RSA: The Rise and Fall of Information Empires

At the RSA again for the Rise and Fall of Information Empires event.  Today’s speaker is Tim Wu, riffing on the themes from his book. Tom Chatfield is in the chair.

Liveblogging follows (typos and errors likely):

Every North American author’s dream is coming to talk in England… (really?)

Clarence Hickman worked for AT&T in the 1930s. Worked at the Bell Labs. Had a secret machine that was 7 feet tall and it would revolutionise the world. If you dialled his number and he wasn’t there, you could leave a message. He invented the answer machine – but the significance was the magnetic recording device that would lead to hard drives and much of modern computing storage. We only know this because historians discovered this in the 1990s. The invention was suppressed for 60 years. Why? In the 1930s, AT&T decided that this was a grave threat to the telephone. But also, 2/3 of American phone calls were obscene (their research suggested), and if they were recorded…

This monopoly status that AT&T had: is it a feature of that age, or is it something we have to worry about now? My book suggests that it’s part of a pattern of invention, a struggle to establish, and then a flourishing, We are in one of those with the internet. The end of the story is consolidation, and then control by a monopolist, or a close cartel of companies. That has been the fate of most information revolutions. Will this happen to the internet, or is it inherently different?

Why might it be different?

There’s a sense that there’s something radical in the way it’s been engineered – it’s designed to resist control, as the protests in the middle east are showing now. The economy is different. There’s no way a ,monopoly could last, runs the thinking in Silicon Valley – they always get taken down.

Why might it not?

1. Economic laws – why has Facebook been so successful? Everyone goes there because everyone is there. The network effect means that the more people that are there the more useful it is. This is what happened in the telephone market.
2. Human nature -people get excited (and utopian) by the possibilities of new technology. It’s a problem solved, they think. It can end war, improve relations. Then annoyance rises, so they need more filters. They become more interested in higher quality products, which are more reliable and secure. The film industry went this way. Some companies are beginning to emerge that cater to that – Google, but, more obviously, Steve Jobs and Apple. It’s beautiful and reliable and gets rid of the junk. In that, you can see an echo of the monopolists through time. Is that the factor destined to bring back monopoly?

Q&A

Q. Why should people want open systems?

A. Sometimes the things people want aren’t good for us. We need room for dissenting and unpopular voices and views. There’s a dynamic nature to monopolies. They tend to start off good – at the beginning they’re fantastic, which is why they become a monopoly. (Everybody in the room uses Google). The problem isn’t the short term, it’s the entrenchment over 70 years. They become stagnant. Dictators are like this, too.

Q. What should we be looking our for with Apple and Google? When does the transition to damage happen?

A. These are the two companies most likely to seize the one ring to rule them all. There’s a real chance that they’ll become a global entrenched power, which we’ve never seen before. (Facebook is another one to watch). Watch to see if they put their resources into innovation or defence. Do they put money into new products, or into attacking their competitors? While there’s still a healthy start-up culture, there’s a chance of monopolies falling.

Q, Aren’t monpolies the birth partners of capitalism?

A. Yes, and they will recur. We will always have the. So, as a society, we have to address the issue of what we do with concentrating private power. Dictatorships and monarchies have their problems as well as advantages, which is why checks and balances like parliaments arise – and there are brutal solutions like breakups.

Q. It seems to be historically inevitable that monopolies decline as new technologies emerge. Should we be more concerned about the creation of new monopolies, or should we concentrate on destroying them when they’ve emerged?

A. Dealing with them in advance is very difficult – you have to look at companies that look they might be successful and try and stop them…  A little communist and out of fashion. Encourage good behaviour, let they know that they’re being watched, and make them aware that there are remedies in the end.

Q. The iPlayer seem to know what I should want, but I take the opposite view. I’m worried about the internet making us compliant and submissive citizens.

A. Most consumers seek out safe, comfortable experiences. Safe, reliable systems become stagnant – but things that keep things healthy are unpopular; forest fires, political dissenters.

Q. Canada situation: re:ownership of content

A. The worst things I saw was when there’s too much integration between those who move content than those who produce it. The original BBC is an example – an integrated system, but someone trustworthy to run it. The current model is all the power and no responsibility. Newspapers always try to throw elections – but there’s an extra power if you’re the only communiction medium in teh country. There’s a real danger.

Q. There was nothing inevitable about the success of the internet. We need to pay attention to institutions that make the arguments and allow debate.

A. Yes, there were contending protocols to the internet – but they were all competing against an open system.

Q. (something about criminals and cyberwars)

A. Yes, there is the threat of cyber war, and that’s why there’s a move towards a more closed system. But it is easy to go too far. There’s criminal activity on the streets. There’s tension between the needs of law enforcement and human freedom.

Q. We’re talking about monopolies like they’re very bad things? Is there any way a monopoly can be managed like it can last?

A. When I say “monopoly” I don’t mean it’s a bad thing: most of them have this golden phase. In the 1920s AT&T said “we are going to build the best network in human history” – and they did. And Google is now saying “we won’t do evil, trust us”. It’s very similar to politics – look at Oliver Cromwell. They can go sour over time. Google are self-concious of this problem. They try to engineer ways to prevent themselves becoming evil. They try to void stagnation and defensiveness. I spent some time inside Google as a fellow, and it’s a very real struggle.

Q. Regularlory capture – successful companies start spending lots of money on political lobbying

A. If you’re a large company, the best way to ensure survival is to have government make your competitors’ business illegal. It’s much simpler than trying to beat them. There’s a tendency for a powerful company to seek the assistance of government. But (in the US) that’s also protected free speech.

Q. This seems to be a battle between freedom and control.

A. Great observation. What happens if you invent something that’s designed to be free? The inventors of the internet were trying to solve actual problems. Some of the inventors of the computers were involved in LSD research… We’re seeing some of this with open source software, trying to use the law to build freedom into software.

Q. Have you contemplated similarities between information systems and road/haulage systems? They have amazing freedom. Can we learn anything?

A. It’s incredibly relevant, and possibly a model. It has a much longer history. The electric network is also similar, You can buy any product and plug it into the electric network. It’s very innovation-sustaining. There’s a law of common carriage. An early realisation in English law that owners of bridges, ports, etc have tremendous power. That should influence how we think about communication networks.

And we’re done.