The Separations Principle - The Internet Against Everyone - Abraham Lincoln - James M. McPherson

The Master Switch: The Rise and Fall of Information Empires - Tim Wu (2010)

Part V. The Internet Against Everyone

Chapter 21. The Separations Principle

An empire long united, must divide; an empire long divided, must unite. Thus it has ever been, and thus it will always be.

The Romance of the Three Kingdoms

Luo Guanzhong’s fourteenth-century novel captures the perennial alternation between concentrated and dispersed power that has shaped most of human history. Aside from a few patches of relative enlightenment, our own among them, the course of political power has continued on this winding way all over the world for most of recorded time. Nowadays, we sometimes like to think we have progressed past the cyclical rise and fall of centralized power, but in truth, even in the absence of an actual Caesar or Khan, the human ambition to build and overthrow empires lives on, however adapted to new forms and contexts. It has been the aim of this book to show that our information industries—the defining business ventures of our time—have from their inception been subject to the same cycle of rise and fall, imperial consolidation and dispersion, and that the time has come when we must pay attention.

Living in a contemporary democracy can lull us into regarding concentrated power as a historical problem we have more or less solved. The American Constitution was designed above all in the awareness of the danger of centralized power, and its response to that danger was, as Justice Kennedy once wrote, to “split the atom of sovereignty.” By this he was referring specifically to our federal system, by which we distinguish powers reserved to the states from federal powers, but it could equally refer to any number of essential separations that the Constitution enshrines: separations of executive, legislative, and judicial powers; separations of the government’s enumerated powers from those reserved to the individual, the latter protections found in the Bill of Rights, from which also derives the separation of church and state. Not that the framers invented the notion. The various divisions of power found in most of the world’s constitutional governments today are based on an idea as old as ancient Greece and continued under the Roman Republic. Behind the very notion of separation is a theory of countervailing power. Separations are an effort to prevent any single element of society from gaining dominance over the whole, and by such dominance becoming tyrannical.

The American political system is designed to prevent abuses of public power. But where it has proved less vigilant is in those areas where the political meets the economic realm, where private economic power comes to bear on public life. We seem loath as a society to acknowledge the historical coincidence of the two, even though historians such as Arthur Schlesinger, Jr., have persuasively described our history as an ongoing contest between public and private power. We like to believe that our safeguards against concentrated political power will ultimately protect us from the consequences of accumulated economic power. But this hasn’t always been so.

This relative indifference to the danger of private power is of complex origin. It owes in part to the Lockean sanctification of private property as enunciated by Jefferson. It owes as well to the nature of our constitutionalism: the American system reserves to the individual or, as the case may be, to the individual states any powers not explicitly granted to the federal government. The federal government’s right to interfere with free enterprise is derived mainly from the Commerce Clause, and the extent of that right has never been uncontroversial. As a consequence, while popular demand for regulation has waxed and waned, American economic life has been built mostly on freewheeling capitalism.

This tradition has bequeathed to us an economic history far more spasmodic and cyclical than American political history (aside from the obvious exception of the Civil War). While the U.S. Constitution has proved relatively sturdy and adaptable, it is America’s economic life that has been subject to a dynamic of imperial rise and fall akin to that in The Romance of the Three Kingdoms. The rise of an explicit political empire was successfully forestalled by the Constitution; and, as if in response, American history became, in no small part, a chronicle of commercial empires, including the industrial dominions of men like Carnegie and Rockefeller as well as those described in this book. The reason this displacement of energies could even have occurred is simple: while our political theology seeks to tame the state of nature, our economic orthodoxy submits to it. And so most influential economic thought, from Smith to Keynes to Schumpeter, accepts as intrinsic to a free-market system the ravages of boom and bust, as well as the various consequences of imperial growth and overreach, recommending that government policy should seek, at most, to moderate the resulting tremors.

It would be quite radical today even to contemplate imposing on the economy the kind of safeguards that the Constitution places on the political system, though such ideas have occasionally been proposed in our history, for instance by Justice Louis Brandeis and President Andrew Jackson. The latter, who fought and destroyed the Second Bank of the United States, warned in 1837 that without control over private power, “you will in the end find that the most important powers of Government have been given or bartered away, and the control over your dearest interests has passed into the hands of these corporations.” But in our times, it goes without saying that economic vitality—innovation, growth, and opportunity—depends on the freedom of the economic system to rise and fall, crash and burn.

The difference in the American approaches to political versus economic power is a subject too vast to be done justice here. Suffice it to say that one must recognize it in order to understand the course of American industrial history. But there is a further difference to bear in mind, whatever we might think of the special treatment of industrial power in general; and that concerns the special case of concentrated power over the creation, transmission, and exhibition of information.

