 Welcome to everyone. Judging by how full the room is, Tim needs no introduction, but that doesn't mean I won't say something. Tim, we're extremely thrilled to have you here teaching at the law school for the winter term and speaking here. Some of you may have heard of a concept called net neutrality. Tim has something to do with its origination and its centrality and definition, and we all suffer miserably as a result for the last eight years. But the occasion of this talk is Tim's new book, which is really something that all of you and all of you, this is webcasts, so all of you out there webcasts should read, must read, need to read in order to understand where we stand, where we've come from, where we're going in communications policy. It really is a fantastic piece, and obviously there are books back there that you should acquire out of respect for the author. I think you might even be willing to sign them if you ask nicely. So Tim, thank you for coming and doing this. We're thrilled and excited to hear you. Thank you. Hello everyone. It is an incredible pleasure to be back at Harvard and the Berkman Center. I was a student here in the 1990s, and I guess here when the Berkman Center was one yet another of Charlie Nessan's Strange Ideas, where it was this thing that was going to be started and was going to change everything and said, well, that's not going to work. We're going to the Internet Center. That sounds crazy and of course, Charlie ends up being more right than you would think about things and it has in fact changed the world. I'm incredibly grateful also to Harvard for having me here as a visiting professor, and I'm grateful for you who have come out here today. So I'm going to talk about the book and I want to start by rewinding to the year 1934. I want you to join me in picturing a man. His name is Clarence Hickman, an engineer at Bell Labs, and he has in his office a secret machine. This is a machine with no parallel in the world. It is the only one of its kind in the entire world and it is in his office. About seven feet tall, complicated machinery, and it does the following. When you call Mr. Hickman, and should he not be in his office, the magnetic tape recorder inside the machine would beep and allow you to leave a message. Mr. Hickman had the first answering machine in the world in 1934 and it was a top secret device. Now, what was important about this device, the answering machine, wasn't so much just the convenience of leaving messages for people, but the fact that inside the device was magnetic recording tape. Bell Labs had invented, as it often did, magnetic recording tape and had taken the invention further than anyone else in the world other than scientists in Nazi Germany at the time. There was only two instances of magnetic recording tape in the world at this point and both were top secret. The fact that Bell Labs invented this was not unusual in the sense that Bell Labs invented a lot of the things in the 20th century that were important. To the later development of technology. Now, I should add that magnetic tape may seem sort of antiquated, mixed tapes and maybe the Betamax, but ultimately the underlying technology is the same technology that begins to power the hard drive, which ultimately becomes a server, which ultimately anchors every single internet company there is, the entire computer industry and so forth. So this is an extremely significant invention and Bell has it and no one else does. As I said, this is not unusual for Bell Labs, company that I forget the exact number, but a company laboratory that won six or seven Nobel Prizes more than most universities. They had scientists on staff, full-time quantum physicists who just worked on wave particle physics, no particular link to the telephone. Later on in Bell Labs history you invent things very dear and near to the hearts of geeks, like the C programming language, I believe one of the authors of which or maybe the author of which is at Berkman right now, Unix, other important invention. So Bell Labs was magnificent and was run on the back of the mighty Bell Monopoly. What made Bell Labs partially so successful was the fact that Bell controlling an absolute government guaranteed monopoly to telephone lines could raise enough money and centralize it to direct it to what it considered the most important projects. So the tape recorder was another example of their great promise and research ability. However, the story here changes because the answering machine, despite the fact it was working in 1934, reached consumers in approximately the year 1981. The underlying technology tape recorder would reach America after the war due to imports from Germany. Bell itself, despite the fact it had this invention, decided to suppress it. And in fact, it was only a historian who came across Mr. Hickman's lab book in the 1990s that we know in fact that Bell discovered the magnetic recording tape before anyone else because otherwise it was lost to history. Why possibly would AT&T, not Bell Labs, but AT&T of the company, why possibly would they want to bury an invention with so much commercial potential, so much power to change and influence the future? Well, a memorandum written by AT&T management, which this historian named, this historian got a held on, shows the reason and it's fascinating in giving us a glimpse to a different era of thinking. AT&T was convinced that the tape recorder and the telephone were fundamentally incompatible technologies. It did not believe the two could coexist without one displacing the other. Wrote in this memorandum, should the tape recorder become a widespread technology, it will lead to a decline in telephone usage and a reduction in the utility of the telephone in many instances. Now, why was that so? Well, first reason Bell put forward AT&T thought was that businessmen who now were important uses of the telephone would not trust the telephone if it was possible that their conversation were