Harvard Book Store; WGBH Forum Network; Tim Wu: The Rise and Fall of Information Empires

And now it's my pleasure to introduce Tim. Tim will is an information policy advocate a professor at Columbia University Law School and chair of the media reform organization Free Press. A graduate of Harvard he was named one of the university's 100 most influential graduates in 2007 by 0 one 3:08 magazine and he's been recognized by a Scientific American as a leader in science and technology. He's perhaps best well known for coining the term net neutrality but his work has also encompassed issues of copyright international trade and various aspects of Information Technology Policy. He is the author of Who Controls the Internet and his work has also appeared in Slate The New Yorker. The Washington Post and other publications. His new book The master switch details the history and current state of the communications policy and argues that the fundamental differences between the information industry and other industries should be reflected in the in its regulatory policy. In his review for Boing Boing Cory Doctorow writes that the master switch is fascinating

wide ranging and ultimately inspiring. And that was great strength is the breadth of his scholarship and his ability to use humor clear language and innovative arguments to connect diverse ideas I wanted. It's really a pleasure. Thank you for coming out tonight. I just you know it's an honor just to have anyone come listen to me talk about the book. I usually teach and the students kind of have to come. You know they have no choice and you can you can call on them blind and you know how you answer this question but no it's a real honor to actually have people come essentially because they want to. Sorry. Let me tell you about NPR. I had a really I get to the targets I can but I loved doing it. But the strange experience was doing the NPR interview on Tuesday I was sitting down and I heard Robert Siegel's voice you know a very beautiful voice. I was like well. And suddenly I realized he's talking to me like this. It felt like like the Statue of Liberty had come to

life to shake your hand or something it's very very strange experience. But I guess I should talk about my book. So I'll give you a quick summary of what my book is about it. My book is a story is the story of information empires in American history and so it is the story of the great companies usually monopolies the men who run those companies and the tendency of rise and fall in this sector. It is more specifically a story of Western Union AT&T and b c the rise of the Hollywood studio system cable the rise of the Internet and finally our current age.

We're an Internet which has been a revolutionary and very open technology is increasingly controlled. And for better or for worse by companies like Google Facebook telephone companies and so on. So this is what the book is. If you if you look up the book and read it you'll find that most of it is a history. It's a narrative form. And a lot of it is about the people involved in these empires. And and what they were interested in what I want to do today. Structure of the talk is to talk about what ideas are what things interested me to write this book and how they played out. And then to conclude by talking about these two things I was interested to see how they play out in the book and then conclude with discussing our environment today and the current state of American information empire. So there's two things that interested me about when I when I began to write this book. I had worked for a long time in

Silicon Valley and like many people I felt and everyone around me felt we were living in very different times that our era was like no era that had ever come before we were people living after the Internet revolution. Much like after the American Revolution or after the crucifixion of Christ there's a sense that nothing could ever be the same. How could you know this was the Internet. Everyone can connect to everyone. And this is an ideology a feeling this sense that we live in very exceptional times in matters of of how we communicate things are faster more more global pervasive. This is a pervasive almost article of faith for anyone who works in these industries. I think a lot of us just from our daily experience we have the sense that you have a thousand messages in your inbox.

New companies arise every day that everything is just changing like never before. I had an instinct that or R R I wanted to know if this had ever happened before whether there had been other areas where a great new media medium had arose to change everything. Well there had been other technologies that were going to eradicate war change the very nature of human existence. And so I wanted to figure out in some way whether the Internet was actually different or whether it was following the same pattern established by technologies like the telegraph the telephone radio cable the other technologies that were revolutionary in their times. The other thing that has always profoundly interested

me and fascinated me is is something like a contradiction in the American character and maybe in human nature itself which is the following. There is in the American tradition a great respect a great admiration for things like competition smallness openness the values of Adam Smith the values of Jane Jacobs the idea of small is beautiful yet the history of the industries I'm talking about do not reflect those values they are rather a story of Monopoly powerful monopolies and their consequences repeated one after another. And so a lot of this book is a mediation on the American relationship with sayst the contradiction between a kind of love or

a state of taste as I said for small for things that are small local decentralized open and a tendency for this country to create mass giant information empires. And there's other areas too. But companies like AT&T companies like and B see companies on a scale that the world has never seen before to rule over information. So those are the two things and let me let me. And what I wondered in particular is whether there's something about us Americans or North Americans or even just as humans as consumers of information whether read newspapers watch news or go to films. Is something about us that creates market power that creates monopolies that gives rise to Hollywood AT&T to all these companies that dominate the history of 20th century American communications.

