can never be the same again. The Internet inaugurated a principle so fundamental and powerful that it cannot be abolished; ever after, all will agree that open beats closed. It is an attractive notion; but in fact it is an article of faith in a domain of experience where fact, not faith, should guide us. It is true that the Internet naturally harnesses the power of decentralization and defies central control, but in the face of a determined power, that design alone is no adequate defense of what we hold most dear about the network.

  The simple fact is that the Internet is simply not the infinitely elastic phantasm that it is popularly imagined to be, but rather an actual physical entity that can be warped or broken. For while the network is designed to connect every user with every other on an equal footing, it has always depended on a finite number of physical connections, whether wired or spectral, and switches, operated by a finite number of firms upon whose good behavior the whole thing depends.

  There is a dark underbelly to the diversity of content and services that the Internet has brought us, one that leaves it more vulnerable to centralization, not less. The Internet with its uniquely open design has led to a moment when all other information networks have converged upon it as the one “superhighway,” to use the 1990s term. While there were once distinct channels of telephony, television, radio, and film, all information forms are now destined to make their way increasingly along the master network that can support virtually any kind of data traffic. This tendency, once called “convergence,” was universally thought a good thing, but its dangers have now revealed themselves as well. With every sort of political, social, cultural, and economic transaction having to one degree or another now gone digital, this proposes an awesome dependence on a single network, and a no less vital need to preserve its openness from imperial designs.