being recorded. Perhaps they were agreeing on the price of something, would put that in contract. The possibility of what I guess would be considered parole evidence, the possibility of a simultaneous recording of the telephone would lead to the abandonment of the telephone for important conversations. The more interesting reason, and this I don't fully understand completely, was that Bell's management had estimated that some number possibly a large as two thirds of the conversations on the telephone were obscene or indecent. They theorized that the great secret behind the telephone was it was used for people to exchange intimacy as of a kind that would never even permitted in any other fora. Confirming the length of cyberspace and sex are never too far apart from each other. And so the telephone or the possibility of a recording device would lead people immediately to abandon the telephone and therefore it must be suppressed. And indeed the answer machine, while it did appear in the 70s as a business tool, was not available to the general public sometime until the 1980s when the SEC forced AT&T to allow foreign attachments. Anyway, this story of these two technologies is designed to give you a sense of the kind of things that the book is, I'm interested in the book. It's important to talk about Bell, the exemplar of American communications monopoly, a startup company here from Boston at some point, because it is a great example of what I see as a recurrent pattern described in great detail in the book. The recurrent pattern in the information industries is one of a cycling between periods of great openness, promise, entrepreneurial activity, open competition, radical speech movements, on the one hand, and on the other hand, periods of consolidation, monopolization, or cartelization, a more closed market, a direction of entrepreneurial activity, or towards improving the monopolist products, and what we can generally refer to as a closed market structure. Telephone is a great example of this. After initial monopoly, you have a period, much discussed between approximately 1900 and 1921, where if you were interested in a startup, young man or young woman at the time, young man who has graduated from school, thinking about getting into a new business, why not start a telephone company? Why not go wire up your own telephone company and try and make some money? This was one of the hot startup industries of the 1900s. But the period that lasted about 15 years, and as I said, was a period of openness and promise, and ultimately, for reasons that seem to make a lot of sense at the time, as they always do, led ultimately to the recapture of the industry by the Bell system, by AT&T, and the creation of a lasting monopoly that ruled American wire communications for almost 70 years. Another example discussed in detail in the book is the radio industry, which 1920s, starting in 1921, was again an industry that was one of low startup costs, one where amateurs or clubs, churches, schools were some of the owners of radio stations. I have a quote from Lee DeForest, where he says, any boy can have a radio station if he really wants to, any boy. Very limited, very, very light regulatory influence, and this ultimately becomes, moves from this more open era into something dominated by fewer, more powerful stations. The FCC plays a powerful role in making sure that a different kind of radio station succeeds and ultimately the rise of the radio networks, NBC, CBS, later ABC, fashion out the rib of NBC and so forth. That's the same sort of pattern. What I've described, and I don't want to describe the whole book to give away a little too much, is this repeated pattern whereby you have a new invention and in fact the new invention, these disruptive inventions are the seeds that lead to these periods of openness and Utopian vision and great hopes for the future. A sense of things will be different now. A sense that things can never be the same. This is what people felt after the invention of the radio very clearly. Sense that God was involved with the early radio. If anything, and some of you who are historians will know this, the rhetoric around the radio exceeded that surrounding the early internet in the sense that there was this idea that finally God had given man a way of overcoming the barriers between us and how possibly could we imagine war in a world where you can reach everyone at once? How possibly could we have misunderstanding and conflicts when we're all linked by radio waves? When the world, as Telsa once said, is linked as though a single brain by radio waves, how could we possibly have conflicts or disagreements? So these periods are characteristic. What leads from these sort of open hopeful periods into the more closed periods? Well, the repeated pattern is the rise, usually a single individual or a band, of charismatic strongmen, moguls, who arrive in an industry which has been in the open state for 10 or 15 years, one in which the novelty has begun to war out, one in which people, consumers have a taste for a little more, as something's a train is written about, Johnson's a train, a little more security, maybe a little more reliability, convenience, higher production values, a little less amateur hour. You Steve Jobs recent quote. They promise a great product whether it is AT&T with its one network of the 1916s, starting in 1908 by the 1910s, a phone that every time you pick it up, you have a dial tone as opposed to half the time, or some of the time, a phone that can reach everyone, and a phone that never fails. NBC, the first network, actually the second network, offering a better radio program, better broadcasting, plots, characters, actors, everything that we think of as associated with mainstream entertainment, and prime time, promised by this network, and delivered. The film industry, an open industry in the 1910s, chaotic, highly diverse, highly, the origins of niche marketing with films, special movie