Thursday, February 24, 2011

Best Business Book of the Year - The Master Switch By Tim Wu

Good business writing is really a delight.   And when a really talented, visionary writer takes on a business history, the result can be breathtaking.    Tim Wu has done just that, in a masterful, entertaining work that really should win a  best business book of the year.

Wu has taken the history of telephone - AT&T - of radio and RCA and walked us through those times in history when an "open" technology has become closed, and when a monopolist has been able to strangle free speech here in the land of the free.

Wu is a law professor and a specialist in intellectual property.  He is generally acknowledged to have coined the term "net neutrality".   But despite those scary geek credentials, he's written a vibrant work of business history that works in the Kronos myth.   This is an important, literate work and a must-read for anyone who wishes to understand the current Apple vs Google debate - I have never seen it explained so well, nor had I realized how much was at stake.

I laud Wu for not only laying out the history, but also having the guts to put out a solution, something that he calls the Separations Principle.   That is, the people who create the content shouldn't own the means of distribution and vice versa when it comes to the information economy.   I am sure he is right, I just didn't quite understand why he was so dismissive of antitrust law.

It always seemed to me that the way cell phones are sold in the US are illegal tying arrangements where consumers are forced to buy expensive cell phone plans to get a phone.   Stuck in a damned plan, you can't get out without getting charged a fortune and you can't get a good cheap new phone at the most competitive rate.    I remember vaguely that the US Tobacco trust used its cigarette machine patent abusively and ended up monopolizing ownership of tobacco farms - I thought this was all illegal tying, but this type of anticompetitive behavior is a commonplace today.   Owners of devices routinely thwart consumer freedom, free trade, and competition.   As Wu makes clear, Apple is the worst offender, thwarting all possibility of consumer freedom through technological gimmicks.

I am not sure how Wu's "Separation Principle" differs from the classic forbidden tying arrangement I learned in antitrust law, but it seems to me that many of the media conglomerates are misusing machines, patents, and copyrights in exactly that way.    Maybe we need the new theory, or maybe the Department of Justice and the FCC need a wakeup call and a knock on the head.

Wu's book is likely to be extraordinarily influential in telecommunications and information technology regulation in years to come.   But don't buy it for that reason.  Buy it because it is a rip-roaring good read and will help you understand and care about where we are headed next.

 Purchase Copyright Litigation Handbook 2010 by Raymond J. Dowd from West here  

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