Summary of The Master Switch

A Cycle of Revolution, Fragmentation and Consolidation

Revolutions in communications technology encourage the formation of new companies that outperform old businesses based on outdated technologies. The fragmented frenzy of these revolutions fades as dominant companies buy or bankrupt smaller competitors. The diffuse nature of the Internet is the antithesis of centralized control, public or private, but if history is a useful guide, disjointed control of online content may yield to more concentrated power over the Internet. After all, the commercial forces of consolidation and concentration have prevailed in every communications revolution since the invention of the telephone in the late 1800s.

The Birth of the Bell System

The telephone, like subsequent major advances in communications technology, had several contemporaneous inventors. On the same day in 1876, inventors Alexander Graham Bell and Elisha Gray both registered for US patent protection for telephones they developed separately. Professor Bell had scant interest in running a business, but access to capital ultimately set him apart from other inventors. In 1877, he and a group of investors...