So I mean without it's obviously hard to talk a lot about history in a short time but. The book is full of stories which have the same essential repeating pattern which in the book is Turning the cycle. And I'll try to describe it briefly. Typically something new is invented. Whether it's a radio telephone or a motion pictures it goes through a period of some uncertainty. The initial inventor often has to struggle against efforts by existing firms to destroy or co-opt his technology. Eventually the technology reaches a form and gives rise to what I call an open age where suddenly it's very easy for anyone to get in the market.

And I'll give you a couple examples. About 100 years ago anyone in this room started the telephone company and that's gone out. Wired some houses together started a little company maybe the people's company in Cambridge telephone company it was actually I think a people's telephone company of Cambridge or something. They were they were very easy of everyone just started a business and I wanted to get into. Ten years later it was very easy for anyone to start a radio station. I won't say anyone you need to have a little bit of resources. But churches had their own radio stations motorcycle clubs radio amateurs all had radio stations anyone could be in this business. Film was an industry 1910s again about 100 years ago in 1914. I think there were four thousand one hundred nineteen films made. Now there were 11 films made a day. Hundreds of producers films on all kinds of topics. Now these were you know Gone With The Wind these were not Lord of the Rings

films these were short films with very limited special effects people falling over that kind of stuff but there was something that almost anyone can do is be it be a film producer and be in the market. And that pattern is obviously repeated itself in our own lifetime. The 1990s I had many friends when I went to school here went off to start websites. There are now a sense in the Internet economy still that its relatively well we'll talk about this later especially in the nineties that it was just something people got into entrepreneurial open. And there was also a sense and I said this has been the talk that in these early film industry the radio industry in the 1920s something profound was going on. That somehow through the miracle of communications humans might connect in New ways and start to overcome some of the greatest problems

of human nature that is to say put an end to conflict to war to perhaps starting a new religious movement to get a sense that something about these new technologies was going to change everything and in fact make it better. And things were never going to be the same again. But we then see in all these industries is a shift that happens gradually a number of factors are involved but generally some strong man shows up who takes the industry and manages to establish a more consolidated more integrated rule. What was once a fragmented very open industry like the Internet in the 1990s becomes gradually increasingly consolidated. Now part of that comes from the consumer and this is what really interests me is that typically the open industries

film 19:10 the Internet 1990s are attractively diverse and new. There's a novelty to them but they're often quite unreliable. Quality may suffer maybe somewhat amateurish. They don't have the size or the scale often that consumers want or Americans want. And so for example in the film industry the original of the Hollywood studios Paramount run by unnamed out of Zucker pioneered a very different kind of film where he took the methods of Carnegie Steel four or the Ford Motor Company and apply them to film. He said what we need to do is we need to integrate every step of the production process. We need to own the actors we need to own the cameras we need to own the studios all the distribution records

all the way to the theatres. Everything that is film we need to own. And then with guaranteed audiences with long term contracts you would be able to create what we now call the Hollywood film special effects gone with the wind. King Kong people liked it created a golden age. According to some gained was a new higher quality lost was the diversity in quantity and the telephone networks in the 1910s. There was a period as I said very entrepreneurial and when it started company was a small company in Cambridge. But all these scattered telephone networks made it very hard sometimes to reach people. Quite confusing AT&T the 1910s headed by a man named Theodore Vale who's a pivotal figure in the book. Take these pieces together and like a conquering Emperor put them together into one giant kingdom called AT&T.