It is an oft-repeated assertion, but one that nevertheless always bears repeating: information industries, enterprises that traffic in forms of individual expression, can never be properly understood as “normal” industries, ones dealing in virtually any other sort of commodity.*

Today, the information industries are collectively embedded in our existence in a way unprecedented in industrial history, involving every dimension of our national and personal lives—economic, yes, but also expressive and cultural, social and political. They are not just effectively integral to every transaction; they also decide who among us gets heard or seen and when, whether it be the aspiring inventor, artist, or candidate. And that creates a challenge for an American system used to a clean split between the treatment of political and economic power, a strict control of the former and only moderate regulation of the latter. Among the great questions of our time is whether our approach to the power of information should be informed by a sense of that power’s political consequences, subject to our ingrained habit of balancing and checking any great power. Or should we simply follow our approach to economic power in general, in which we tolerate, and even reward, aggrandizement?

While perhaps not immediately obvious, such questions are in fact at the heart of the ongoing struggle between the armies of open systems and closed, represented in the last chapter in the battle between Google and Apple but manifest elsewhere as well and destined to outlast that rivalry. The two defining firms of our time have come to represent, respectively, the utopia of openness (the dream of the Internet’s founders, of which the early days of telephony, radio, and film offered a foretaste) and the perfection of the closed system (Vail’s dream). The same question of how to treat information industries is also raised by a less well reported alignment now shaping up: by the FCC’s own reckoning, the cable companies will soon enjoy an uncontested monopoly over broadband Internet in much of the United States beyond the East Coast, and they are also seeking control of more Hollywood studios and television networks.

To come at these problems afresh in the twenty-first century is to be struck by an obvious reality: information has become exceptional as an industrial category even in relation to that industry’s own history. To consider the extent of that reality is to recognize immediately that the purely economic laissez-faire approach, the old television-as-toaster thinking that prevailed in the late twentiety century, is no longer feasible. To leave the economy of information, and power over this commodity, subject solely to the traditional ad hoc ways of dealing with concentrations of industrial power—in other words, to antitrust law—is dangerous. Without venturing into the long, rancorous debate over what, if any, kind of antitrust policy is proper in our system, I would argue that by their nature, those particular laws alone are inadequate for the regulation of information industries.*

The rejection of a narrow economic approach might seem to propose a high degree of regulatory involvement, along the lines taken by the New Deal agencies. And indeed, following the logic that the information and news media peform a vital public function, most nations in the twentieth century, even liberal democracies, have simply made broadcasting, telephony, and the news media either actual or de facto parts of government. The United States came close to this model during the years of AT&T’s regulated monopoly and the golden age of the television networks, but has since reverted to the idea that industry is industry.

Yet this approach is also wrong. What I propose is not the sort of nationalization that found favor in Western Europe and briefly in the United States during the 1930s. Far from it. For history shows that in seeking to prevent the exercise of abusive power in the information industries, government is among those actors whose power must be restrained. Government may function as a check on abusive power, but government itself is a power that must be checked. What I propose is not a regulatory approach but rather a constitutional approach to the information economy. By that I mean a regime whose goal is to constrain and divide all power that derives from the control of information.

Specifically, what we need is something I would call a Separations Principle for the information economy. A Separations Principle would mean the creation of a salutary distance between each of the major functions or layers in the information economy. It would mean that those who develop information, those who own the network infrastructure on which it travels, and those who control the tools or venues of access must be kept apart from one another. At the same time, the Separations Principle stipulates one other necessity: that the government also keep its distance and not intervene in the market to favor any technology, network monopoly, or integration of the major functions of an information industry. Such interference—often to preserve an industry that figures mightily in the national economy (in a sense, too big to fail)—is ultimately destructive of both a free society and the healthy growth of an information economy or any other kind.

Like the separation of church and state, the Separations Principle means to preempt politics; it is a refusal to take sides between institutions that are historically, even naturally, bound to come into conflict, a refusal born of society’s interest in preserving both. Thus the First Amendment’s church and state separation has been used by secularists and the religiously minded alike in the defense of their respective causes. Such refusal to favor is the essence of how a liberal society preserves itself as such while availing itself of the dynamism of diverse, sometimes disruptive, perspectives and ideas.

And like the separation of powers, the Separations Principle accepts in advance that some of the benefits of concentration and unified action will be sacrificed, even in ways that may seem painful or costly. An autocracy may make the trains run on time, and in the information world, a perfectly unified Bell system might be able to guarantee a good connection 99.999 percent of the time. But those satisfactions come at too high a price.