theaters for Irish people, movie theaters for black people, for Jews, communist films, fascist films, white supremacist films, extremely diverse, the offerings of silent film, the 1910s, would shock mainstream America today. Aldolf Zucker, the ultimately not the founder, but the president of Paramount Pictures, says we will offer a different and better kind of film. Through full vertical integration of the industry, owning the theaters, owning production, owning distribution, guaranteeing our revenue base, we promise you a new kind of film, with special effects, with sound, more Warner Brothers contribution, eventually color, fancier theaters. In short, everything we think of as Hollywood, promised, and beloved. So what I'm suggesting to you is that the closing, it doesn't happen by some kind of authoritarian takeover. It doesn't come as a bitter pill, it comes as a sweet pill, as a tabloid, easy to swallow, beloved, and in fact, most of the monopolists in history, or the cartels, which take over information industries, deliver a golden age, deliver a period of unprecedented creativity of a certain kind, less diversity, but innovation, frankly, just a great product. That is the key, and that is what leads the markets towards the closing, centralization. Well, I thought I'd use the rest of my time to address a question that seems like a very Berkman question, which is I've described this pattern, we've seen it's roughly been the fate or the story of the film industry, telephone industry, the radio industry, some degree the television industry, slightly different story, cable industry, some variations, telegraph. Is this too to be the fate of the internet? Is the internet in some sense destined to follow the same story of all the other darling young new media in the 20th century? Or is there something intrinsic? Is there something different? Are we living in times that are truly different than the 1950s, 1960s, 1930s? Have we flipped some kind of digital switch that makes everything different? Well, the answer is I don't really know. The answer is I don't have an answer, but I wanna try to suggest some reasons you might think so or might think this won't happen. The reasons you might think it won't happen, I give you four or five, let's say four. First of all, there's a sense that there was something very radical and very original about the internet revolution. That the ideas of to be a little bit technical, a layered, decentralized, packet-based, TCP, IP, distributed, decentralized networks are just too powerful once they're at least put back, that the core technologies in the center of the internet are so different than the technologies that were centered to the other, to the radio networks or to Bell, that there's just no going back, that they invented something in the 60s that it's impossible to unthink and therefore will always keep the internet open. One possibility, you know, the good new, the moment, the revolution has happened, nothing will ever be the same again. Another reason, more maybe straightforwardly practical, is to say that we've designed our markets, we've opened our markets in different ways, as a matter of policy and culture, whereby monopoly does not get the support of government anymore. Monopolists kind of left a fend for themselves. And if you look back as a Hayekian theory, to be more precise about it, Frederick Hayek said that every monopoly is really ultimately created by the state. And the story that I've told about telephone and radio and everything else, well that was just because ultimately the state, the government wanted there to be a monopoly, the government is no longer committed to monopoly as a preferred form of communications in America, and therefore absent that government support, monopolists don't have a real chance of maintaining themselves, ultimately they will crumble. Microsoft, Mighty in the 1990s, by 15 years later, actually still pretty mighty, but doesn't quite seem as scary to people for whatever reasons. I gave a talk at Microsoft on similar talk on this book, and I think they were a little offended that they weren't. I think they wanted to be included among the scarier monopolists, they were a little, they seem to be offended by their exclusion. Although they like the parts about Google. In fact, every question was like, isn't Google a monopolist that needs to be broken up? I think I answered that question last time. So the idea is that the government, it's a government that creates monopolies, haven't created any more, and they don't want it, so therefore they won't go away. That's the third reason, third argument, to say we have redesigned our markets, or our capital market structures in such a way that we have a permanent industry of entrepreneurs who are continually working to overthrow monopolies. And this is the rise of venture capital funding and entrepreneurial culture. This is more of a business school theory than a Hayekian theory. So anytime a company gets powerful enough, well, people start leaving, venture capital start funding something else. Incumbents still have funding in the public markets, but we have a setup system for challenging incumbents in a way we didn't have 100 years ago. Now once AT&T, in fact, it's the opposite. If you look carefully at AT&T's ascension to the throne of telephony, when you see what made AT&T king of the telephone it works as many things, but one of those things was a fact not known to everyone that the chairman of the board of AT&T in its aggressive years was JP Morgan who eventually controlled the company. And depending who you listen to, and there's a lot of conflict over this, one of the theories is that AT&T managed to destroy its competitors by starving them of funding on American and European capital markets. So they had no way to do the crucial thing they needed to do the challenge AT&T, which was to finance and fund and build a long distance network. They could only fight AT&T with their own long