And anyone who resisted him was crushed and he put the American phone system together into a single monopoly single monopoly. Effectively gain the ascent of the American government and rule telecommunications for 70 years. Radio is a similar story in 1920 as I said very diverse very open time. AT&T and I don't want to tell the full story but AT&T was an AT&T was involved in that. And that industry is well in the idea of what was called the network. This was the idea of making one show and sending it to 20 radio stations instead of 20 or radio stations making their own shows. You can see that if you combine the resources the amount of revenue available to an audience of 20 or a hundred or a thousand radio stations you'll have a lot more money to make higher quality. So

it's called higher or more production higher production value shows and so on that basis you saw the rise of of NBC in the 19 late 1920s and particularly important in that story as a federal government interest in creating a single centralized not a single but a centralized radio system to serve the American public. So you have this repeated story that I call the cycle. From open and fragmented to closed and consolidated systems in American information and my book is mainly the story of those cycles. Let me tell you let me take you where that takes us today. We are sort of in the midpoint of what you might call an open era in American

communications the Internet popularized in the mid-1990s is now 15 years into its into its rule at this point in radio history. Radio had already been gone from from being the darling young technology of American amateurs to being what Joseph Goebbels called the spiritual weapon of a totalitarian state. As I say in 15 years of radio history radio had already gone from. Sort of a beacon hope to a to a tool of the Nazi regime and of the Soviet regimes actually at the time used to indoctrinate citizens. So the Internet's doing better than radio. We can say this much but the ancient and repeated power patterns of consolidation and integration are showing themselves again and for better or for worse is something I'm going to leave somewhat open for debate. Let me just ask how many

people here use Google or maybe Hanningfield don't use Google. Well there's. That's impressive. What is the point is that Google won't get to say that Google has a monopoly over search. And I'm very I like Google I use it myself I love it it's an attractive technology but it has a monopoly over search that is undeniable and it raises the question all of us is Google and we have created the Google monopoly by our choices. It's not like it was somehow foisted on us the federal gov't. No one's been involved. We just have chosen it and made it. King essentially. Asked of another question a question that recurs from my book is the question of whether we actually in some level of information monopolists so long as they are good. This was a deal that AT&T struck with the American people in the 1910s and said we will be good. They didn't quite say it like that. They said

we are a public utility. Our duty is to serve the people. We will deliver a national telephone system the best in the world. All we demand all we ask in return is a monopoly forever. So we said great some level ask whether Americans at some level prefer even though we are a republic I have a certain taste for attributes of monarchy absolute power as long as it's handled responsibly that is the question that Google raises today. Question number two that I think is raised by today's events where we can see some of the same patterns reasserting themselves in a company like Apple. Apple's a very interesting company because they are copying Steve Jobs is copying almost letter by letter. Strategies used by the Hollywood studios in the 1920s that is to say he's pursuing a strategy of integration

putting everything together. When you think about it I don't know if it is iPhones or Macs but the motto of them could be a motto from BBC in the 20s the best of everything you have networks which are relatively fast. You have the devices themselves which are beautiful. Steve Jobs himself using his charisma has brokered the best deals with record labels Hollywood New York media to give you the best of everything on the world's most beautiful devices. It is a compelling product. It has the same bill that that Hollywood film at the 1930s and that ideology is in and our present in a war with Google with the Internet values which is part is what's so interesting is the Internet revolution was by design very different. It was meant to be or create perhaps forever a

fragmented open system. But now we have a man who promises something beautiful integrated seamless that works great. But it is an open. And I guess I'll close on this. Final question I got out of time I guess the question for people who are interested and I think this is everyone I think everyone is interested in information because it makes you who you are and everyone is interested in the tools we use everyday whether it's the Internet whether it's search engines Facebook or telephones because they are our tools. Today humans are tool using creatures. These are our tools and so we have a natural interest in how something we use every day of unnatural interest and how it works or where it's going. So part of what's very interesting is whether in fact again we come back to my initial question are we living in special times. With the rise the Internet and