As we have seen, power can be concentrated both by monopolistic control of a technology (such as telephony or film) and by the integration of industrial functions (as when a single entity controls every stage of creating and delivering the product). Such concentration through horizontal monopoly and/or vertical integration typically finds its license, its basis for societal acquiescence, in a specific kind of consumer gratification that size and centralization make possible: reliable, universal telephone service (the Bell system), radio shows backed by advertising (the networks), big-budget movies (the Hollywood studios and the media conglomerates), a dazzling device that seems to put the world in the palm of your hand (Apple and its collaborators). To see what is sacrificed to such efficiency, polish, and convenience, however, takes work, and to some it may forever remain invisible. It requires appreciating the merits of systems in which, so to speak, the trains do not always run on time. It requires an appreciation of the forms of speech and technical innovation that are excluded in the name of perfection and empire.

More than anything else, the preceding chapters chronicle the corrupting effects of vertically integrated power. A strong stake in more than one layer of the industry leaves a firm in a position of inherent conflict of interest. You cannot serve two masters, and the objectives of creating information are often at odds with those of disseminating it. That is the very first reason for the Separations Principle. Broadcast witnessed a dramatic winnowing of content with the introduction of the advertising-based model by the Radio Trust. Film, for its part, was subject to two regimes of severe private censorship. The first, under the Edison Trust, was a matter of simple monopoly: a patent on technology, restricting its application. But the second was entirely a result of Zukor’s and his fellow studio heads’ efforts to protect their empire by acquiring the industry’s means of exhibition. As technological monopoly, film was a boring, underdeveloped medium. But as a unified, fully integrated industry, film was vulnerable to the efforts of a few private individuals to enforce the Production Code, a regime of censorship without equal in American culture and entirely insulated from First Amendment challenge.

By fighting vertical integrations, a Separations Principle would remove the temptations and vulnerabilities to which such entities are heir. It represents the difference between free speech as an abstract ideal and the habit of fostering a practical environment in which the ideal can be realized. It is a recognition that the disposition of firms and industries is, if anything, more critical than the actions of the state in controlling who gets heard. The public square is a fine conceit, but in an information society it matters little that one is free to speak one’s mind in public; the public square, if it exists, is an information network nowadays.

The second broad justification for a Separations Principle may be derived mainly from the story of the AT&T monopoly that is woven throughout this book. Communications by wire, an incredibly dynamic market at the turn of the century, became a stagnant, oppressive industry under decades of AT&T rule. The sector began to resemble a small-scale version of the planned economies of the Soviet Union. We like to imagine that in the United States, we’ve never had such a manifestly socialist industrial regime. But of course we have, only with ultimate power in the hands of regulated monopolists in partnership with government planners. The Separations Principle protects entrepreneurial freedom by preventing stagnation and repression of business innovation, especially repression abetted by the state. It also promotes vitality and innovation in different parts of the information economy by preventing one layer from smothering the others.

There was, as I’ve allowed, much to admire about the internal efficiency of AT&T, particularly in its early incarnations, and the achievements of the Bell Laboratories cannot be doubted. But this does not negate the pernicious effects of Bell’s having gained control over too many layers of the industry and having blocked every way forward inconsistent with its consolidated vision of progress. Everything is a matter of degree. Had the monopoly limited itself, say, to local telephony, the trade-off between quality and innovation might have been far more tolerable. But it became a menace when it sought to control every single aspect of “the System”—all handsets, long distance, data communications—ultimately making itself the gatekeeper for all innovation. As a consequence, inventions from magnetic recording and electronic television to packet networking and fiber optics, developments feasible long before the moment with which they are associated, were squelched. The consequences of such action for economic growth and further innovation are incalculable: imagine trying to determine the effect on GDP growth if the broad rollout of email had been delayed for ten years to suit one company.

This brings me to the inadequacy of traditional efficiency calculations in regulating information industries. As we have observed, it has been the habit of the Justice Department to identify failures of competition by their effect on prices. In practice, however, not all dangerous arrangements inflate prices. The Edison Trust, one will remember, kept prices low by preventing more sophisticated product development. AT&T reaped handsome rewards by undercutting its competition with lower prices. The real problem with AT&T was in fact evident only after the government took decisive action to break up the telephone monopoly: as wave after wave of new services crashed on the market, beginning with voice mail and ending with the Internet, it became clear how drastically the Bell system had retarded progress. And when the government did take its long-deferred action, the suit was triggered not by objective calculation of malfeasance but by Bell’s increasing arrogance. With no objective or automatic standard of response to anticompetitive behavior, the application of the Sherman Act, a relatively rare and extreme step, is largely discretionary, unlike most responses to the violation of federal law. A Separations regime would take much of the guesswork and impressionism, and indeed the influence trafficking, out of the oversight of the information industries.

