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Building media empires

Historically, after innovation comes fight for control. Is Net next?

Both Apple’s Steve Jobs (above) and National Broadcasting Co. founder David Sarnoff possessed singular visions for their technologies. Both Apple’s Steve Jobs (above) and National Broadcasting Co. founder David Sarnoff possessed singular visions for their technologies. (Robert Galbraith/ Reuters)
By Hiawatha Bray
Globe Staff / November 7, 2010

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Steve Jobs looks more like Theodore Vail every day.

Not physically, of course. While Jobs favors black turtlenecks, Vail, the man who built telephone industry titan AT&T Inc., was a suit-and-tie man. Besides, Vail has been dead for 90 years. But each man had a sincere desire to improve the world through technology — as long as it was his technology.

The liberating potential of modern communications systems and their vulnerability to corporate and political control is as old a story as the telegraph and as up-to-date as the iPhone. Columbia Law School professor Tim Wu tells the tale in fine style in his entertaining, insightful new book.

Wu’s got plenty of material to work with. Consider the major communications breakthroughs of the past 150 years — the telephone, the motion picture, radio, television, the Internet. In each case, Wu discerns a clear pattern of development. Each invention was hailed as the harbinger of a new epoch. These new communication systems would uplift the common man with an endless bounty of news, education, and the fine arts.

True enough, up to a point. But each new technology has its limitations and drawbacks. For instance, radio and TV transmissions must be regulated, to prevent broadcasters interfering with one another, and telephone systems must be designed to a single standard, so Chicago can phone Philadelphia.

At the same time, business folk want to maximize their control of the systems as a way of maximizing profits. Gradually, the technology falls under the stifling control of governments and corporations until it’s superseded by some new invention, or liberated by a major shift in government policy.

Wu shows how the earliest movie moguls used patents on filmmaking equipment to gain a stranglehold on the industry. They were finally brought low by an alliance of men who would go on to found the great Hollywood movie empires like Paramount, Warner Brothers, and 20th Century Fox. The result, for a brief period in the 1920s, was a surge of bold, original films.

But the one-time Hollywood insurgents soon smothered this burst of innovation. They drove out independent producers and seized near-total control of the entire movie-making process, not only the sets, directors, and actors, but even the theaters where the films were shown. Many of the resulting movies were glorious, but a strictly enforced regime of censorship ensured that Hollywood films stayed well away from controversial topics. It took federal antitrust action after World War II to break up the cartel, and it wasn’t until the late 1960s that American cinema achieved a measure of liberation.

Then there’s radio, initially dominated by hundreds of hobbyists operating low-power broadcast stations around the country. Men like David Sarnoff, founder of the National Broadcasting Co., worked hand in glove with government regulators to suppress these small broadcasters in favor of powerful and lucrative nationwide networks.

Communications monopolists weren’t driven solely by greed. Wu argues that Vail was absolutely sincere in his belief that AT&T’s monopoly in telephone service was good for America. That’s why he struck a remarkable deal with the federal government, agreeing to strict regulation in exchange for being allowed to act as a monopoly.

Vail was as good as his word. His Bell System gave America the world’s finest phone service. And his company’s research arm, Bell Labs, won seven Nobel prizes, for inventing such trinkets as the transistor and the image-capturing chips found in digital cameras.

But the same company for years suppressed inventions like the telephone answering machine and DSL, a cheap way of transmitting digital data over phone lines, fearing these new technologies would reduce revenue from existing businesses. It took a reversal of federal policy and the breakup of the old Bell System to generate a new burst of telephonic innovation during the 1980s.

Nobody’s accused Steve Jobs of holding back new technologies from the public. But he does share Vail’s fondness for imposing a singular vision. His company’s iPhone and iPad, superb as they are, are each limited by design. Only Apple makes the devices, and each of them can only run software that meets with Apple’s approval. It’s a business model quite familiar to those of us who recall the Bell System.

Consumers don’t care, and with good reason. Both products are fantastic. But it’s a big step back from the anything-goes ethos of Apple’s original desktop computer. Wu shares the worry of Harvard professor Jonathan Zittrain that the iPad and iPhone are harbingers of a future in which all our gadgets will bring us only predigested, preapproved snippets of digital reality.

Still, many other devices remain open to all forms of software, benign or malignant. There’s the personal computer, of course. And Google Inc.’s alternative smartphone software, Android, offers plenty of scope for freewheeling innovation.

In the same way, I question Wu’s cheerleading for a law to protect “network neutrality.’’ To prevent the Internet from ending up like AT&T, he wants to force network carriers to treat all traffic the same, regardless of content. Not a bad idea, in principle, but I doubt carriers like AT&T or Comcast plan to stifle certain opinions or business rivals. In the few cases where they may have tried, they have been thwarted partly by government saber-rattling, but mainly by widespread public outrage, as Wu himself admits.

Granted, there are too few broadband providers in the United States, increasing the danger that the big boys might try to shove us around. But new services like the 4G networks being fielded by wireless phone companies will provide additional competition, making it risky for a carrier to censor online content.

Besides, there are legitimate reasons for networks to treat some traffic differently than others. Internet companies like Akamai already let businesses pay premium prices to get better Internet access. Why shouldn’t a Comcast or an AT&T be free to do the same?

Policy quibbles aside, there’s a sharp insight and a surprising fact on nearly every page of Wu’s masterful survey. Above all, Wu shows that each new communications technology spawns the same old quest for power. Apart from their tastes in clothing, Steve Jobs and Theodore Vail would have understood each other perfectly.

Hiawatha Bray is a member of the Globe staff and can be reached at bray@globe.com.

THE MASTER SWITCH: The Rise and Fall of Information Empires
By Tim Wu
Knopf, 366 pp., $27.95