sort of a more open place where you can surf blogs or go into Twitter and there's a million and sources of information. Is that just a phase or are we headed in some way back to the patterns in the 1940s 1950s or comforting where the whole nation essentially watched the same things at the same time maybe be a little different. But that is the question every time you write a book you have to decide what not put in your book what to put in the book and I didn't write about publishing not because I don't think it's interesting but because when I looked at the history of publishing I realized I'd have to go back to the 15th century and it was very much also an English European story so it's not there's no principle behind it it's just the limits of space. Yeah. No publishing is the same story. You know I haven't studied it in the same detail as these other markets so I don't want to sort of offhandedly say that's exactly the same but my instinct is the publishing is very similar patterns. I wonder if my publisher would like me saying that but

anyway. Thanks. I think that the reason I chose the word information is I think that what is ultimately going on here I think it's the most basic word the root word. So inside the industry there is a tendency to think or even 50 years ago people would say well broadcasting is one thing the radio telecommunications is another thing. But one thing you realize in the book is very interesting is you realize at the very early stages of most of these technologies there's a plasticity as to what they will be. So for example the radio was invented in the 1890s for a very long time was just used from point to point communications. I was sort of a substitute for the telephone no one not no one but the idea of broadcasting didn't become popular until 25 years after the invention. Similarly telephony for a while people thought the best use of the telephone was going to be for mass entertainment so they'd have concerts on the telephone. Some said that there was news services on the

telephone. There's some towns where the phone would ring 10 times at a certain time of day and then you pick up the phone and you would hear the news and weather and some good gossip and stuff. So these were local very interesting things were often local groups so there would be a you can imagine a small town there's one town I said carefully and in New Mexico where you have this small town and then there was a band and at like 8 p.m. They they have a performance and everyone's got there. So you know in the town as I gather in other towns these are farms so they're sort of spread out. I there just listening as their evening entertainment to take a telephone and listen to the band play which I guess is somewhere the central switching station. So there's a plasticity in what all these these technologies are. It's made more obvious by the Internet because the Internet can carry any video or voice or anything and so it's more obvious. And so yeah I chose the word information because I think it's least associated with either being the phone or the radio

or film. All these are all fundamentally ways of moving information and I guess it's premised on I won't go on forever on this but it's premised on the idea that there is something special when information is a product. What you said in the introduction something different about information in orange juice or boots or even steel. One of the things I find is very interesting in the book is The people who get interest the THEIR always men the men who are heading these empires. They're often motivated by something very different than money or regular success some opportunity. I think the opportunity control people's minds has a real persuasive influence for people who become information and there are a different breed. You see this with today's media moguls even any of them. There is something more deeply appealing I think about information information. Change is not a normal product because it affects

the present information you're presented with profoundly affects who you become what you aspire to what people think. So that's the reason I use the word information. That's a very interesting question. I mean it's hard to tell because the oh sorry I've got to repeat the question. So the question is whether. Consumers have changed in the way they react to things. Is that is that right. Whether there are similarities in the way people reacted to radio and telephone and film and the way that people reacted to the Internet. Right. You actually got me just speaking people who have personally been through this. One of the people who I talked to about this book idea at one point was Justice Stevens on the Supreme Court and he says he's a he's a guy who remembers meeting Babe Ruth and we're talking about the Internet and he says I remember when radio actually kind of got me started on my book in some ways. He said I remember when the radio was just getting started. The thing I like about him I

mean he said we thought that was really exciting. And now we think the Internet's exciting. So it's hard to tell because all you have to go by is you know newspaper accounts or talking to people what I think let me say what I think is similar to what I think is different. So what I think is similar is that consumers tend to be extremely excited by the novelty of things at first but then after a while you know so they're very excited and they have this huge booms throughout the history you see the booms that happen. There's a repeated pattern of booms. You know one minute there is 100 radio stations and there's there's a million radio stations not million but you know thousands of them but then they also tend to have this pattern. Like I said of becoming dissatisfied with with quality problems reliability problems a lot of people left Bill Bell's rivals not only because Bell destroyed them but because they didn't feel the service was good the equipment was shoddy and so forth. So there is

that pattern of getting really excited about something and again and then wanting more. And the second point what I think might be different. We think a few things that are different. I think there is at some stage more resistance to commercialism in earlier ages. There was a long time in radio early history where there was a massive movement against any. Advertisements on radio. People said in fact Herbert Hoover who don't necessarily think is a sort of left wing dude or something he said it would be an abomination to have advertisements on the radio. It is such a miracle of science to be wasted with commercial chatter is just unthinkable. So I think it was in previous times and almost stronger much natural sense of the commercial should not come into different areas. And you think about how much we and that when you know one you know Facebook starts are we dealing with here. You know Google maps are free or