Finally, the third justification of the Separation Principle derives from an awareness of the historical role of government in the information industries. That awareness leads to an inescapable conclusion that what is sauce for industry should be sauce for the state as well.

Again and again in the histories I have recounted, the state has shown itself an inferior arbiter of what is good for the information industries. The federal government’s role in radio and television from the 1920s through the 1960s, for instance, was nothing short of a disgrace. In the service of chain broadcasting, it wrecked a vibrant, decentralized AM marketplace. At the behest of the ascendant radio industry, it blocked the arrival and prospects of FM radio, and then it put the brakes on television, reserving it for the NBC-CBS duopoly. Finally, from the 1950s through the 1960s, it did everything in its power to prevent cable television from challenging the primacy of the networks.

It isn’t merely that government has been slow to act against the bad; it has quite often misconstrued the good. Time and again it has stood beside concentrated power against the underdog at the expense of economic dynamism. Government’s tendency to protect large market players amounts to an illegitimate complicity, whether by reason of the firm’s involvement in important government concerns (such as AT&T’s work with the NSA) or a general sense of obligation to protect big industries irrespective of their having become uncompetitive.

Most of the federal government’s intrusions in the twentieth century were efforts at preventing disruption by new technologies in order to usher in a future more orderly, less chaotic. That might sound like a sensible objective, but the effort can easily be perverted into serving special interests. The simplest expression of the Separations Principle as it relates to the state is that government’s only proper role is as a check on private power, never as an aid to it. To grant any dominant industrial actor the protection of the state, for whatever reason, is to arrest the Schumpeterian dynamic by which innovation leads to growth, an outcome that is ultimately never in the public interest.

The Separation Principles I’ve called for require a certain breadth and ambition in its application. I’ve described it as more a constitutional than a regulatory framework, the former sort generally understood as being implemented by multiple institutions, including those restrained by it.* The norms found in the U.S. Constitution work not because the Supreme Court, the system’s final arbiter, is inherently, let alone supremely, powerful; in fact the Court can do nothing but opine. Rather, the system works because the president, the armed forces, and Congress swear fealty to it and the way the Court interprets it, generally observing constitutional principles. It is on such consensus that the Separations Principle depends, a sort of informal compact between the people and their government, an acceptance on the part of the three estates of government as well as the governed—that is, the information industry, and most of all, the people.

Let us talk about each party in turn, starting with government and the Federal Communications Commission, which has day-to-day authority over the information industries, the duty to specify the basic rules under which they operate. The commission’s birth was ignoble, and in recent memory its abolition has been called for by those across the political spectrum (including Peter Huber of the Manhattan Institute and Larry Lessig of Harvard University). And yet whatever its beginnings, from the 1970s through the 1990s, it effected some extremely successful policy, some of it arguably a prototype for just the sort of dispensation I am recommending.

It was through the FCC’s power that the Nixon administration implemented the first and still the most fundamentally important extant separation: that between carriage and services. It took the form of the FCC’s separating AT&T’s phone system from all the new services that had begun to operate on that network, from computer networking, through the Internet. The commission’s second great separation parted the phone networks from the equipment that attached to them, thereby creating a market not only for telephones but also for answering machines, faxes, and modems. The work continued in this vein in the 1990s, when, under President Clinton, Chairman Reed Hundt protected thousands of new Internet Service Providers from being bled to death by the cash demands of the Bell companies.

It is worth noting that the divergent political dispositions of the Nixon and Clinton administrations were of no matter in the course of this progress. In this realm, both subscribed the same essential principles: that a free market would foster economic growth, and that government’s only proper role in the market was to ensure opportunity, not to favor entrenched interests. The subsequent history speaks for itself. True, phenomena like the infotel revolution of the late twentieth century are complex macroeconomic events, and this one resulted from an incalculable combination of many factors, from the “peace dividend” created by the end of the Cold War to certain technological advances. But it would be impossible not to count among the foremost what was, in effect, the FCC’s extensive pilot program for a Separations regime—a use of federal regulatory power not to limit freedom (as it is popularly believed to do) but to promote it. It is, in other words, a case of regulation achieving the good we commonly ascribe to deregulation.

There is a persistent misconception in the annals of American information industries that the radical transformation of the sector beginning with the rise of the computing Internet in the 1970s and continuing to pulse ever since was essentially owing to a return of laissez-faire, a purer free-market capitalism that had fallen out of favor after the Great Depression and was slow to regain its natural place. If the stories in this book tell us anything, however, it is that the free market can also lead to situations of reduced freedom. Markets are born free, yet no sooner are they born than some would-be emperor is forging chains. Paradoxically, it sometimes happens that the only way to preserve freedom is through judicious controls on the exercise of private power. If we believe in liberty, it must be freedom from both private and public coercion.

