writing a senior thesis ony the media reform movement and why is this taking place i with no journalist ever present in any convention ouran conference? i said that as a good question i thought probably a that was not good although i think i know the answer which is for a journalist a particular, i notice of a journalist in the audience they are skewed toward broadcast journalism but certainly for the print journalist wetre imagine we ride across the prairie on our right to horses and there isfr no policy context that matters except freedom of the press but, i

think, actually the better metaphor would be we areer s playing on a basketball court or football field from an end of the way our game unfolds to pence on the sheet -- shape of the field and where the media ande communications policy comes in. it is my hope that that with that generates the interest in these areas and in so doing we would express the journalistic interest in these issues which i hope to get too tonight. . . journalism, so the test is how much we can bring to the

surface. it's one of the pleasures of being a columbia university is you get to be colleagues with the people who are essentially creating the discourse on the subject, rather than just sort of discussing the work of the people creating discourse. so here we have two brooks, books published this year. let me switch them. network nation by richard john of our faculty and master switch by tim wu of columbia law school factory. they run kind of somewhat related subjects, so another ways they're quite different books. and we're hoping that will get the two authors to disagree somewhat to make the evening more entertaining. i would say though, they agree about a few things.

we'll try this out on umc if you agree about these things. they agree that neither is a technological determinant. that is in the general conversation about the internet in particular and telecommunications in general is a sense of, this telephone was invented in everything just natural frozen not. proof i'm a big internet is invented everything closer now. both authors in different ways would argue quite forcefully that the only part the story and it's also when a new mode of communication comes along, there starts to be a battle royal involving government policy. on the one hand business interests. on the other hand sites over to use my earlier metaphor, the shape of the playing field.

so they both draw forceful attention to that and say it's really not useful to think of the technology at elf in a vacuum if that's fair. and i'll leave the rest to later. i want to begin by just asking each of them to give a very brief, the kind of thing you use on the tour, short description of the book in this main subject and spine of the argument. i'll take them in chronological order. that is richard spoke with published first by a few months and it's that mostly about 100 years earlier. [laughter] so i should also say, one of the themes the books have in common is they share a passionate belief that someone from a very few people in the audience have ever heard of theodore vail.

the type name of bell, was one of the most important people in american history. so you get maybe 10. richard, why don't you start and then we'll go to 10. >> thank you very much. the book i wrote as an attempt to read the history of electrical communication going forward. that is too safe to tell the story beginning in the early republic for we had electrical communication, ending the story with the consolidation of the bell system, which for much of the 20th century, as tim and i agree was the centerpiece of american information structure. so i try to tell this way forward rather than backward. to tell the story, what i try to do is to show how the strategy of the leading players who were business leaders, almost without exception, their strategy was shape by the rules of the game with a political economy in which they operated. so structure shaped strategy.

in the case of the telegraph, samuel morris emerged in a political economy in which the rules of the game favored government ownership. post office is a government monopoly, most of the telegraph should be, too. it didn't work out that way. it turns out a number of the players including powerful new york editors were frightened at the prospect of the telegraph destroying the metropolitan press. they used state legislation. they also used their own collective power to establish a new regulatory regime, which i call anti-monopoly. an anti-monopoly to regulatory regime was to promote competition among telegraph companies, among network carriers. the competition persisted for a couple decades until lo and behold the greatest anti-monopolist of the mall, jay gould, got control of the telegraph network in 1881. he was also the most hated

finance their the age. it's hard to think of anyone today who is most hated unschooled. the telegraph story that anti-monopoly, rules of the game, political economy leading to what was effectively a duopoly. there were two companies. the business strategy does pursued was business oriented and it was very narrow. and may come as a surprise that western union, which was the main network never aspired to provide access to or mac americans to send information of her longest this. if you want to communicate with someone in california, boston, sent a letter. i was the company policy. in the case of the telephones gory extremely different. this is an amount of technology. it's a matter of the rules of the game. telephone business was never unregulated or lightly regulated for the telegraph was. he needed to getting municipal

