If this has been so apparent in every information industry ever invented, how has the Cycle been permitted to exist for so long? Why has no action been taken to ensure periods of free, open communication that promote growth and innovation? Wu makes the compelling claim that this cycle will continue to occur, perhaps even for the most open communication innovation, the internet. The main combative force to communication monopolies has traditionally been anti-trust legislation, but Wu argues that "by their nature, those particular laws alone are inadequate for the regulation of information industries" (303). Additionally, Wu notes that the way to better regulate these industries and break the Cycle is through public opinion and insistence that popular values are maintained. These two compelling points can be summed up as "the better part of compliance with rules of all sorts actually depends on the power of self-regulation, not the threat of force" (Wu 313).
The notion that government regulation is not the solution to communication monopolies may seem strange when first observed. Historically, some of the most powerful and destructive monopolies of the twentieth century were broken up by government mandates, such as Standard Oil and Carnegie Steel, and this has always proved to benefit the consumer. The reason that similar regulation is insufficient is that the dangers a consumer monopoly pose and a communication monopoly pose are radically different. While consumers were threatened by high prices and unfair customer behaviors of these big businesses, this is almost always the opposite case for communication trusts. Often, the quality of service and price are improved under these systems. For example, when AT&T was initially broken up after trust legislation, the industry “experienced a drop in product quality…[and] the competitive industries that replaced…[AT&T failed]…to deliver even the fail-safe benefit of competition: lower prices” (Wu 161). Because of this standard, “application of…[anti-trust regulation is]…triggered by manipulation of consumer prices and certain other particular abuses of market power” (Wu 303), which is not initially applicable to information monopolies. In some instances, such as AT&T, the government will support the monopoly and even enforce legislation to keep it in power as long as it adheres to guidelines which, to this type of trust, are trivial.
Because of the standardized nature of regulations, they pose no threat to the real harm of these organizations: the ability to stifle new and upcoming technological advancements. This is why the Cycle has continued. Any time that these monopolies feel any threat from a new innovation, whether it be the radio industry from the redefining properties of FM or even AT&T from the Hush-A-Phone, a simple piece of plastic, they use their pull to eliminate it from the marketplace. They are able to accomplish this not only due to their size, but also surprisingly with help from the government. This can be seen by the legal battles with the Hush-A-Phone or the restricting standards of the Code within the prime days of Hollywood. The companies who were part of these acts often cited the logic that these steps were necessary to protect the integrity of their systems and benefit the consumer, but as Wu notes, “to grant any dominant industrial actor the protection of the state…is to arrest the Schumpeterian dynamic by which innovation leads to growth, and outcome that is ultimately never in the public interest” (308).
Public interest. It’s interesting that Wu uses these choice words in this statement. For this behavior, this “public interest”, is how he proposes that the Cycle could be broken and why our current internet has not yet experienced this total corporate takeover that other industries have fallen to. The view of the public and their popular opinion towards an issue, while seemingly not a pressing factor for corporate and federal behavior, is in reality an influence that bears multitudes of weight. There was a reason that the Bell monopoly had lasted for years while other trusts were shut down: the American public liked AT&T. They liked its service, they liked its pricing, and they liked the notion of a single connected America. The legislation that dissolved this company was met with “an American public [who was] wearied and bewildered by the years its government had spent hounding the nation’s most reliable corporation” (Wu 195). This kind of loyalty to a monopoly is unthinkable in today's corporate America. The current general public opinion towards these entities, even one with a social consciousness like AT&T had, would be for their dissolution in favor of competition.
This matter of public opinion may really be the way to control these monopolies, as its influence over the internet is already apparent. Our attitude towards an open internet has already affected the industry, as “Apple…has been…shamed into allowing apps…that compete with its own services. Meanwhile Verizon…gains public applause by publically declaring itself an “open” company” (Wu 314). The inverse effect can be seen in China where the censorship its net possesses is largely “private, undertaken voluntarily, rather than enforced by actions of the state” (Wu 314), as dictated by societal values. While this has worked for the present, the looming shadow of the Cycle and corporate dominance can still be found, such by the potential pact of Google and Verizon. We will soon see if the internet will be doomed to repeat the Cycle, just like all the industries who fell before it were destined to do.
This matter of public opinion may really be the way to control these monopolies, as its influence over the internet is already apparent. Our attitude towards an open internet has already affected the industry, as “Apple…has been…shamed into allowing apps…that compete with its own services. Meanwhile Verizon…gains public applause by publically declaring itself an “open” company” (Wu 314). The inverse effect can be seen in China where the censorship its net possesses is largely “private, undertaken voluntarily, rather than enforced by actions of the state” (Wu 314), as dictated by societal values. While this has worked for the present, the looming shadow of the Cycle and corporate dominance can still be found, such by the potential pact of Google and Verizon. We will soon see if the internet will be doomed to repeat the Cycle, just like all the industries who fell before it were destined to do.
No comments:
Post a Comment