nobody we sort of think about them as commercial entities. No I mean have you ever thought to use Google because it has ads or because it's commercial people. I don't think they have this. I don't think we have that same sensitivity that was around some extent. There's more. It's not a it's a really good question and I haven't. I wish there were. Let me say one more thing. I think that maybe the slots on one side. I think on the other side it's hard to tell it's consumers or just Americans. I think there was more of a worship of size in the night in the early part of the 20th century than we have today. This idea that everything needed to be massive and an incredible faith and science and centralized systems basically. So progress is always bigger and more centralized. So the bigger more centralized telephone system is always the better one in the thirties government taking charge of things and the smartest people running it was better. If you're into management theory Frederick Taylor prescribed that every corporation should reorganize how it

does everything to make people and the smart people in the center run things not the people in the shop. So there was this faith and I think we live in a different age where there's more there's been in the 70s had there was a huge reaction again since the 70s small is beautiful and essentially everything in the 60s and 70s was in some ways a rejection of the Pentagon and letting a couple of agencies and the huge corporations run everything. There were like you know maybe we've gone too far with this centralization thing. The failure of the Soviet Union made centralized economic planning look a little less attractive. And obviously the Second World War made you think that there may be incredible centralization of everything can become totalitarianism. So there's this this change in people's attitude and love for centralization. I think change in our area. Jane Jacobs very popular urban planner who people think the Internet's great Wikipedia which is centralizers are much more in our times of a natural urge to think that small local decentralized is a good thing. OK the question is whether the Internet is in some ways

fundamentally different because you have a pattern of you have a pattern whereby companies can start on top of another company's platform. Right. That's part of what the Internet revolution was all about. So let me talk about AT&T because the closest analogy AT&T that was always something that was what you're talking about was always possible. I have a story in my book of a man who sells a device for putting your telephone in the a 1930s or actually eventually the 1950s is a device you put over your telephone so people can't hear you and you talk like this. So he wants to sell something that is in some sense on the AT&T platform. Everyone has a phone he wants to sell an add on to the phone like this. Right. And so that you can't it seems like reasonable sells it for reasonable price. AT&T takes him to court to try to prevent him from start from selling this device. They see it as an abomination and they say the entire phone

system will be threatened. Someone other than us is allowed to innovate on top of our platform. AT&T was opposed to anything that was called a foreign attachment in their words. That is to say anything made by someone other than them was banned from the system. So they ran this poor guy Tuttle around for decades. And that was just the least of it. Things like answering machines AT&T talk about my book. I found this memo where they AT&T had invented the answering machine in the early 1930s. In fact they invented the tape recorder. Once they start thinking about this as Bell Labs they said you know what we have to destroy this technology. The reason is if there's tape recorders people can stop using the telephone. Someone's going to take their conversation. They might be talking about something embarrassing or obscene.

So we have to stop this technology in order to preserve the greater value of the system the system of of everything. So the very idea of the Internet revolution was to say listen maybe it's not the best thing to have one person in charge of everything. AT&T has been very innovative but this idea of just only AT&T makes the phones and you can't sell a little device to go over the head. That's not a good idea. So anyway I don't know if it fully answers your question but what you're seeing when you see companies based on another company is at its heart. The Internet the idea of the Internet revolution and that's a great question. That's a very good the latter question is a question which I have and now I don't spend a huge amount of time talking about it because I could spend forever and I mostly want to talk about the book but just just briefly in the book I do talk about the role of the FCC which is a very government federal government in the history of Monopoly and information and

