Whether in a meeting or at a panel presentation, you’ve surely heard it said around the London Book Fair, or really any publishing event in recent years: technology is bringing about “unprecedented change.” Well, not exactly. In his forthcoming book, From Gutenberg to Google: The History of Our Future (Brookings Institution), former FCC chairman Tom Wheeler explores the challenges presented by today's new networks, and how such challenges echo through history.
PW recently caught up with Wheeler to discuss network revolutions past, present, and future, and why today's digital networks are "new in new ways."
In From Gutenberg to Google you very effectively capture the ways technology and innovation have affected, connected, and disrupted the world over some 500 years of history, right up to the present day. Certainly, you could have written an entire book on just the last couple decades alone, but what were the historical through lines you wanted to make sure we recognized in today’s networked world?
There are two main through lines I wanted to explore. The first is that our “new” technology is derivative of earlier technologies. We often have this image of a lone genius and a eureka moment when it comes to innovation, when Darwinian evolution is probably a better metaphor.
And the second is that those earlier technologies each resulted in upheaval, uncertainty, and unrest. The effect of new networks is always the destruction of the status quo. From Gutenberg to Google was an exercise to scratch an itch. I’m fortunate to have spent my professional life involved with new technology, especially new networks. And what I wanted to bring forward is that while the challenges of our times may be trying, they aren’t unique. We often describe our times in terms like “there’s never been anything like this before.” But it simply isn’t true.
In the book you write that it is never the primary network technology that is transformational, but the secondary effects made possible by that technology. Can you explain that?
Technology is just an enabler—it is how that technology is used that drives transformational change. For example, the printing press mechanized what monks had been doing in scriptoriums, but its transformational effect was to remove those monks and their superiors from determining what information would be made available. Once liberated by new technology, knowledge and information flowed more freely, and with that came the significant upheavals of the Reformation, the Renaissance, and the scientific method.
The same is true of the railroad, the first high-speed network, and the telegraph, the first electronic network. Those technologies meant the death of distance and time as controlling factors in the human experience. Eliminating those constraints enabled the industrial revolution. The railroad inexpensively transported natural resources to central sites for mass production, and then reshipped the completed products back to an interconnected market. The telegraph coordinated movements on the railroad, managed production activities, and also created the national media and the financial markets. So while the networks are essential, social and economic transformation is actually driven by how networks are put to work.
On that score, you observe that today’s new digital networks are triggering economic and social change that is “new in new ways.” How so?
Historically, networks delivered people and products to a common point where they connected with other pathways. The railroad, telegraph, and telephone all followed the same model—whether boxcars or phone calls, the asset was hauled to a central point where it was switched to a line leading to its final destination. Chicago became the Second City, for example, because of the meat packers and millers who congregated there to process the product from the plains to be transferred to lines heading to eastern markets.
But today’s digital networks reverse that topology. Digital network activity is no longer centralized but is pushed outward to distributed routers at the network edge. With smartphones, for instance, the individual becomes the ultimate network hub at the ultimate edge of the network. Yet this functional distribution has resulted in a re-centralization, in the form of algorithmic platforms pairing people and information. And the new network’s low cost of collecting and distributing data has allowed a handful of companies to re-centralize economic activity. It used to be that the centralized nature of networks drove economic activity. Today, companies like Google and Facebook use the distributed network to establish a new kind of centralization, via algorithm.
In your various roles, including most recently as FCC chairman during the Obama administration, you were instrumental in trying to balance technological change and public policy, no easy feat given the complexity of technology, and the speed with which it now comes. Can you talk about that challenge? Because it seems to me that policymakers will never be able to understand our rapidly changing technology enough to effectively regulate it.
It should not surprise us that governments struggle to deal with rapidly changing technology. The people’s representatives in government are indeed representative—they are no different from the people themselves in their technical understanding. And this is not unique today. In From Gutenberg to Google I tell the story of how 19th-century members of Congress simply could not comprehend the telegraph. In fact, the bill funding the test telegraph line barely passed the House of Representatives, with about a third of the House abstaining rather than having to explain to their constituents why they were spending money on this idea of sending messages by sparks.
