Great advances in communications technology start new industries, but the history of such breakthroughs shows a cycle of fragmentation, concentration, more breakthroughs and a splintered set of small companies. The web may defy this cycle, whether control of the web consolidates or remain diffuse. Historic patterns suggest that today’s major web companies may become part of larger media empires, centralizing control of online content. Columbia professor Tim Wu offers a rich saga tracing the evolution of telecom industries, technology and regulations and explains what these patterns portend. 


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in communications technology encourage the formation of new companies that outperform old businesses based on outdated technologies.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 founded...

About the Author

Tim Wu is an author, a policy advocate and a professor at Columbia University.

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