distance network, they didn't have one, and that was because of funding, the argument is today they would get funding and that would be a different story. Here it is, maybe this will be the last one. It's a sense that culturally, America has no longer a place that to the extent it once did worships bigness. That we no longer automatically equate progress and size. Once upon a time, or not even once upon a time, 1930s through somewhere in the 1970s, when you read anything, or 20s, anything you read in that period, you have the sense that the future is always about more centralization and more scale. That the more centralized and the larger you are, the more progress you've made towards reaching whatever that endpoint of future is. If they imagined a singularity back then, that would have been in the company of the rules of entire earth and was organized from the center. The dominance of, if you're a management theory person of Frederick Taylor type theories, Taylorist economics, Fordist economics, that saw the future in the terms parodied and brave new world, is no longer completely with us. People, I think, are slightly today more suspicious of size. Urban planning, Jane Jacobs is sort of the starting point. You don't have the same kind of glorification of the mighty. Give some of it. You don't have the same degree that you had, particularly in the period by the 1930s. So these are all the arguments that things are different, what happened before will never happen again. Let me look at some of the arguments, though, that things haven't changed as much as you might suggest, particularly in the information industry. And I'll have three or four, depending on how things go. The fundamental point is that well, many things have changed. Neither human nature nor the laws of economics have changed. And many of the factors that gave rise to monopoly before, the economic causes of natural monopoly have not necessarily disappeared. You look carefully at the communications markets. 50 years ago, all the power lay in the local loop and in spectrum. In the last mile, the real estate, the wire that connected the home to the network, whatever that network was, and the spectrum, the airways. While things are supposed to be different, the power still lies in the local loop and in spectrum. You can't start a wireless phone company with today. Maybe things will change. People are always saying they're changed, but they haven't. You can't start a wireless phone company unless you have $10 billion and the ability to bid on spectrum or to get it from somewhere. You can't really start an internet service provider. I mean, something that provides service right to people's homes, unless you're a cable or a phone company. Many companies have tried. All of them are in the graveyard. Clear wire's not quite there, but any day now. The company I remember when I was, I told my class about this. The company that had the little robots that crawled through the plumbing, deliver fiber optics to people's toilets. So the real company there was once made fun of is unfortunately no longer with this. So the effort, the power still lies in the same place as it did 50 years ago. It was a genius idea, these plumbing first. Break this monopoly. Second, the economic forces that gave rise, not just scarcity of spectrum local loop, but the economic forces that gave rise to monopolies like, let's say network effects haven't gone anywhere. People use the AT&T phone network because it was one thing to be able to call everyone in your city or 10 people in your local farms. Another thing to be able to call everyone. The one network promised by AT&T was more valuable because everyone was on it. And what else is Facebook dependent upon the exact same economic calculus? Why does anyone use Facebook other than the fact that everyone else uses it? Yes, sort of. If you were the only person on Facebook, would you use it? Maybe you could ask that question. What for the games? For the user interface, obviously you use the thing because everyone else uses it. Economics of scale and brand, similarly. Continue to favor companies like Google, eBay and other company obviously benefits from the fact that everybody is there. And so that basic economic force of network effects still has its influence and in fact, if anything is stronger. There's more rules of economics that haven't changed but I'll stay there. Nor has human nature changed necessarily and in two directions. Number one, one of the things I forgot to mention this, one of the things that I think leads to the tendency towards monopoly in communications markets, information markets. Is the idea that by rising the top of these industries, you can, it's not, being the head of a media company has an appeal different and more profound than selling ball bearings or rubber boots. It has always attracted a certain kind of person. Person, as Schumpeter said, not necessarily interested in money or luxury but someone interested in founding a private kingdom, improving himself better than his peers. Someone interested in having influence, maybe power. One of the things I did for this book was interview Gerald Levine who used to be the head of Time Warner. And I asked him, I don't know, since leaving AOL Time Warner. He also started HBO by the way, so that had been a lot of things. Since leaving those companies, he now is the director of the Moon Bean Sanctuary which is a Buddhist, sort of somewhat Buddhist place. So when you meet him, it's a very different experience, very calm person, kind of looks in your eyes like this, pauses between his teeth. Told me that being a CEO of a media company, said is form of mental illness. And I said, well, what motivated you in your job? I was interested in this question, the money. So what motivated you? He said, well, this is how I figured out how we were doing. I had an assistant, a staffer, who every day would figure out how many touch points we had achieved. So what do you mean by