One of the things that was most intriguing about my time as FCC chairman was that I knew stories like this, I had studied the effects of previous network revolutions, and I had the rare opportunity to put into practice the lessons of history that I had studied. But you’re right, there used to be an adaptation time buffer that allowed individuals and institutions to better come to grips with the impact of new technologies. The internet has erased that buffer.
In the book you write that the “creation of data is the manufacturing activity of the 21st century.” In recent years we’ve seen the negative effects of that hunger for data. And yet in the U.S., all we’ve seen in response is a handful of hearings. Do we need regulation in this space?
Digital information is the capital asset of the 21st century. We have no choice but to establish policies for the use of that digital asset—especially personal information—and we must do it with dispatch.
Previously, whether gold, or oil, or any other hard asset, there was a finite supply, and a finite demand. But in today’s digital environment, every activity creates new data. Thus, the asset is in infinite supply. And, the application of that asset is also inexhaustible. Now, it is one thing when that data is about jet engine performance, or the predictive maintenance of equipment. It is something completely different when it is personal information collected, aggregated, and monetized by targeting us, which is what the dominant digital companies of today do. They take our private information and convert it into their corporate asset. Currently, these companies are making the rules in their own interests. But it is essential that the people’s representatives step up and establish rules in the public interest.
You also explore how the domination of early networks, like the railroads, led to the formation of monopolies like Standard Oil and Carnegie Steel. And, you write that you see the same patterns emerging with tech companies, such as Facebook, Google, and Amazon. Well, we know what happened to Standard Oil. Does a similar fate await these tech giants, eventually?
Historically, pioneers make the rules for the new territories they discover, until those rules begin to impinge on the well-being of the public. The antitrust laws were established precisely for this purpose: to create a countervailing force to corporate power. What we are experiencing now is the establishment of new dominant corporations: both the digital platforms, and the networks on which they travel, are acting as gatekeepers for the most valuable assets of our era.
Companies like Google and Facebook, for example, began with a simple proposition: that users would trade some of their information for services. When it became clear that such information could be monetized, the demand for more information became the prevailing business plan. And these companies have been successful beyond their wildest expectations. They have amassed huge databases that they now exploit to dominate markets. And I believe we should pursue all available remedies. In addition to maintaining antitrust vigilance, including merger approval, we also need to import the same competition-enhancing and consumer protection concepts to legislative and regulatory oversight.
I have to ask about net neutrality, which the FCC codified in 2015 on your watch, only to see the current administration repeal it last year. What happens next?
I believe that we have yet to see the ultimate resolution of the open internet question. The Trump FCC may have destroyed net neutrality rules, but that decision has been appealed to the courts, and Congress has a renewed interest in the topic. So I am hopeful we will see sanity return.
We just discussed how dominant gateways control markets, and the underlying dominant gateways today are the networks that connect us to the internet. The entire concept behind net neutrality was that those networks should be fair and open. But net neutrality isn’t just about competition. It is also about freedom of expression unconstrained by intermediaries. The networks today have the economic incentive and the technological ability to discriminate among users to maximize their own interests. Everyone who believes in the free flow of ideas should be concerned about that.
In your epilogue, you describe this book as “a technological travelogue,” which it certainly is. As we keep traveling, what’s awaiting us down the road?
In the book I discuss four forces that will make this era as transformational as the earlier great network revolutions—the evolution to Web 3.0 and a network that orchestrates rather than simply transports information; artificial intelligence; blockchain; and the expanding threat of cyber-attacks.
But let me respond to your question with a broader brush: the history of network revolutions is also the history of social and economic instability, and insecurity. And working through these issues in a democracy takes time. As individuals and institutions are impacted by new technology, and liberal democratic capitalism appears slow in responding, the political impetus is to search for quick solutions. We see this now, manifested in the rise of authoritarianism, Brexit, and Donald Trump. But it is not as if we haven’t been here before. At the dawn of the industrial revolution, when the rules that had worked for agrarian mercantilism were no longer adequate, the result was antitrust legislation and consumer and worker protection laws that established guardrails on the excesses of capitalism. We are at a similar moment today.