franchise. to getting municipal franchise committee were thrown into the municipal politics. coming, new york and chicago got pretty down and dirty. in order to escape the clutches of the extortionate alderman, a second-generation of telephone managers decided they were going to try to popularize the medium, which was very bold because it turns out there were a lot of reasons not to expand the telephone network. there was no network externalities of the kindly to be associate with the internet or very, very few. the second did this in new york, chicago come in many other cities. the telephone became a social medium around 1900 with the presumption that ordinary people should have asset and a remarkable achievement that was the achievement. the story changes once again in the 19, following the collapse of the rivals to this group of

telephone operating companies which we call the bell operating companies, the dominant group. they had control over patents and resources and so on. they were rivals called quote unquote independence and they collapsed in 1907, certainly by 1910. in this leads to a change in the political economy we have the new york state legislature in 1910, also the congress declaring telephone common carrier. and this is where bill becomes important. did little to do with popularization of the telephone. >> tell us who that was. there is a tease on my part. >> veil was the telephone interview caught in the business very early. he was a plunger, a speculator, he like to invest in all sorts, take flyers and all sorts of new technological kind of whiz kid ideas. and he was lured away from a very good job in the railway

mail service where he developed his theory confucius vision of a network expansion. his ideas are rooted in the government in the 1870s, post office being the largest organization in the country, one of the largest in the world cared who was lured away to take a player in the telephone. it so happens consortium he ended up with a control of the patents in 1879. there is a struggle involving jay gould and it was at that time attacking western union, which was before jaeckel got control of the telegraph. he then becomes for a couple of years manager in new york city we have to put the wires underground in very briefly the president of a speculative adventure, american telephone and telegraph, which was a long-distance network provider. it was a very small part of the network and at last money until the 1920s it was not that important. he was president of that and more important president of

metropolitan. he almost went bankrupt, came back in 1907 am a consortium of first-generation telephone managers from a new banking group in new york, which jpmorgan was important. he came in and what he tried to do was to bring to fruition his lifelong dream, which was to bring together the telephone and telegraph, which if he had the word he would've called telecommunications. he thought his dream filled 1909 benin but i western union and for a couple of years that looked like the telephone company, at&t was going to provide universal service, which meant a number of things, including linkage of low-cost short distance telephone with low-cost long-distance telegraph. in other words it was bill who helped him popularize the telephone. this ran afoul of the justice department and in 1913, the attorney general, mcreynolds

brokers a settlement, forces failed to give up western union. it was very important in helping to create a public face. he hopes on corporate public relations. he hopes associate bell and technological information with long-distance commotions a publication to, not that important commercially, but very important in the realm of regulations. he doesn't control telegraph. during the first world what he tries to get control of cable, doesn't control cable, and can control radio. and sometimes a tragic figure. the bell system he helped to establish and help to really put on a footing with the stockholders are neutralized, no longer a problem for people like jay gould, with users are relatively happy and most important of all, with the independents are saved. because of the independents had continued to fail and cause

problems in the state legislatures as they had between 1907 and 1913, and make destabilize telephone business. so everybody ended up, democrats got recognition and that was bill's doing, too. >> you mentioned you were never supposed to ask and historian, what is the lesson from this that would be interesting to help us understand the fight going on over the internet today. >> veil broad vision which she articulated and tim and i both write about this in some detail. we have different explanation for why came about, but this was a response to federal legislation. congress decreed that the telephone and the telegraph would be common carriers, which is a term of art. the new york state legislature declared that also 1910. the broad vision for the telephone was in response to the piece of legislation, which made a clear there was not going to be competition in telephone

businesses. on one of competition in the telephone business after 197 were certainly after 1910, but it was going to be a stable footing and investors are going to be neutralized. that is to say there's going to be no financial jungle in the telephone business in that established a telephone network on a sound footing that made it possible for the u.s. telephone network to be by far the finest network in the 20th century and how to create a solid, steady stream of revenue that in bell labs, established in 1925 would be directly responsible for some of the most important innovations, including the transistor, which is worse is the key innovation in electronic games. for the analogy for journalism to take away for today was that the money that paid possible bell labs came from ordinary telephone users, in big cities. they didn't have any interest in supporting bell lab, but they got reasonably good telephone service, local because that's all they wanted for the most