What was understood in the 1970s, and what needs to be understood again, is the role of such restrictions in preserving both the free market of goods and services and the free market of ideas. While the idea of regulation as a safeguard of freedom in any sense has come to seem incomprehensible—at least in the politics of sound bites—it is an idea perfectly at home in any serious understanding of the nature of law and of government. What is the First Amendment, or the Fourth, if not law that restricts power for the protection and promotion of freedom? The controls on private power to protect individual freedom are no different. Whether the state restricts a corporation from dumping toxic waste in a river or toxic assets in the financial markets, would one more reasonably regard this as an abridgment of freedom of the malefactors, or a protection of the freedom of individuals and businesses that would be adversely affected?

The implementation of a working Separations Policy, then, falls in the first instance to the Federal Communications Commission, where it finds its expression mainly in two classes of regulations. The first class comprises antidiscriminatory or common carriage rules, the ancient laws meant to govern how firms that operate or own essential infrastructures treat those who use those infrastructures. As we’ve seen, since antiquity, certain functions have been recognized by the state as being essential to the economy and commerce and therefore necessarily subject to nondiscriminatory policies. For such firms, also described as “public callings,” freedom and opportunity for profit come with responsibility as well. In the American information industries, such duties were first imputed to the telegraph and telephone companies by the Taft administration in 1910; once it is recognized that a network has passed from a novelty to a necessity, the ancient justifications for common carriage reappear, even if under different names.

Such as “net neutrality,” a concept I have espoused in other contexts, which is essentially the application of the idea of common carriage to a twenty-first-century industry. By this specific nomenclature I mean to add only a somewhat more specific understanding of how information networks function, as compared to, say, the operation of the only ferry to the mainland. Discrimination can take various forms when a network traffics in information packets. For while the boatman may fail in his obligations by refusing you passage or charging you more than the next passenger, the keeper of an information network may also speed up or slow down your transmission, or give right of way to one over another stream of traffic, among other manipulations. The Internet’s nature affords many options, but whatever may be the justification, a vibrant information economy cannot countenance discrimination at a level so basic as transmission on a public network. If the carrier is determined to capture greater profits, the carrier ought to be obliged to do so by expanding his capacity, not by charging similar parties different prices, bestowing on the favored a competitive advantage.

The second essential component of a Separations Policy concerns industrial structure, which, I have argued, is the ultimate determinant of the scope of expressive freedom in our time. Here, the priorities must be both the prevention and dissolution of large-scale vertical mergers in the communications industry, a stricture perfectly within the commission’s legal authority to impose. Under such a rule, a merger of Comcast, the emerging broadband monopolist for much of the nation, with NBC or Disney—a combination obviously resulting in the sort of conflicts of interest a Separations Principle is meant to prevent—would simply be out of the question; it would thus not be subject to the customary gaming of the commission’s approval process whereby applicants offer marginal concessions in exchange for extravagant license. It is a rule the FCC can and should effect without delay. The histories we have examined make clear enough their power to do so, and also the unsavory consequences of allowing the creators of content to be conjoined with its disseminators.

Despite some good work done by the FCC that I have acknowledged, entrusting to that one agency total responsibility for the nation’s information policy would be a serious mistake. The FCC is inevitably close to the action—sometimes too close to be perfectly impartial, and always in danger of capture in ways obvious and subtle. History shows what problems can result. Despite some finer moments, the agency has on occasion let itself become the enemy of the good, effectively a tool of repression. And so what is needed is not only an FCC institutionally committed to a Separations Principle but also a structural arrangement to guard against such deviations, including congressional oversight as well as attention and corrections from other branches of government.

Here is where antitrust law becomes so important to communications policy. It is inevitable that the FCC will occasionally fail in its mission, and for this reason the government’s competition authorities, the Justice Department’s Antitrust Division and the Federal Trade Commission, are necessary as a backup. Notwithstanding my earlier criticism of the antitrust system’s narrowness of focus, the DOJ and FTC have a vital role to play generally, and particularly in one pernicious situation: when a private power has become so closely affiliated with government that only the government can take action against it. We should at least be able to depend on antitrust as a last safeguard against the FCC’s lapses.

As things stand, the American antitrust regime, unlike its European counterpart, is virtually dormant respecting the entertainment and communications industries. That’s not necessarily a bad thing, for these are fast-moving industries and Sherman is a slow-moving law. And no one would deny that the awesome power of the law should be used sparingly, working more as a deterrent than a ready remedy. Nevertheless, its application must be a far more credible eventuality in those relatively rare instances when an industry has manifestly defeated normal efforts to place reasonable constraints on it, and specifically whenever it has somehow managed to circumvent the FCC. To fulfill such a mandate, the antitrust law must be responsive to its own discrete criteria, not deferring to the FCC’s oversight of the industry, which of course is not inerrant. An antitrust law preempted by FCC discretion is no safeguard at all. And in a constitutional democracy we simply cannot do without such a line of defense. For once it is entrenched in our national life, particularly once an industry has virtually merged with the state, such a power can be dislodged in no other way.

