The Master Switch by Tim Wu

Guest Review by Rory Cellan-Jones (@ruskin147)

I have a confession to make: I wasn't really
looking forward to reading The Master Switch. From what I'd heard about this
important book, I had imagined a worthy but dull treatise
on net neutrality, an issue which has excited fierce passions in the US, but
has, until recently at least, left the UK cold. But I was completely wrong.
Until the very end, The Master Switch is not really about the principles
governing the internet –  rather, it's a rip-roaring saga about the
communications and media industries, peppered with extraordinary incidents and
with a cast of larger than life characters.

So we have Alexander Graham Bell and his battle
with telegraph monopolist Western Union over the telephone – “a match to
the death”, as Timothy Wu puts it. We see the Jewish immigrants Adolph Zukor and Carl
Laemmle taking on the New York-based Edison Trust which held absolute sway over
the infant movie industry – then, with other independents, moving to Los
Angeles and creating the Hollywood studio system, with an even more ferocious
grip on moviemaking and distribution. 

We track the rise of radio and television, each
beginning with idealistic independent-minded pioneers, and quickly captured by
what Wu calls information empires – RCA in radio, NBC and CBS in television.

We see smart inventors broken by the power of these
empires. In 1934 Edwin Armstrong comes up with something he calls
“frequency modulation” radio, or FM.  But RCA, fearing the
innovation would mean more radio stations and so dilute its monopoly power, responds
first by belittling Armstrong's invention, then effectively stealing it and
waiting for him to sue. Eventually, twenty years after inventing FM, he throws
himself out of his New York apartment.

We meet Henry Tuttle and Leo Beranek, who invent a
bizarre device called the Hush-a-Phone to allow confidential telephone calls, and
find themselves in an endless legal battle with the telephone monopoly
AT&T, which prohibits “foreign attachments”. Eventually AT&T
is defeated, too late for Tuttle to market his product, but the ruling
foreshadows the eventual break-up of the monopoly.

Wu's thesis, inspired by Joseph Schumpeter's
theories on creative destruction, is that each information industry goes through
a cycle of life and death, with the new destroying the old, as the telephone
killed the telegraph. But he sees each new industry becoming dominated by
powerful corporations, allied with the law and government, seeking to slow the
pace of innovation in order to maximise their profits and put off their own
destruction.

Until, that is the arrival of the internet. In this
case, he's more optimistic about the technology's innate ability to route
around monopoly power, detailing with glee the story of how the AOL Time Warner
merger unravelled. The internet, he says, “defies every expectation one
has developed from experience of other media industries, which are predicated
on control of the customer…. the internet abdicates control to the
individual; that is its special allure, its power to be endlessly surprising,
as well as its founding principle.”

But the author does fear a new battle for the soul
of the internet between open and closed systems, represented by Google in the
open corner and Apple, maker of beautiful but locked-down devices.  He
ends with a battle-cry for what he describes as a “separations
principle”, calling on regulators to keep content creators, network
operators and device makers apart. The aim is to ensure that the vertically
integrated monopolies that ran the telephone, broadcasting and movie industries
in the 20th century are not replicated on the internet in the 21st.

So there is an ample supply of economics in The
Master Switch to satisfy anyone with an interest in how innovation ebbs and
flows through the information industries. But luckily for those of us whose
heads begin to hurt after too much theory, there's enough plot and vivid characters
to make a gripping Hollywood blockbuster.