part and not been able to bell labs and bell labs then asked as a de facto national laboratory, cross subsidies were so important and it was only possible because of the extremely complicated regulatory regime in which it operated. no different regulatory regime and telegraph antimonopoly, not subsidies. you do not agree public nsa. >> does a perfect cuba through 210 who i think we'll vigorously disagree with some of that. maybe not all. i just want to get to the local news angle. i just want to point out that the title of the book is a quote from fred friendly from his days at the columbia j. school professor. and fred's widow, ruth come is here tonight. so, welcome. and tim, over to you. >> sure, thanks. first of all, thanks for

welcoming brazil's letter to the world of writing and journalism. and back in the 1990s i worked in silicon valley in the.com industry and there is one thing that were absolutely certain about, absolutely certain beyond any other question that we were living at times without precedent. anyone could start a website. fortunes are being made overnight. the internet was radical, was different. there was nothing like it before in human history and nothing like it ever again. i think i'm in academia, and started wondering about whether that was true. a hundred years ago, graduates of columbia university as opposed to being interested in a start up for a company which is

a popular career choice today might've thought about starting a telephone company. in the 1920s, you might asserted taking about starting a radio station. it turns out that all of this media were at one point open, competitive entrepreneurial industries. it turns out that we live the internet revolution that moment, that kind of environment where things are open, competitive, entrepreneurial. everything seems to be different. i was interested when i wrote this book, so i wanted to see what happened to the other darling, exciting new media of the 20th century. i wanted to see whether they seen what had happened to the enthusiasm in utopia of early radio, the excitement and competition surrounding farmers who are setting up their own phone networks in the last what had happened to areas.

and what my book is about is about the faith of essentially these moments of openness that i fixed just as a long psycho. it is between a more open entrepreneurial phase and a more closed, educated monopolistic phase, dominated either by one company at&t be the best example and abc being other in their time. a third great example dominated by a cartel, hollywood being the greatest example in the competitive industry run by a cartel. i wanted to know and finally, ask in our times is the internet destined for the same future? in other words, the openness amount for gorilla took for granted in silicon valley who we

assumed was forever now that we've had the revolution, whether it to his destined for the same fate of every other new media and whether we have a choice or not, whether we can change and maintain a more open if that medium is about a lot, if we like things the way we are. so, this is a lot to talk about here. i want to i guess cut to the chase. by the way come in 15 minutes am going to start taking questions in the audience, which must be given from this mike, so speed again. again, i'm sort of cantinas developed towards journalism although not completely. you both agree that when this process they are talking about, tim, happens, the bad news by public interest standpoint is

much less diversity of ideas to call it opinion or speech or content because there is a sort of small group of players, but the upside is some higher level of quality may be of service and of content. there's a very brief section in your book where you make reference to the golden age of television of a labs and that we tend to be nostalgic for the oligopolies and monopolies because they can use a stable position were due sometimes to create public goods that are very, very expensive and can't be created in an open distributed system. so for us in the news business,

the big question is if you move the master switch to openness, do you lose the ability for anybody to produce high-quality content? so i'm curious for thoughts on that. >> i'll start by avoiding the question for a minute and it is a hard question, but even though i've agree to take this open in truth if you read the book, it reveals that a kind of profound ambiguity was monopoly. i worship at lake in light of the due and openly for men might fail would say this is the best, the biggest, the greatest. there are these golden ages of the benefits and journalism is one of them. journalism has a lot to do with industrial structure that can support the kind of quality journalism that the world never saw before the 20th century.

the truth is i feel profoundly ambiguous, but to me the drawbacks over way the advantages the long-term. the problem with monopoly over the long-term install starts promising and results in the golden age over the long-term, entrenchment leads to paranoia, stagnancy and abuse over the long term. you know, cbs and nbc when they started up a lot to say for them by the 1970s, things had gone too far. i guess i suggest may book a more modified position is that it is important to have the sort of structures that can support quality things, but not at the cost of entrenching a monopolist for so long that they just lose any site of what they have to

do. i think that's what happened with many media organizations in this country by around the 60s and 70s. >> to follow-up questions. what is prescriptive than what is destructive. i'll do the descriptive first. you do a wonderful job in the book of describing this tragic president were a new communications medium comes along, all things are possible. there were these wonderful dreams of how fabulous it going to be. the title comes from the now long forgotten. when there were such cable television. remember those ays? and then inevitably the bad guys take over and get their hands on a master switch. how cannot not happen again if it happens every time? >> what journalists need to understand is the importance of creative destruction in the journalism industry. we have to have a dynamic industry. we want to see companies die and be destroyed.