Reasonably effective though I believe the FCC/Antitrust model can be, given the force of the Cycle it would hardly be prudent to rely on government institutions exclusively to ensure a durable compliance with a Separations Principle. But how else do we achieve such a goal?

It may sound improbable, if not hopelessly naïve, but one place to apply pressure is among members of the industry itself. If legal scholarship over the past few decades has proved anything, it is that we have little choice. The better part of compliance with rules of all sorts actually depends on the power of self-regulation, not the threat of force, though of course that threat can help. Both church and state (or at least individual politicians) may occasionally feel motivated to push the boundaries of their coexistence, but overall both institutions tend to accept the wisdom of the divide between them, which is why it works. The consent of the governed is not strictly necessary, but it helps.

Likewise the information industries, whatever their actions may suggest to the contrary, are much closer to an acceptance of the Separations ideal, at least in theory, than one might imagine. It should be recognized that there are uncodified norms governing the behavior of infotel firms in the twenty-first century, ones that did not exist decades ago, such as the norms that stigmatize site blocking, content discrimination, and censorship, broadly defined. Consider that when phone or cable companies have been accused of blocking an Internet site, their tendency has been to deny it, or to blame a low-ranking official, rather than to baldly defend a right to block or censor, as for instance the Edison Trust once did. While not always resulting in a practical difference, the change nonetheless suggests that such behavior has become malum in se. And the consensus to this effect is a powerful force.

Consider all the mischief that the information firms could undertake but choose to eschew. Cable operators, though not obliged by law to do so, generally carry channels that a cruder calculus would motivate them to block. Likewise, Apple, the maker of the iPhone, has been, in effect, shamed into allowing apps, such as Skype or Line2, that compete with its own services. Meanwhile Verizon, a born-and-bred Baby Bell, gains public applause by publicly declaring itself an “open” company. And Google, one of the great corporate hegemons of our time, does likewise under its banner “Don’t Be Evil.” Whatever its missteps and shortcomings, that firm has, so far, done more than any other to promote what we have been describing as a constitutional policy of separations for the information industry. And while the extent of Google’s commitment has been exceptional, the basic impulse is not.

In fact, rare is the firm willing to assert an intention and a right to dominate layers of the information industry beyond its core business, an ambition that someone like Theodore Vail, Adolph Zukor, or David Sarnoff would have proclaimed with unabashed glee. Now of course, some of these high-minded professions we hear might be cynical constructs of public relations departments, a scrim behind which a company can hatch some diabolical master plan. But I find little evidence of that level of conspiracy. (Generally, the Cycle moves in a manner more akin to the classical invisible hand than to Strangelovian machinations.) However insincerely embraced, corporate norms have in many ways proved to be a far more powerful deterrent to misconduct than regulations, which in corporate psychology exist only to be circumvented, preferably though not necessarily by legal means. Certainly this is so for the financial services sector. Perhaps in this way, too, information industries show their exceptionalism.

Anyone who would discount the power of such norms might care to know what a world without them would look like. For that, one need search no farther than China, where blocking, discrimination, and censorship of the Internet are perfectly routine and in no way stigmatized. What is so striking (although, I would argue, not surprising) is that the vast preponderance of Chinese censorship is private, undertaken voluntarily, rather than enforced by actions of the state. In that society, it is as if the American commandment “Thou shalt not block” has had a minus sign placed before it; there exists a diametrical inversion of our norm, an orientation influenced, to be sure, as ours is, by codes both legal and extralegal, but to the opposite effect.

Many would consider it simply a foolish denial of capitalism’s red tooth and claw to look for virtue among corporate titans. But as our narrative has also shown, the urge to dominate is never one of simple greed or the warped megalomania of a James Bond villain. It is in fact heartening to discover in the history of the information industries a recurring strain of idealism, even if it occasionally comes to unwholesome fruition. The motivations of information moguls can almost never be exhaustively described in terms of simple greed and vanity. Were it otherwise, we as a culture might be irretrievably lost. For ultimately, no matter how many regulatory fetters we may succeed in placing on them, the men and women who run the information empires of today and tomorrow will inevitably have enormous power over the extent of our free expression. Their values will always be the first line of defense, but so, too, will their vices be the most immediate source of public outcry. Whatever external system of controls might be created, there is no substitute for self-control. Put another way, we have hardly managed to improve on the Roman conception of virtue in governance.

