Sunday, April 10, 2011

The Master Switch

The Master Switch: The Rise and Fall of Information Empires (Borzoi Books)

The Master Switch: The Rise and Fall of Information Empires (Borzoi Books) (Kindle Edition

All About Control -To Understand Net Neutrality Read This Book. Clarifies Crisply Why We Need To Know The Past To Protect Our Future

Our notion of information empires acknowledges only recent mediums like the internet, but this book details how each new medium of information has started out with a free spirit, only to be 'corporatized' and monopolized. The internet thus far has proven far more resilient than previous information innovations like telephony, radio, television, even movies. But there are signs, according to the author, that the avatar of Apple in its resurrected version is not only antithetical to its origins but also may prove to be the biggest and most serious challenge to the openness of the Internet. Well researched, well organized, highly recommended.
A minor quibble - the book cover is indescribably ugly. I should not judge a book by its cover, but nonetheless, "clothes do maketh the man,"

We may think the internet is unlike anything that was invented earlier. And it may well be. But what we think of the potential of the internet today is not new. A hundred years ago, 'Thanks to radio, predicted Nikola Tesla, one of the fathers of commercial electricity, in 1904, 'the entire earth will be converted into a huge brain, as it were, capable of response in every one of its parts.'" - is that is a description of the internet and its capacity for distributed computing or what?

The book details the invention, the development, the maturation, and the consolidation of such technologies as the telephone, radio, television, and the movie industry. Each story is also the story of certain individuals that pioneered these technologies, of businessmen who came to control it, of people who sought to bend and craft the direction of the evolution of these technologies to clearly monopolistic channels.

Net neutrality has been around as a concept for a long time. It went as "common carriage" a hundred years ago, prominently enough during the 1876 US presidential elections.
'... Western Union carried Associated Press reports exclusively. Working closely with the Republican Party and avowedly Republican papers like The New York Times (the ideal of an unbiased press would not be established for some time, and minting of the Times' liberal bona fides would take longer still), they did what they could to throw the election to Hayes.'
Though the telephone had been invented, the early telephone system did not work quite well. At one point, 'Hubbard, acting as Bell's president, offered Western Union all of Bell's patents for $100,000. Willian Orton, president of Western Union, refused, in one of history's less prudent exercises of business judgment.' However, this did not prevent Western Union from realizing the importance of telephony, and through its subsidiary, the American Speaking Telephone Company, deploying 56,000 telephone lines by the end of 1878, 'rendering Bell a bit player.' Under attack from Jay Gould, 'King of the Robber Barons', 'Western Union agreed to abandon telephony forever, in exchange for 20 percent of rental income on the Edison telephone, and a promise from Bell never to enter the telegraph market of offer competition to the Associated Press.' Chapter 1 ends with the Theodore Vail being put in charge of a new subsidiary, that Vail himself named 'American Telephone and Telegraph Company'. Thus were laid the seeds of the Ma Bell monopoly that would last for close to a century.

Though private and independent operators had started offering local telephone services, Bell was well on top of its game, and 'would dramatically undercut the rates of local independent telephone companies in any contested area, a tactic known as predatory pricing. Sabotage of equipment was not unheard of...' This however had only limited effect.
So what really tipped the scales in Bell's favor?
What transpired next is something not many people today know of, and much's the pity.
J.P. Morgan (and a group of financiers) wanted to gain control of the Bell company and build 'the greatest wire monopoly the world had ever seen.' What happened next would warm the cockles of any true monopolist.
'In 1907, after gaining Vail's assent, Morgan set his plan in motion. In a lightning-fast series of financial maneuvers, he took control of Bell, forcing out the Boston owners. Vail's title would be president of American Telephone & Telegraph (AT&T), now the holding company for the entire Bell system.'
Two years later
In 1909, at Morgan's direction and using his money, Vail seized a controlling interest in Western Union
... in 1913, acceding to a consent decree named the "Kingsbury Commitment" after Bell's vice president. ... Bell made one big concession: it agreed to sell Western Union.'
The Information: A History, a Theory, a FloodOver the next several decades, while AT&T would indeed provide reliable and guaranteed telephone service to millions of Americans, it did come at a price - stifled innovation and high prices.
In early 1934, Clarence Hickman, a Bell Labs engineer ... had invented a device what would be called an answering machine.
The genius at the heart of Hickman's ... machine was the technical principle that made it work and that would, eventually, transform the world: magnetic recording tape.
... soon after Hickman had demonstrated his invention, AT&T ordered the Labs to cease all research into magnetic storage, and Hickman's research was suppressed and concealed for more than sixty years, coming to light only when the historian Mark Clark came across Hickman's laboratory notebook in the Bell archives. 
Eventually magnetic tape would come to American via imports of foreign technology, mainly German.
 And that's not all.
AT&T, out of such fears, would for years suppress or fail to market: fiber optics, mobile telephones, digital subscriber lines (DSL), facsimile machines, speakerphones - the list goes on and on.
The story goes on - covering the advent of radio and AM. Then came FM, and it was suppressed for years and years. Television is the same story, only more depressing, since the powers that be - in this case David Sarnoff - would go to great lengths to control when and how television would be introduced to the American public, lest it hamper the commercial viability of radio.

Kindle Excerpt:


© 2011, Abhinav Agarwal. All rights reserved.