it's a challenging role because. The FCC can discipline monopolists. The government can break up monopolies or anti-trust like it blew up. Bell in 1984 which was if you actually think about it the reason the Internet started was because Bell got blown up. People don't always put these two things together but there are these moments where decisive government action has a big effect particularly I would say blowing up companies. I'd hate to be I'm not going to they should blow up every company but when the time comes the history to me fairly convincingly proves that nothing has the effect on revitalizing a stagnant sector or giving it back to the people in some ways than blowing up a monopolist that has gone too far. Just just the fact that the film industry is another one that's writing the book and breaking them into pieces which they've eventually cut them vertically in the 50s made a big difference. But what can you ask from the FCC the FCC is a very

interesting history because it at times does nothing but support monopoly and keep monopolies alive beyond any time that they should be that protected NBC and CBS for decades against cable television cable television invented in the 1950s and really didn't start getting anywhere in the mid 70s reason because they were under intense federal regulation that just stop the business or stop it from being in any cities which is the same as stopping the business. So I think you have to be very cautious. Now what can you do you know to demand that the FCC does the right thing. I do think public pressure ultimately matters and I do think that having you know even just showing up today and becoming interested in basically American information and who controls it is extremely important. I kind of in the book I write about this stuff as if it's all right about what is often more often written about

by business writers. You know the fate of companies in a more political and almost more political way is more like the fate of nations. And I think that's how we have to think about these things that they are the people who run information companies in some ways should be as accountable as America's rulers. Because they have a profound influence on the shape of this country beyond which as I said shoe lace manufacturers and so I know I can talk to you later but all the security details. But that's what I think matters ultimately. It's the role of the military in the history you know the military has actually is an interesting question. They come and go. The first real information monopolist in American history is Western Union the telegraph company which I want to suggest is actually the most is also the most terrifying in history. If they were 150 years ago there was one way to move information

quickly from one place to instantly. You really have two choices. Post Office or the telegram. The telegram was instant the post office took however long it took and it was a monopoly ruled by one company Western Union a critical fact. Now let me talk. Now let me stay with that one company Western Union long distance information movement and what they did is they allied with the Associated Press. Which became the exclusive wire service for the nation that is the exclusive source of instant news. So there's only one way you get news instantly and that's through Western Union Associated Press duopoly. And they would just decide what they wanted the news to be on an instant basis. Most newspapers the time I mean look at them are about half Associated Press wires because that's the only way you get instant news and if it's something like war news which I'm going to get to in a second

that's the news that you want to hear and there's you're going to wait you know five year old news is not news. And that might be fine if you know they've said Do no evil or even vaguely had these kind of ideas but actually they had the opposite ideas they like the Republican Party and that was it. So they generally with some exceptions did what they could to keep the Republican party in power. This this monopoly over insta news whether that meant not broadcasting news relayed to candidates they didn't like whether it meant spying on Democratic candidates when they sent telegrams. It was just blatant in those days it was like you know people talk about 2000 Fox News being that there there's nothing like it particularly the election of 1876 you can't even compare today's kind of news bias to the Associated Press and the 1870s. The overlap was the people who worked associate press were also in the Republican Party. There's no there's one thing. Situation. I have in the book where it's a even allowed in

1876 and it looks like the Democrat has won. But Western Union gets hold of a democratic telegram suggesting that Democrats are a little unsure about the South somehow. So Western Union gives us the New York Times office of editors the editors run physically one of the others physically runs it over the Republican Party you get someone up and says claim the election we're going to win this. Even though the Republicans had internally already conceded the election. So when you have the country's only mover of information on your side it can make an incredible difference. And this may seem like a kind of abstract. Hundred Fifty years ago kind of thing. But imagine if Google became more powerful and even is now let's say and I like Google and imagine they just decided they liked one of the political parties in a profound way. They've got Gmail or let's say Facebook and Google put them together. They have Gmail they have the ability to

suddenly alter search results. If you look at the news page if they put the news that is favorable to one candidate fund the front of the news and negative you know they are not all powerful but it certainly helps. Now I can't. Oh yes. So the military the reason one of the reason the Western Union had this kind of power is the Lincoln administration during the Civil War like the western union monopoly because this was their advantage against the Confederates in setting up the. So often that the administration offered the military side the administration finds it more convenient to have a monopolist in charge of communications. AT&T had a long partnership with the federal government. And so the first time in fact that the antitrust department tried to break up AT&T the defense department killed it. They said AT&T is essential to national defense we must have a monopoly in charge of American communications. In fact AT&T ran for years. It kind of amazing they ran