journalists are afraid of death. >> that's so unfair. >> journalists and media people have a very poor -- look at these brands. that's unheard of in other industries that they have any sort of turmoil for natural market profit to have brains the last for hundreds of years. journalists are what is needed and journalism is the dynamism and it's not comfortable the people he upset and want run it's good for you. you make your switching from destructive to pre-scripted. the switchback to descriptive for a minute. based on the reading of this book is 10 your training because, you know, any communications medium as powerful as the internet just

cannot -- you know, liberal or former public advocate cannot never build a big enough sense around it to keep the process that's always happened in the past from happening again. so just as a practical matter, how do you think we can prevent this practice you've convinced us is cyclical from happening in this instance. >> the answer is related to some of my other work on things like net neutrality, which is to say there always needs to be channels, whether it's the internet or other channels for the new can challenge the old, or "the new york times" gets a run for its money, or nbc is certainly facing off against youtube videos. there has to be these channels. in august on the offensive and for the problem with the kind of worship in managerial capitalism in your book is that it's too

insensitive to the fact that managers of capitalism tends to make market entry very difficult just to put it that way. >> the problem with your argument, tim, is that there is no getting around the inevitability of the cycle. if i read your book, i would come away very depressed because every single case you tell is one in which you have these bold innovators had stomped down upon by these very get their money art reactionary plutocrats and then something happens and this wonderful idea if born in someone's garage or someone's attic and it starts up again. there were major public policy triumphs. bell loses big time. they don't get to control the telegraph this was the telephone, the kind of separation that you read about,

so magically, persuasively in moving the inner final section. the radioactive 1927 keeps at&t out of the content business. content conduits are divided they are. if you would not have the studio in hollywood, would you have a coming together of the people making the movies in the ownership of theaters. the united states might never have established a dominant position in the world film business. in the 1930s and 40s -- we have 80% of the world's market. the europeans couldn't get their act together. we did and that made it possible to create creativity that led to the self sustained development of hollywood. >> if you didn't have a hollywood studio system coming also wouldn't have the example of private censorship in american history. >> that's a ridiculous claim, 10. [laughter] >> private censorship.

>> tell me your thoughts and i'll tell you why you're wrong. >> industry is a vertically integrated studio, maybe six. every catholic church was finally able to enforce production code. it set up a system, which are familiar with and people in the audience i which one man, joseph green, how to locate every single film before it's made which is an first amendment terms prior restraint and would be so illegal if it was the government system. .. bad things are coming. joseph screen who described his job as shoving ethics down the throat of the jews, that is as i described i'm here to shove at fixed on the throats of the

jews, the movie was never made. i don't know when it was prepared or anything but this is a form of censorship that should be intolerable in the journalism school but except one man that decides what the film is. >> this is the problem with the whole book. the zeroth individuals to the right out of nowhere, the market medium. look, the reason that he did what he did is because sevenve states were poised to enact code of their own and those states could agree to the patchwork ofo the restrictions on movies and who knows the consequences woule have been. the studios worked because itthe was an alternative to governmend censorship at the state levelert persisted up until the time that was relevant. >> let me jump in on another point, back to my question to you, tim. back to the issue about the trade-off between openness, avoiding the scenario and not having a sort of protective mechanism to produce certain

kinds of content that requires a lot of economic regulatory, whatever, production, institutional protection. i mean an example that comes to mind although i don't thinks will be that persuasive to you is your own field of legal scholarship, which you know, if it sits inside this huge structure of exams and legal licensing and tenure and tuition tuition -- but if you felt legal scholarship were precious and if you deal oligopolies the legal legal profession arguably there would be no legal profession because there just wouldn't be the means to produce it. is that a price worth paying or is there some sort of back to it it -- for doorway up getting we are interested in journalism, they are reporting and all that and a world that really

privileges diversity of opinion and diversity of power? >> so the question is whether we should always accept artificial barriers in the market or, in order to preserve things that we admire? i would say so but i say we overdo it a lot. the legal profession is a great example. it is not as bad as in other countries in the legal profession but a lot of people could do legal work who were not lawyers. it is something you don't need legal training to do. >> you are not saying this sort of two clicks to the the left a few positions that the crop will provide anything that has real value, right? >> if you wanted me to say that you would have to find somebody. you can find clay shirky or other people. i think there are differences in what it has produced.