touch points? He said, well, through our films, through our magazines, through our books, through all of our media properties, our news, CNN, how many minds had we touched today? That's what I wanted to know. Millions, billions, how many people had we touched with our properties? That was what I wanted. I wanted to know how many, did I touch 500 million people today? That was it. And I think that suggests that that's what you're maximizing. It does suggest there is a different kind of interest that leads people to want to run an information empire. And I guess I submit to you that that interest has not changed. If that was appealing to you, in 1930, as a new president of NBC, the ability to reach an audience of then 50 years, I love Lucy, one of the things that got me interested in this book is when I found the astonishing figure that I love Lucy in 1956 would regularly attract over 50 million, sometimes over 70 million viewers. But if you know what, CNN and average episode, well, they've gone down a lot, 400,000. A popular show like Bill O'Reilly, maybe gets a million people. I love Lucy 70 times that. The idea, the temptation of being able to reach 70 million people at once. It's fun enough reaching a whole classroom. You reach 70 million, that's why Bill will come law professors, I guess. It's an incredible idea. And if anything, that temptation has somewhat gotten greater. Finally, and I'll end with this and then take questions. I don't think our interests, inconvenience, reliability, security, high production value have necessarily changed that much. Maybe a little bit. I guess that's the question. Steve Jobs gave a speech. Steve Jobs, who is the most, has the greatest fidelity to the original model of the media mogul. Offer a beautiful product, know for consumers what they want, better than they know themselves, or tell them that's what they want. Weed out the junk, the mess. He is truly the heir of the Hollywood moguls and the designers of NBC and other great modials is Mr. Jobs. And he said it, I think, better than I could. Early this year when he said, this is what we figured out. Americans want Hollywood content. They don't want amateur hour, he said. And I think there's some truth to what he says. And maybe not as a self-fulfilling prophecy, but there is some truth that is to say, perhaps it's not only Hollywood everyone wants, but who here, I ask you, does not put convenience almost at the first of their choices when they're using internet apps, for example. Maybe I'll be able to, does anyone here not use Google? You might ask, why not? At Microsoft they were both slightly different to, except with the black sheep on the book tour, it was an unusual experience. You might ask yourself, why not? I've tried it, sometimes go week or something after the Verizon deal, I got mad for a while, and I tried it, kind of inconvenient, even a little bit. You sort of feel maybe you're missing out on something. That is a, that force, forget about all this stuff, we want this, that force, the demand for convenience, which we just think so important, more important than anything else, that I'd be able to get this as convenient as possible. I'm not saying, I'm not trying to say you should be ashamed of yourself, but I'm trying to say that builds monopoly. That has done it in the past, it will do it again, or we shall see. Thank you very much. We have some time for questions, are you going to? Ah, we have a microphone. So the cycle you describe is very similar to what business scholars and economists call the technology life cycle, where things begin in a very open phase and after a while enter a mature phase where there are patents and there are monopolies or small number firms. And you see this in steel and aviation in the personal computer, what's really different about information industries? So I think, one of the things that motivated me was some of the literature you're talking about. I teach trade kind of as a hobby and that is a large role in trade theories. Countries might go through a cycle where at first there, some countries invent things, other mass producers so forth and there's Deborah Spar's work which has some similarities. What I think, or the reason I have focused on the information industries in particular, not because I'm sure the trend is different, but because I think the stakes are different. That is to say, when you are talking about, let's say, a monopoly in steel, or the patterns of invention in steel that leads to monopolization or other things, I think it's a significant factor, you may have higher prices in the steel industry. But when you're talking about the information industries, something you all have pointed out in this, I think this is something that a lot of people point out, but you're talking about speech, right? You're talking about a product whose output is speech. And so the concerns are different, even if the cycle is similar, the concerns are different because ultimately you're talking about what the final speech environment looks like. You're ultimately talking about something where we have a constitutional concern, or just a concern as a republic, that is different than the concern we have in the other industry. So that's the main reason I think that it may be different. That's number one. Number two, I think some of the economics do work slightly differently. This is something I've pursued that carefully in the book. But if you look at the economics of scale, for instance, in information industries versus other industries, you notice that they, this is something I taught my class today. The difference, the fact that information is a product has this unusual quality, a very low marginal cost of production, tends to accelerate some of the effects of something like economics of scale. And I can explain that in more detail before, but I think the unusual products, some of the unusual features of information as a product also tend to accelerate some of the tendencies