If, as I’ve suggested, corporate norms can provide a critical basis for self-regulation, the question naturally arises: Where, exactly, do such norms come from? The answer is, quite simply: From the general sentiment, the popular sense of right and wrong. And so this is where the ordinary citizen becomes involved in the Separations cause. I’m not suggesting that every American need become an avid follower of FCC proceedings. But the population’s general “information morality,” so to speak, is decisively important. In any industry, corporate behavior that strikes most people as wrong can bring a great cost to the perpetrator. But information commerce, as we have repeatedly observed, is more entangled with daily life than any other sort of commercial enterprise. Even the misdeeds of an industry as vitally important as health insurance do not have the potential to provoke such instantaneous reaction as the blocking or impeding of network traffic. The ever-growing wired majority is a particularly vociferous one, quick to adopt and exploit every new application for self-expression.

Can we really depend to any degree on a popular groundswell to accomplish anything significant? In fact, every existing principle of separation, every effective limit on power in the American system, manages to be upheld precisely because of a broad consensus actively favoring it. Laws may continue on the books indefinitely, even after falling into desuetude. But the laws that continue to bite are those for which there continues to be a strong consensus. Thus, for instance, years before the Supreme Court struck down antisodomy statutes in the fifty states, prosecution of violators was already rare in nearly all jurisdictions because of a lack of strong consensus. Democracy expresses itself not only in the erection of walls but in the enforcement of prohibitions.

In this way, a successful Separations regime ultimately depends less on the enactment of useful laws—although we need these, too—as on the cultivation of a popular ethic concerning our society’s relation to information, an ethic consistent with the importance of information in our individual and collective lives. A strong general conviction that it is wrong to block sites on the Internet, wrong for studios to censor films that deal with controversial problems, can do more to secure our freedom than an army of regulators. For the Cycle may have enormous force. Those who lobby government on behalf of the information industries may be legion. But in a society such as ours, they should be fairly matched by a generally elevated awareness of the imminent perils of a closed system.


Here at the very end it behooves us to return to the two questions posed at the beginning of this book. First, why should you care? Second, is the Internet different?—or, put another way, have we seen the last of the Cycle? The two questions are in fact intertwined, and to answer the second is to leave little doubt about the first.

Notwithstanding what may seem the slow, progressive realization of information dystopias à la Aldous Huxley, the outright repressions of speech, of innovation, and of entire industries might seem a relic of the twentieth century and its totalitarianisms, nothing to fear in our day and age. It cannot be denied that the Internet has ushered in a time of unprecedented diversity and ease of communication and commerce, a broadly available way of reaching millions of people. And each of those millions of networked parties can in turn claim the role of what was once called, with appropriate distinction, a “broadcaster.” Beyond the Universal Network, cable television carries hundreds of channels, our mobile phones exceed the communicators of Star Trek in functionality, and even mature industries such as print journalism and book publishing have sought renewal in opening up to an unprecedented variety of voices, sensibilities, and forms. While the decline of many once proud industries is cause for real sorrow, we do, I think, live in what is in some ways an informational golden age. Television, the Internet, film, and mobile devices each force one another to become better. The breathtaking diversity of content in our age has actually engendered in us an anxiety perversely contrary to the one that plagued our ancestors: it is not that there’s too little produced to meet demand, but that there’s way too much to sustain all our would-be writers, reporters, and thinkers in a world of content so cheap and abundant.

Yet if we generally like the way things are now, we must also ask whether our current situation is really so different from the open ages of radio, film, or the telephone. Might it not have also seemed in those times that the orgy of limitless entrepreneurism would never end? The point is that we are near the high end of a pendulum arc that, so far, has always begun to swing in the opposite direction—toward greater integration and centralization—with a force that can seem inexorable. So let us evaluate the basis for suggesting that “this time is different.”

The cornerstone of this view is that with the coming of the Internet, we have been, at least as makers and consumers of information, “saved”; now, as with the Resurrection, things can never be the same again. The Internet inaugurated a principle so fundamental and powerful that it cannot be abolished; ever after, all will agree that open beats closed. It is an attractive notion; but in fact it is an article of faith in a domain of experience where fact, not faith, should guide us. It is true that the Internet naturally harnesses the power of decentralization and defies central control, but in the face of a determined power, that design alone is no adequate defense of what we hold most dear about the network.

The simple fact is that the Internet is simply not the infinitely elastic phantasm that it is popularly imagined to be, but rather an actual physical entity that can be warped or broken. For while the network is designed to connect every user with every other on an equal footing, it has always depended on a finite number of physical connections, whether wired or spectral, and switches, operated by a finite number of firms upon whose good behavior the whole thing depends.