>> let me ask you. >> i guess my problem with the journalistic way of thinking about things is any industry once it has its tariff essentially, it's protection, begins to treasure it and begins to give it an importance which really it is a very trade. so the legal profession is great. it really is -- so that is the danger and journalism is always enslaving itself against change continually and then calling it something nice like the newsroom, you know. [laughter] and give great speeches about it. i love steve kohl but he will always give a speech about how great the newsroom is in everything. >> but tim there are organizational capabilities that are built up over a period of time in organizations large and small that, if they are dissipated, are hard to put back together again.

it is possible for a country for example to lose its edge and x, y or z technologies. it goes overseas, you are not going to get it back. the miracle of the marketplace is not going to solve all your problems and the story at tell about telephone is not about jail. does the guys at the middle level the unsung heroes who you don't write about who made the key changes but those organizations were pretty large too and that is what worries me about the current internet because the advertising revenue in newspapers as we know, print media which is generated the vast majority of the news stories that we rely on to keep government and business accountable, that that is leno has largely vanished and what are we going to do about it as a nation? and if we do not recognize that organizations can do things that individuals sitting in their attics or garages can't and have not done, if we don't realize that and it seems to me that we are not being realistic about the possibilities as well as the

limitations of organization as a way of shaping content. >> i haven't denied it and i have said before i have a profoundly ambiguous relationship with large organizations. >> you are much higher on the failed and i am. >> it looks like theodore roosevelt says crazy things. >> a megalomaniac. that is attractive in its way. [laughter] >> it makes it something interesting to write about. i will not deny that there are, that there are certain efficiencies gained by large institutions but the problem i see it as a dynamic or in some ways secular process. that is to say let's say google right now is and it's kind of golden age and full of smart people. they have a swimming pools and volleyball courts. is in this moment where they are

like it is really special. undoubtedly within five or 10 years they will turn their interest and innovations into an interest in the same power. they are trying to make sure this doesn't happen but every organization begins to decay them become rotten so i will agree with you there advantages to these gigantic institutions but we haven't figured a way to get rid of them when they start to rot. we need essentially term limits bar monopolies. into stand and politics no matter who the president is after year he is going to be crazy. he is going to -- if you let them go for every is going to try to set up his own -- become the king. my belief is not monopolies are terrible. does they stay around long. at&t was in power for 70 years and by the 50s at already lost it in my opinion. we can disagree about that. >> let me switch because i want to get to audience questions and i want to ask one question a little bit off point but it is somewhat interesting and relevant, probably the most

nakedly journalistic part of both of your books is the discussion of the relationship between western union and the "associated press." so i wonder if one or both of you could fill us in on that. 's bea. just the whole story? >> yeah, in brief. because i will tell you why i think it is relevant today. >> i think the western union "associated press" example is quite complicated in your book is actually much deeper on it then minus. mind pulls up the lurid details essentially. >> which there are plenty. >> that is the danger of understand -- unrestrained monopoly power. >> western union was essentially the monopoly provider of telegraph carriage and they had a relationship with the then new associated dress and they were sort of the exclusive carrier for the associated press.

the "associated press" with the exclusive content provider to western union. >> and there was a quid pro quo here in the 1860s. western union managers were terrified as we now know because i worked in a letter books, the internal corporate archives which just opened up in the late 1990s. they were terrified of either being taken over by the government which was very plausible or being in effect subject to hostile legislation and they recognize that if the press began to editorialize calling for regulation and ownership they would be in trouble. so they cut a deal. we will give you low rates and you won't say nasty things about us and that help for about 20 years. it seems to me google is in a position to strike the same deal. >> net neutrality by the way -- the problem with the special deal, to repeat this the telegram in the 1860s was the only method of instant