that you see. Who's, am I in charge of it? Okay, this gentleman over here in the green. Okay, I was curious where, how you would fit something like Wikipedia into your framework? Because on the one hand, it definitely seems to be almost a monopoly. Nobody's been able to compete with it. It has a huge network effect. It seems to be a default destination for people. And yet instead of having a big media mogul on top of it, it has this diffuse, ever-changing committee. Is there like a historical precedent for that? Where do you put it in your framework? I don't know if it's historical precedent. I could think about it. I haven't thought about whether it's historical precedent, but it reveals an interesting tendency. There's an important distinction between an industry that is monopolized and an industry that is closed. Or a product that is monopolized and a product that is closed. Because it is not necessarily the case. They often go hand in hand, but not always. So for example, if Mozilla grows or is, to take another similar to Wikipedia example, is an example of a, it becomes a monopoly browser. So the browser product is monopolized. Nonetheless, Mozilla is an open project. So it's possible to have such a thing as open monopolies. And then you have to think, well, what do I really care about? This is a really interesting question for people who are interested in the normative side. Do I care about openness or do I care about competition or a divided industry? Which of those is more important to me? Because Mozilla or Wikipedia may in fact in some ways stall innovation because it's the one thing. And may show some of the pernicious effects of monopoly too, but on the other hand it's open. So it's kind of a puzzle for people. It's also like, what do you think about Android? Industry, Google often has a position, we need to monopolize this industry so that we can keep it open. It has a little bit of like, when you take it over so then we can make it good and open for everybody. But first we have to take it over. And you have this sort of dilemma. Well, how do you feel about that? It's sort of the dilemma around Android. Second thing I want to say, and I want to leave time for other questions, is there's sometimes an instinct that may be the answer to some of this. If you do believe that monopolies have some level of inevitability. I'm not fully saying, but there's a lot of factors in many of these industries that will tend to lead to a single, let's not say monopoly, but single dominant player. Well, maybe one of the happier answers is for that to be not owned, or a non-profit, or an open standard, or something like that. I mean, in a sense TCPIP is the one dominant networking protocol. But some engineers don't like that fact, but generally the fact it's a completely open standard is sort of the antidote to abuse. So there's a sense, and something I say in the book is perhaps open standards are the antidote to abuse. But they're a rarity. They're one of the unusual products of our, hey, something that Yochai and other people here have written more about than I have. So actually, let's imagine that you called on me. Okay, I call on Yochai, thanks a lot. It's hard to imagine a lot of professors, I guess you were student ones, people calling on you. Yochai, what's the answer? So, say a little bit more about what you started saying in the end, because you answered, Jim, with, it's different because it's information, and it's important for a variety of reasons. And you answered about Wikipedia that it's different because it's open. And there are other, Hold on now. Yeah, go ahead, go ahead, go ahead. Jim, because it's open, go ahead. No, no, no. Professional risk. There are different ways of interpreting these stories. So the basic question at the end is what is to be done? Are we supposed to shrug and accept and say, yeah, that's life? Or are there modes of resistance? And if so, are they worth it? You can tell a story about AT&T as you tell, or you can tell the story about a failure of antitrust regulation because of a failure of will at a certain point. You can tell a story about radio and consolidation, or you can tell about the patent poll and Hoover as Commerce Secretary, that is to say government helping the monopoly, and both come out in your work. So the big question here is, are there modes of resistance, are they worthwhile, where ought they be directed, and why is it worthwhile having them? Yeah, okay, great question, thank you. And it's sort of the center of the book. So let me back up and say, discuss one of the inspirations for the book. It may seem a little grand, but I'll say it anyways. If you look at the real long span of human history, there have been this tendency for republics to turn to dictatorships. That was just kind of the assumption. Cromwell or Napoleon, republic's not such a good idea. They tend to flip. One of the interesting things about the American Revolution is the sense that you can have a republic, but it's fragile and you need to do all the stuff to try to prevent it becoming a dictatorship, because it is likely. And it's an instance where there's a conscious effort to prevent something that otherwise seems natural or inevitable through the evolution of human institutions. And I believe, I am not a person who says, because we've had all this happen before, it is inevitable that it will happen again. In fact, I do believe it's in our hands, and I agree, of course it's in our hands. How can it not be? Now, maybe require factors, maybe require the overcoming of preferences or habits that are so deep-seated that it's difficult, like I said, that desire for convenience, being so dupe-readed, or the tendency to worship power and size being almost biological. But I nonetheless believe it can be overcome. And what are the modes of, say, resistance that I would talk about? Well, I'm gonna talk about three. Or three ways in which you temper, knowing that you have a tendency towards a