According to Tim Wu, David Sarnoff, founder of NBC, liked to spin "vainglorious tales for reporters and historians," not unlike "the ancient Chinese emperors who rewrote history as soon as they came to power, to prove they had had Heaven’s mandate all along." In The Master Switch, a history of "information empires," Wu is happy to pierce the vainglory of modern technological emperors like Sarnoff. In their place, however, he offers an almost heavenly account of what he sees as our true benefactor, the free market.
The crux of the story Wu tells is what he calls "the Cycle," the "oscillation of information industries between open and closed." The market, Wu argues, has from the birth of the telephone to the flourishing of the Internet driven innovations in communications technology. Capitalist competition, the story goes, spurs innovation through what economist Joseph Schumpeter described as "gale[s] of creative destruction." In the communications industry, these gales bring down barriers to communication, allowing wider and, Wu assumes, wiser political discussion; interpersonal communication becomes increasingly free from impediments and control. What has not been free from impediments and control, Wu argues, is the path to openness. Corporations that become successful with one generation of technology have a tendency to try to protect their position by smothering the next generation in its cradle. They wage shameless patent wars, set standards favorable to their technologies, monopolize infrastructure and enlist the help of government regulators. Simultaneously, governments are almost predisposed to stifle both innovation and markets. Wu believes we face critical decisions about how the Internet will be managed (the topic of his earlier, co-written book Who Controls the Internet?), which in turn will influence the dynamic between openness and control. If we turn against the market and make the wrong choices, "the practical consequences will be staggering." "Which is mightier," he asks, "the radicalism of the Internet or the inevitability of the Cycle?"
A professor of law at Columbia University and a contributor to Slate, Wu makes his case with prosecutorial and journalistic flair. His suitably villainous defendants are led by AT&T, which has put its hands on major twentieth-century communications innovations, either to control them, when that was to AT&T’s advantage, or to throttle them, when it was not. AT&T emerged from Alexander Graham Bell’s experiments with the telephone and achieved almost total control over that technology from the 1920s until the company was dismantled by court order in the ’80s. Furthermore, during that period, as Wu adroitly shows, AT&T used control of phone lines to influence the development of radio, whose early experiments traveled along the lines. In the process, AT&T set up the National Broadcasting System, which in time spawned Sarnoff’s RCA and NBC, each of which inherited AT&T’s monopolistic bent and carried it into television. AT&T also used its power and wealth to inhibit development of almost anything it perceived as a threat to its phone system, from the answering machine (and with that, tape recording) to the elegantly simple but far more disruptive phone jack, which gave devices not approved by AT&T (like modems) access to the phone network.
The breakup of AT&T into the "Baby Bells" in the ’80s seemed finally to put a stake through Ma Bell’s heart. But of course she never had one, so in the hands of Ed Whitacre, a master monopolist (who was tapped by the Obama administration to bring GM back from bankruptcy), AT&T was rebuilt to form, with Verizon, a powerful telephone duopoly for the new millennium. The spirit of Ma Bell, Wu warns, haunts the digital realm. As in the past, it is distracting the public from the monopolistic tendencies of communications companies with appealing toys such as the iPhone—which, like AT&T’s old phones, allows only approved and commercially nonthreatening connections to its devices. And it is seducing the government by offering access to private communications when, as in the "war on terror," the government wants to intercept more of our correspondence than courts are willing to approve.