communications so anyone who had control of the news service had the media advantage because the news would arrive instantly and that is a tremendous power which would have been fine if it were used sort of for good and they be sometimes it was but they also had to have it for an election. 's been the other detail that is an obvious here is before 1940 by the press association, the news brokers did not have to give the news equally to everyone, so the new york "associated press" cut deals with certain newspapers and not with others and needless to say the newspapers they didn't cut deals with began to lobby against them. >> so just the last thing before we go to questions, just to show you why all this matters one could argue on richard side, i don't know if you would, that these kind of incredibly unfair relationships helped establish the "associated press" which is still one of the great news organizations in the world. on the other hand, all other

news organizations cried foul about the special deals the "associated press" head. why does this matter today? this has been happening and will continue to happen. the chair of the fcc, and other former student of fred friendly, julius genachowski is going to announce the net neutrality issue tomorrow supposedly. it will be instantly opposed by the industry. the scenario would be something like you know people who carry the wires into your house that gives you access to the internet might strike deals with preferred journalistic and other providers that say with this deal you can get faster, better instantaneous service and we can help support these news organizations that there is a downside. so, just to note, this is not irrelevant history. it is really queued up right now.

>> the strongest example is the danger of total deregulated monopoly of information. not only does it you know mean that you don't have diversity. it means you have the influence on the poetical system, that there is a very powerful ability to try and move -- it is affecting democracy. >> i see it very differently. i think he can make a good case that at&t and apple are innovators, that they are doing exactly what your cycle would predict. they are creating all kinds of new content and that made bring with it benefits and why should netflix be able to send, use 20% of the internet to send movies? i think you could make an argument and i'm not taking a policy stance here but reading your book you could contend that in fact you should be arguing against net neutrality. you should be arguing for apple and against google. [inaudible] [laughter] >> let's get to audience questions and i hate to make you

all step to the microphone but this is on c-span in everything. so, who wants to start the process? >> you mention in the early part of the 20th century, they had to separate the industries in order for them to flourish so do you see the same kind of separation which advocates the internet industry? >> i think it is important to recognize that in the united states we have a long-standing tradition going back to the founders of limiting concentrated power. newspapers were prevented in the 1790s on a nun preferential basis which is enormously important for the structure of the press. the telegraph was not taken over by the post office. the telephone was not taken over by the telegraph and so one. this is different from the pattern of european countries and this didn't happen because they were clever guys coming up with great ideas. this happened because the public policy and monopoly of public

policy. i think your suggestion about a distinction between content that should be constitutionalize is i think a very provocative one worth considering. i would contend there is a much longer historical grounding than even you provide in your book. >> is a good point. >> let me just ask you you for those of you who have read the book for the separation -- just tell us what it is. >> alright, so from studying the history of these areas it occurred to me the worst problem always came when in the headache unity of ownership over moving information and creating information. when people on the pike essentially became the same, people who created content because there is always inherent conflict of interest in those situations. the western union come associated dress example is probably the strongest. >> the example you give in your book is this was the dream

behind the time aol merger. if you live in new york city, time brought the wiring to your house. i think it only get to the internet through aol and then you could only get to time content so it was a sort of dream of a closed system that got blown apart by the internet protocol. >> that is right and that is something we read about. and i agree with what you said. traditionally the separation was industry by industry principle. in the country once the telephone and another set of companies runs radio and another set of companies rents film. there was this policing, but the structure of today's, what we need to do is reinvent that principle for today's technologies and the industry vertically doesn't make any sense. my slippers that principle is a horizontal cut if that makes sense. >> the company separated from the carriage company and so one.

sir. >> and talking about some of these new media that came along he gave us these great golden age let freedom ring kinds of things and before that core progress he took over and sort of killed, a lot of these businesses were very capital intensive. there were economies of scale that would encourage bigness and squeeze out the little operator and i'm just wondering if the internet finally has taken this to another level where the barriers to entry are very low. is anybody in here logging in this event life as we are here? in places like this all over the country tonight there were people blogging describing the stuff and what they are doing. and maybe this time the core progress he want be able to take over and hijack this thing and people will be able to use the internet and by the way all these other costs you could have a radio station with a web site and you can make movies with cheap cameras that look really good you know, maybe find that

the cartels won't run things. >> a fabulous question and in some ways that is the big question at the center of this book. the history destiny or can in some ways things be different? my point would be not assume things are going to be different because some things have changed and some things haven't. some of the things that have changed are the internet itself is fundamentally designed differently than they old communications networks. the protocols are opened and they are not owned by anybody. investment is different. investment structures of different. talent is the monopolist can get funding from the venture capitalist industry and as you write about often credit was used to starve -- and i don't think we also socially have the same worship of size. i think in certain periods of american history bigger and progress were the same ideas.