cycle, how do you temper its power? Number one, and I write about this at the end of the book, is the idea that you maintain some forms of open channels whereby there is always the possibility of a challenger to incumbency. This is basically the instinct behind the net neutrality movement, or rules. That is to say, the idea of the net neutrality rules is to try to preserve some channels that serve as a constant catalyst or possibility for essentially an insurrection to arise against dominant authority or dominant powers. And so long, at least the theory goes, as you are able to directly reach consumers through an open protocol, you always have some chance of a challenge to power. So that's one set of things. Reserving places where the cycle turns again, where disruptive inventions get their start. Number, the second set of ideas are related to tempering the tendency towards abuse of power. Now one is to look at companies like Google, Microsoft, Facebook that have achieved dominance, monopoly like status, and in ways both governmental and informal demand good behavior. That may sound naive, maybe, but I think that when I look at the 20th century, most of the good that is achieved by these firms comes from pressure to be good. From the sense that the duty not to be evil isn't just sort of a volunteerism, but it's actually something they owe. And that is achieved first of all by public pressure, media pressure, shaming, and some level of government involvement. The third thing I'd suggest is my answer to, I'm not sure your name, but the idea that some of the pernicious effects of dominance or a monopoly can be modified or reduced by having open monopolists, by having open standards in the areas that are the choke points, the pressure points, the areas that give you the master switches. If the master switches owned by everyone, it's not as threatening. And I guess if I said three, but I said I'm gonna talk about the fourth. The fourth I would suggest is an understanding or a willingness if things go too far to break everything up and have it start all over again. That is to say a willingness to use the most aggressive aspects of the antitrust laws to break up companies that have gone too far. Now what I haven't mentioned this, and I think part of this, because I know more of Yohai's writing, is an effort to try to ensure a permanent state of competition, right? And I guess in some way, some of my measures do that, but more directly, something like the open access rules, try to ensure that you have insensitive areas, multiple competitors. I guess, well, maybe I'll leave it for another question, because that will take too long. All right. I have two unrelated questions. First one is simple enough. Didn't Bell Labs take out patent applications on their tape recorder? Second one is, if the internet became a monopoly, would it be possible to make it more hacker proof? First question is, as far to my knowledge, they did not take a patent out on the tape recorder. In fact, the tape recording tape, as I said, came to America almost 10 or 12 years later, German imports of Nazi technology that was discovered later on. So it was in fact buried and not handed. Second question, can it be made more hacker, will it be made, I mean, that is the, this is something Jonathan's a train, who's many of you know, has written about more carefully. One of the promises of a monopolist usually is more security, it's a common promise. Not the only one, reliability, quality, everything else, but one of the common promises of monopolist is we will offer you greater security. And so, a company that promised, if you look at a future based on the iPad or the iPhone as the dominant device, it is possibly more hacker proof. WikiLeaks has been removed from, and so it would be slightly more hacker proof, but at some cost, because hackers sometimes are also a form of free speech. Questions on privacy. Privacy issues in terms of the cultural, the technological information, can you say something more directly about Facebook as a monopoly and privacy in general? There's an interesting, I believe in the course of researching my book, I found the first time that electronic privacy, so to speak, became an issue. And it dates to 1876 and concerns the Western Union monopoly. Western Union at one point, I'll get to the 21st century at one point. Western Union had a monopoly on the telegram market, and one of the things that Western Union in association with partner, Associated Press, would do was try to influence the course of American elections, particularly presidential elections. So use whatever means they could. And eventually, later historians have made it in people kind of coming out eventually, made it clear that one of the ways that the Republicans had an advantage in those days was Democratic telegraph would just be given the Republican Party. It's like all their secrets. Even though they had a promise, your telegram is absolutely secret and is guarded by us by whatever. That in fact, right away, the first telegram, the first, I guess what is it, the first communications monopoly realized right away it had a great power here from invading people's privacy. It had a great potential to steer human events in the way it wanted by spying on things. So privacy is one of these forces, or a violation of privacy that runs throughout the course of the book. What I'll suggest is that in a way that is not always appreciated, maybe it is always appreciated, that deep and extensive privacy protections form our identical to requiring an open network. And let me explain why that is. For if you have extreme, if you have strong protection for privacy, for example, on the internet, you can't do the kind of deep pack inspection you would need to do in order to try and figure out what people want and try to steer them towards things that you want them to have. So there is this direct and sometimes not fully understand link between the degree of privacy people have