Cover "The Master Switch"Tim Wu, 2010: The Master Switch: The Rise and Fall of Information Empires. New York: Alfred A. Knopf.

The main theme of “The Master Switch” is the “oscillation of information industries between open and closed”, a phenomenon  Tim Wu finds and tracks in “any of the past century’s transformative technologies, whether telephony, radio, television, or film”, referring to it simply as “the Cycle” (p. 6). The historical description unsurprisingly culminates in an analysis of current battles around net neutrality and the openess of the internet.

Wu sees “a chasm opened between Google and its allies like Amazon, eBay, and nonprofits like Wikipedia on the one side and Apple, AT&T, and the entertainment conglomerates on the other” (p. 289).  Those two coalitions, however, are not to be considered “one pack of wolves chasing another” but rather as “polar bears battling lions for domination of the world”:

“Each animal, insuperably dominant in its natural element – the polar bear on ice and snow, the lion on the open plains – will undertake a land grab where it has no natural business being. The only practicable strategy will be a campaign of climate change, the polar bears seeking to cover as much of the world with snow as they can, while the lion tries to coax a savannah from the edges of a tundra.” (p. 289-290) 

In what follows, Wu leaves little doubt that he sides with Google and its allies in this battle. What is missing in Wu’s description, however, is at least a small account of Google’s so far boldest attempt to provide content by itself: the Google Books project (for details, see “Pamela Samuelson on the Future of Books in Cyberspace”). This, of course, would have made depicting Google as the antagonist to the content industry substantially harder, while it might still be true in areas other than books (such as, for example, YouTube videos).

As a solution to the problem described throughout the book as “the cycle”, Wu suggests the “Separations Principle”, which should be “more a constitutional than a regulatory framework” (p. 308). This resembles Braithwaite’s (2002, PDF) distinction between “rules and principles” in that it should be “taken as axiomatic or generally accepted to such an extent that to the degree it regulates, the regulation a matter of self-regulation.”

On the very last pages of “The Master Switch”, Wu speculates about the upcoming dangers for the internet’s openness:

“Where might the next domineering empire come from? […] 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” (p. 318)

Ironically, exactly this merger has recently been approved by the U.S. Federal Communications Commission (FCC) in a decision that manages to integrate tragedy and farce both at once: Meredith Baker, member of FCC’s five-member regulatory board that voted 4:1 to approve the merger, immediatly after the decision announced that she would resign to become Comcast-NBC-Universal’s senior vice-president of governmental affairs (see “Wu’s prophecy and Stewart’s commentary“); a move, which makes Wu’s book all the more important.

For all interested in a more detailed presentation and discussion of Wu’s ideas I recommend the one-hour long video provided by Harvard’s Berkman center below.


PS: As an organization theorist at a business school I cannot help but comment on a small side-remark made by Wu in a lengthy footnote on page 284. There Wu argues that “vertical integration serves as often as a means of corporate defense as efficiency” and asks “whether this defense function suggests an alternative explanation to the prevailing theory of the firm as shaped by the relative efficiency of internal and external contracting, which Ronald Coase articulated in 1937.” Luckily though, organization studies is not economics and therefore comprises at least some variety of theoretical approaches. And one approach in particular deals with the defense function of vertical integration, namely the so-called “Resource Dependence Theory”, originally developed by Pfeffer and Salancik in 1978.