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Then comes the final phase of the cycle: once a communications technology with open origins has given way to a closed, tightly controlled system, that system is especially ripe to be disrupted. That generally happens when a better, competing invention comes along, but often it also requires a regulatory change that breaks up the old order and ensures room for upstarts. Cable TV was the perfect technology to upend the monolithic power of broadcast. But broadcasters fought hard to stop it, and cable took off only after it won the crucial support of regulators in the Nixon administration.

Wu’s is the second book this season to argue persuasively that technological change unfolds in predictable patterns. But while the other such book, Kevin Kelly’s What Technology Wants, wanders off course by trying to align technology’s patterns with the grand arcs of evolution, Wu’s is rooted much more firmly in an understanding of business and human nature. Essentially, Wu says, communications empires arise for simple reasons that haven’t gone away: businesses naturally try to keep growing, and their leaders are often lured by grand visions. He even acknowledges that there are often benefits to these empires, which is why consumers and government regulators often go along. One such benefit is that by exercising tight control, communications providers can often guarantee a higher quality of service. (Think of Steve Jobs’s claim that the Apple-controlled application store for iPads and iPhones is free of pornography and other junk that litters Google’s Android bazaar, which lets anyone try to sell an app.) And indeed, information monopolies do spread benefits that arise from their large scale. In the 20th century, AT&T had abundant resources to deliver high-quality service to the entire country at reasonably low prices. It could afford to fund Bell Laboratories and let its researchers explore breakthroughs that had no obvious commercial purpose.

Wu is less convincing, however, when he claims that the cycle is about to claim the openness of the Internet as its latest victim.

Certainly, Internet service providers such as Comcast, Verizon, and AT&T have begun to undermine support for one of the founding ideals of the Internet: “network neutrality” (a phrase that Wu introduced in the last decade). That’s the idea that all data packets are created equal, and that no operator of the networks that make up the Net should give priority to some packets over others. Clearly, you can hear echoes of yesterday’s monopolies when today’s communications providers argue that net neutrality keeps them from managing their systems to ensure the best service. It’s no stretch to assume that service providers would love to set up “fast lanes” for companies that paid extra—a step that by definition would disadvantage the voices of the less well capitalized. And already, TV networks are trying to exert more control over the ways their content can be seen, demanding higher payments from cable systems. The Fox network recently blacked out World Series games to strong-arm Cablevision into paying higher programming fees. NBC, CBS, and ABC have made it impossible to use a certain kind of device—Google’s new product that brings Web content to TVs—to watch shows on their websites.

But Wu also sees ominous signs where they might not really exist. His book describes how the antitrust breakup of AT&T in 1984 didn’t kill the beast; in fact, the company has reconstituted itself as the dominant phone provider in much of the country. It is also the exclusive provider of the (closed!) iPhone in the United States. And to drive home just how powerful AT&T had become by 2003, Wu argues that the National Security Agency could spy on huge chunks of Internet traffic solely by securing the phone company’s coöperation.

Each of these bits of evidence seems less impressive on further inspection. Yes, AT&T is the only choice for traditional landline phone service in much of the country, but these days a customer can get phone service from the cable TV company or several wireless companies. Yes, AT&T is the only company offering the iPhone in the United States, but that’s about to change because of competition, and it’s not like the iPhone is the only choice of smart phone. And sure, the larger a communications company gets, the more fruitful it is for the government to tap its lines. But does anyone think the NSA would give up surveillance if it had to approach 30 companies instead of one, two, or six?

Wu is surely right about why the cycle happens and why it matters: big communications companies will invariably try to become more powerful, and the ramifications of monopolistic power in information industries are more negative than positive. But we could find that the next turn of the cycle isn’t so destructive. Next to the consumers and citizens of the last century, we have significantly more choices in how we communicate—and thus more lines of defense against such consolidation.

Brian Bergstein is deputy editor of Technology Review.

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Credit: Mikiko Hayashi

Tagged: Business, Business Impact, mobile devices, cell phones, communication, The Mobile Enterprise

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