maybe you will disagree with that. there are-somethings that have definitely changed and i'm sensitive to this but there are certain things that haven't change. economics, the basic principles of economies of scale, natural monopoly, have not clearly changed and most importantly human nature. we have not changed. we are the same. consumers still love convenience almost over anything. who here does not use google? people from microsoft put up their hands by the way. we still love convenience. we still love the sort of benefits of the ease of a single company providing something. we still love that and there are still people who want to run empires as well as an interest in consolidating industries and that has been not change. >> but there are differences between what is going on today and we agree about this and lebanon 100 years ago. bell had a public-service

mandate which was mandated lake estates and the federal government and google today has a mandate of do no evil, which basically is backed by the three guys who own google and it seems to me that is a real problem. because we are not in the let a thousand flowers bloom mode. we are in a mode in which very large entities are moving to carve up the information infrastructure and they are doing it for the fast and they are doing it in a world in which we have powerful voices that say that market reigns and the little guy is blogging, the little gal is blocking. i just think that is fantasy. >> next question. >> i will try to meld both threads of this. the telecommunications giant at&t as you said provide research and such under a regime of regulated monopoly, regulated

rate of return. they broke up ma bell, right? it has no reconsolidation so basically at&t and verizon constitute most of -- so now we have the worst of both worlds, sort of a deregulated monopoly essentially but they don't compete except in wireless. to bring you to this journalism point of view i would say the story is vastly undercovered, that this sort of consolidation between the public infrastructure being held hostage by people who now, verizon and at&t both claim to want deregulation, the regulation is an evil, but they were built -- behead these inherent advantages as to whether cable. my question is, do you see that is coincidental that it is an undercovered story by journalist? >> no i don't see it as coincidental at all.

or that net neutrality gets such good press because those two interests answers are lined. >> that is the government trying to tell people to be better. net neutrality as common carriers which is the public pressure you were talking about. >> with common carriage peregrine to be winners and losers. >> that is what you are asking for. >> what i'm asking or is the recognition that telecom and other big players including google have an obligation to serve the public rather than their shareholders for themselves or their own vision. that is what i'm asking. >> the other question, we are getting toward the end we want to move onto the next question. >> this is a two-part question. one in terms of the overarching arguments of the respected text how did you compensate for or how do you see the switch between say a telephone or telegraph wherein one person is sending to one of the person and then they sort of at least much ballyhooed aspect of one person

committee caving to many and being a content provider as a quote previous user on the internet and then two, what i see potentially as a feedback loop is there is a tiered internet of people who are i suppose most privileged in society not only having recourse to traditional educational financial benefits but also to higher tiers, bandwidth, access to further information and how that loop then intersects with potentialities. so that you know if you are a person of means, you not only have educational and financial advantages, you would in a tiered internet also have access to greater bandwidth and then in turn more information and more access to potential audience as a user/content producer. >> let me talk about the first. one of the problems of the internet is that it is a medium where anyone is the publisher,

but one thing i would suggest is completely unheard of before, early radio has some of those features as well. early film in some ways, when there was a lot of producers, still so was as easy as was with blogging, but we have seen some of that before and the question -- i think one interesting thing is whether we will look back in his period 10 years from now and say remember that sort of plan user-generated content was within and remix culture? there is as fundamental question as to whether that is just kind of a sad and something we do right now or whether that is a fundamental shift. i don't know the answer. steve jobs thinks not. steve jobs says one thing we know about americans they don't want amateur hour. they want hollywood content. there a lot of the bob lieber and that we think things have changed forever again, want to make things the way they were. >> let me give two observations about that. one is the conclusion from a