There is a dark underbelly to the diversity of content and services that the Internet has brought us, one that leaves it more vulnerable to centralization, not less. The Internet with its uniquely open design has led to a moment when all other information networks have converged upon it as the one “superhighway,” to use the 1990s term. While there were once distinct channels of telephony, television, radio, and film, all information forms are now destined to make their way increasingly along the master network that can support virtually any kind of data traffic. This tendency, once called “convergence,” was universally thought a good thing, but its dangers have now revealed themselves as well. With every sort of political, social, cultural, and economic transaction having to one degree or another now gone digital, this proposes an awesome dependence on a single network, and a no less vital need to preserve its openness from imperial designs.

Where might the next domineering empire come from? It is impossible to predict, though history offers some good guesses. It could arise from a takeover of content by the great carriers of our time, a future whose harbinger might be the takeover of NBC-Universal by Comcast, an even vaster effort to realize what AOL Time Warner failed to be. It might arrive through some further melding of Hollywood with AT&T in the devices marketed by Apple and friends. Or it could begin on the day that mighty Google, still the greatest corporate champion of openness, decides that its survival has come to depend on integration and the elimination of whatever competition it has. Whatever the source, the prospect of a new imperial age, even if only partially visible now, seems to me as likely as it ever has been at this point in the Cycle. This time is different: with everything on one network, the potential power to control is so much greater.

It is also possible that we could undergo such a consolidation blissfully unaware. Dazzled by ever newer toys, faster connections, sharper graphics, and more ingenious applications, we might be sufficiently distracted from the consequences of centralized control. After all, many still recall living perfectly productive and contented lives in the age of Hollywood’s Production Code or the years when a long distance phone call was an expenditure to give one pause. With systems and industrial orders changing faster and faster, however, and with virtually everyone nowadays—not only hobbyists as in days past—enjoying an astonishing variety of venues for self-expression and entrepreneurship, it is difficult to imagine a new order not coming as a very rude awakening.

There is no escaping the reality that we have evolved into a society in which electronic information represents the substrate of much of daily life. It is a natural outcome of our having advanced past the mechanical age. And just as our addiction to the benefits of the internal combustion engine led us to such demand for fossil fuels as we could no longer support, so, too, has our dependence on our mobile smart phones, touchpads, laptops, and other devices delivered us to a moment when our demand for bandwidth—the new black gold—is insatiable. Let us, then, not fail to protect ourselves from the will of those who might seek domination of those resources we cannot do without. If we do not take this moment to secure our sovereignty over the choices that our information age has allowed us to enjoy, we cannot reasonably blame its loss on those who are free to enrich themselves by taking it from us in a manner history has foretold.

* This point might be described as axiomatic in communications scholarship, and indeed the justification for the communications departments found at many universities. It is, for example, the whole premise of Harold Innis’s Empire and Communications (1950), which held, rather boldly, that the nature of various civilizations from the Egyptians onward was much the product of their communications systems. Hence, the problem of cognitive entrenchment—a problem for any part of society—is much more serious when we speak of an industry fundamental to democracy. For humans, speech—in the broad constitutional sense extending beyond simple oral or even verbal communication—has effects and purposes that transcend mere transactional utility. To offer it and to consume it can take on a spiritual dimension that ensures that a television or mobile phone can never be remotely considered, as it were, a toaster that doesn’t toast but happens to present pictures and sound. Whether we have in mind a song, a film, a political speech, or a private conversation, we are considering forms that have the potential to alter sensibilities, change lives. Every one of us has read or watched something that has made an indelible impression, impossible to quantify in relation to production and distribution costs. For such a reason did Joseph Goebbels describe radio as “the spiritual weapon of the totalitarian state.” Indeed, for such reasons is there almost always, behind every political revolution or genocide, a partnership with some kind of mass medium. That kind of claim can’t be made of orange juice, heating oil, running shoes, or dozens of other industries, no matter their size.

* More broadly, it seems clear to me that a pure antitrust approach is inadequate for any of the main “public callings,” i.e., the businesses of money, transport, communications, and energy. One reason is fairly simple: historically, the application of those statutes has been triggered by manipulation of consumer prices and certain other very particular abuses of market power; but those aren’t the most troubling problems in this context. More subtly, there is the problem of taking an after-the-fact approach to a commodity so vital to our basic liberties: a framework that has worked well enough for oil and aluminum is ultimately unsuited to an industry whose substrate is speech.

* It is critical to understand that I do not mean a constitutional principle in the formal sense, that is, an amendment to the U.S. Constitution. Rather, what I mean by “constitutional principle” is a norm taken as axiomatic or generally accepted to such an extent that to the degree it regulates, the regulation is a matter of self-regulation.