laboratories or they ran laboratories with access to nuclear technology. So you had a private company you know which everyone kind of trusted that actually had access to nuclear bombs. That is the level of trust between the federal government and its greatest monopolists. It's fascinating to me because the American Revolution was here. People talk about the Tea Party that was a revolution against crown monopolies in some ways the original Tea Party was a revolution in some way against the British East India Company. That is fascinating to me that even though this was the sort of spirit we have this tendency to go back and create crown monopolies go back and create all powerful companies that are deeply supported by government whether it's the financial sector which has been an arm of government I don't know why we call the private sector because when it fails it is part of government.

I mean it is part of government is can you fail. Our major car manufacturers are a major player. They're all Kwasi crown corporations in the sense that they are not allowed to fail. So sorry this is a little bit. The military also from the military now doesn't have the same patterns that you have in the financial sectors. So the most obvious candidate would be AT&T and Verizon because they have the longest history and they have the advantage of X.. The reason AT&T and Verizon no one here has ever said you know I'm going to start a mobile I mean my starting app company you're never going to start a mobile phone company right now. That's because it got started that market you need about $10 billion to talk about getting started. And even then you're facing companies that are deeply entrenched. So the companies that have the closest relationship to government are AT&T and Verizon. The bell

I mean there's still AT&T There's the bell. They're the ones of the closest and they're the ones that are least vulnerable to competition in a sense. If you want to if you look at our cast of characters today who are powerful information companies I think possibly Google fit they could be displaced it's much harder to displace the phone companies. Now it's a it's a great question the question is whether I said that AT&T and Verizon have certain advantages from their relationship with government is the mobile Internet going to change everything. First of all I don't want to suggest that AT&T. The question is the previous question was Who are today's crowd monopolists. And one thing I just want to suggest is the phone companies still have a closer relationship to government doesn't mean that they're all powerful. It just means that they're much less vulnerable to competition. So that's the first thing. Second thing I want to say about mobile. What's very interesting today is if you look at your you should

notice if you start using your computer less and using your mobile phone more. I'm not saying that's a terrible thing. It's not very convenient. There are great devices but these are devices with very different histories and legacies. Mobile phones Well they're more like computers are still fundamentally telephones and so they ideologically have inherited the DNA of the first telephone in 1876 and are fundamentally much more closed devices. Generally speaking there generally devices that are have a if you look at the iPhone for example it has a much more controlled experience. And so I think we are definitely seeing with the phones the phones I would say are one of the major examples of a move towards a more closed internet. Now Google is trying to fight this with Android and so forth. But the rise of the mobile phone and the Cline the relative decline of computers is one of the examples of what I'm talking about. It's one thing I

want to fall that into a conversation about censorship and privacy. The only thing I'll say and it's very clear is that when you study the history of all these of these industry centralization one company ruling everything always makes it easier or always creates problems of private censorship and privacy violations and it's obvious because one company having access to everything is just much more easy. It is a more effective infringer of privacy or user privacy. Disaggregated fragmented open systems everyone has a little piece of information that's not necessarily that useful. Literally true this is a big word. I'm going to talk a little bit more about censorship because it's something the book talks more about than privacy. There were a lot of efforts in the 20s to censor the film industry. Success was so so the reason again is the industry and hundreds of producers thousands of

people a film would be made it would be. Supposedly banned but you could still play in some theaters and pay the fine or bribe people. So there is films that still censorship in the 20s was attempted but not always successful. The period when Film Censorship became incredibly effective in the 1930s when the industry and consolidated into six major studios and then the Catholic Church. Now the studios themselves with the Catholic Church which had previously written a code as to what film should be one to the six integrated companies and said You must clear all of your scripts with us before you make these movies or we will boycott Hollywood. And so we had a system from about 1934 to 1968 where every single Hollywood film went to the Catholic Church before it was made into a film

not before it was shown before it was made at all. And ultimately you had one guy whose name is Joseph Breen who made the decision. So you had one man deciding the content of American film. That's the influence of consolidation. All right thank you very much.