telephone research was that a lot of americans were willing to pay for low-quality telephone if it was cheaper and i think that is relevant to the current debate over net to travel you. not everybody, and in fact folks were insisting on same quality service for everyone. those are the big business users and they were using power to the people as an argument in order to in effect protect their turf. and i think that is worth keeping in mind. second, this idea that decentralized media is prima facie democratic early radio and you say this in your book, it lost a lot of its potential. well if we hadn't had edward r. murrow in the second world war here and now if we have a lot of little radio stations, no one with the resources in london could be broadcasting about the nazi's. we would maybe perhaps be in a different place today and i think that is a real problem with this debate over small is

beautiful. the reason you have journalistic professionals and the reason you have training and there is a reason that you have a limitation on access for the point of view of an ordinary human being. not everybody is sitting there surfing the net 10 hours a day and we now know we have survey data of college students. they are doing about that -- less on the internet and the bloggers tend to come from a rather well-off part of the social. >> let me say since we can only go a few more minutes icy three questioners, right? you are the last three questions so we will do your three questions and call it a night. >> thank you. perhaps i can ask questions -- because i don't think actually that is antagonistic. >> that is no fun. >> we both think the telephone is really important. >> one of the things that developed in asia, it would be

strange because there would be two people talking about mainly american business innovations and cycles but perhaps the question i would like to impose is this amazing ability of the american economy at least in the 20th century to produce these successive waves of media content, software and hardware, whatever you want to use, is perhaps related to the cycle of open and close. if i close we mean a time when some folks could make some real money, and that motive of the prior or current cycle is designed to make the next facebook or the next facebook or whatever it is. >> right, i got it. >> tim, you go first. >> basically you restated the

idea of -- to lure of monopoly profit is what is the real driving force of american capitalism or any capitalism system. not just this idea of people competing. it is really just going for it. maybe this is something unusual but america. i am canadian so you can't meet meet -- accuse me of being that parochial. it dominates and it is fascinating and is a mystery as to why. >> i don't think it is as big a mystery as you do. it has a lot to do with the political order. has a lot to do with the economy. we have a lot of strong indications for -- that is why bill got into the telephone business or the future brother-in-law thought he could make a killing and that was the same story with radio. why radio in in the united states rather than britain in the first were poor in haiti said we are going to buy up all the british patent. we are going to establish dominance in radio because we don't have dominance in cable.

the political economy has been unusually favorable to entrepreneurship because you have strong intellectual property rights and you have got an antimonopoly tradition or separation tradition that tries to promote competition and those two things working together is real and and and shove innovations and jump butter was writing about industries, electrical, where patent rights were absolutely essential. seems to me that is what holds us together. they did not recognize the extent to which distinctive political economy of the united states was responsible for its extraordinary of innovation. >> thank you. my question is regarding the inevitable nature of monopolies to move towards corruption once therefore hold on technology and society, the way society run starts to falter. so specifically regarding that, at what stage do you think facebook and google in these

internet monopolies are commenting on your recent "wall street journal" article, and how do you think their motivation to stay on top in the future will affect there their artillery's overseas? >> that is a great question. you can ask the european union about google. we were talking about this exact question. google says, google's idea is that they have designed their company to try to avoid internal corruption. that is what they said and we read their company so i'm surprised they were saying that. they said we are extremely aware of this danger and we are, we put in measures to try to prevent ourselves from becoming corrupted. >> three guys are what? 30 or 40%. >> i'm just saying this is what they feel. this is what they think. they believe that this would be

their downfall, so they are trying. what do i think? i think we are in a kind of a golden age. there is a lot of amazing stuff going on right now. watch very carefully a certain ratio of innovation versus soap reservation measures. you can look at any industry and see what ratio between the two you see. journalism, for a long time journalism was was no invasion but it has shifted a little bit. the content industry, hollywood, 80% of the record is to try to defend their business model and 20% is to improve it. you watch that racial and it starts to shift and it starts to get abusive when they start to exclude or destroy their rival. that is the moment where i think the law of -- that is the moment antitrust --. >> the last question. >> before you made the comment

or insinuated that people in the reporting world nowadays look down on things because of the situation in terms of newspapers in and the media business etc., and i was curious, couldn't you say that we may be now in a trough that things are going to co-opt? and we had them before. in other words you had newspapers. they worried about television, and movies causing problems, but then television created more jobs for journalists. couldn't we have the same thing happen now? .. newspaper so that in the long term there would be more jobs for people in the journalism world rather than less