and the inability to have a full scheme of centralization and control. And maybe that's obvious to privacy people. But I don't think it's always obvious, for example, in Washington policy circles where privacy is seen as one set of concerns associated with crazy people. Not crazy people, but no, that's not true, but associated with privacy advocates and another set of concerns related to open competition, which are sort of antitrust like issues. But there is a link between them that's not fully understood or not fully appreciated. It's a little bit about security, but I'd like to ask you a little bit about national security. So in the book you describe how the AT&T wiretapping in San Francisco happened, partially because the FBI, the national security agency only had to deal with a few telephone companies. And after the breakup of AT&T in the 1980s, the FBI got the Communications Assistance for Law Enforcement passed because it was having trouble dealing with a plethora of companies. But I'd like to know what you think about the impact of national security on this whole monopoly effect. It's one of, I would suggest the factors, I mentioned a number of them, but one of the factors that tends to drive an interest in monopoly, particularly government's interest in monopoly, is the idea that monopolized information structure serves national defense. The first realization of this perhaps in modern media is during the Civil War, where the union has an advantage because of its partnership with Western Union, and actually a lot of the telegraph network is built by the Federal Army, or the Union Army, to support its war efforts. By the 1950s, AT&T, whose slogan was then the system is the solution. Great slogan. By 1950s, AT&T was such an essential part of national defense that the Defense Department prevented in what would have possibly been the breakup of AT&T in 1956. And there was a number of things AT&T did. They ran the early warning system to figure out whether ICBMs were coming. They obviously had the single phone network, which was designed to be able to be used in war. And as suggested, it always makes, then it would have been against communist spies to the gate today against terrorism. It's much easier to spy on people through a centralized network. It's always been true and it always will be true. That a monopoly effect hinders innovation. And certainly for national security, innovation is really critical, especially in communications. I'm not really sure why it should be so critical. I don't think, I mean, you wanna have better defense systems and so forth, but just from my reading of the history, typically the monopoly has served the interests of security and defense interests. And it was one of the things I wanted to say about that, but AT&T's role. Yeah, there's kind of a feedback cycle there. Because AT&T, just to take the most prominent example, became very involved in the Cold War providing infrastructure to help America win the Cold War, let's say. So it becomes more and more important, so it becomes harder and harder to displace. And in fact, by some point, a firm, a private firm can be so essential to national defense, so almost like a branch of government, that displacing it is no longer a sort of economic regulation, but actually separation of powers. You know, if you start to view a company that is intrinsically involved in national defense, it's being basically a part of government. When you're controlling that company, it has more to do with constitutional checks and balances. Has more to do with government controlling itself, in fact, than in an interest in competition. So in some ways, the antitrust department plays a role in checks and balances system against crown corporations. That's sort of a complicated constitutional point, but one I'm fond of, so. I think I have time for one more question. I was wondering if monopolies are inevitable outcomes of kind of American capitalism, might a new form of capitalism maybe be a mode of resistance to this trend? It would be, would require reconfiguring of consumer behavior in a way which most people are now not interested in. It would require people to think about search engines in some way they think about Starbucks. They're like, well, I'll go there, but if there's sort of, you know, some people will purposely choose a less convenient choice or even a less attractive choice because they're interested in supporting a different, and I don't know, it's sort of a small thing. Some people will radically depart from the entire capitalist system itself or the market system itself and only, you know, let's say, grow their own food or something. So you'd have to have people, for example, who write their own search engines and use those or have their own Facebooks or, you know, it would require that kind of idea, which we do see in other markets, right? You definitely see people who will grow their own vegetables or only shop or only do this and not avoid. You see that kind of tendency. We don't have that tendency in the information industry very much. You have some people who, sorry, I should disagree. You have people who are interested and will only use free software. That's right. So that is kind of the, I'm saying more of the communications industry, but in software you have it actually, that's a very good point. It would acquire that kind of thing and maybe it is happening. I mean, there are more and more people who will not, for example, touch anything that's DRM involved in it. There are people who will not, you know, use any basically commercial products who live fully on non-commercial products and I guess that suggests that is what, that is the movement that would stop the cycle. Is there a movement that would stop the cycle would be that becoming powerful enough? The movement against commercial proprietary work is what could stop the turning of the cycle. All right, thanks very much. There's some books for sale. Anyone have a book time?