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Overview

Information is critical in today’s world. Therefore, who controls the flow of information? The internet is a global resource that anyone can use to spread information. It has no owner and belongs to no one. But like other technologies before it, the internet may be in trouble because corporations are taking over its control.

Some of the world’s biggest ideas are conceived in garages. In fact, AT&T was reluctant to reveal that it invented a key technology like the answering machine because they were afraid competitors would copy their idea and beat them to the market. The internet is probably an exception when it comes to monopolies as people believe government can intervene if there is unfair behaviour, but this isn’t true as we’ll find out later on in this post.

Big Idea #1: Phone, radio and film all had a period of “openness” in the early days of the technology.

Throughout history, technology has followed a typical progression. At first, it’s freely accessible to everyone but then slowly becomes controlled by one corporation or cartel.

The cycle is a typical progression from open to closed.

The development of the telephone is a good example of this. The cycle usually starts with an inventor trying to solve a problem in his or her garage or basement.

The telephone was invented by Alexander Graham Bell, who rushed to register a patent after he got the idea of converting electrical currents into sound. He wanted to make his invention better and faster so that everyone could enjoy it. However, many people had already begun tinkering with the technology before Bell’s patent expired in 1894.

Radio was also an open medium. It was developed by amateurs and hobbyists, and it was easy to set up your own local broadcast station.

In the early days of radio, there were no restrictions on what could be broadcast. Some stations played jazz and others focused on political issues. There was also a period of openness in film. In the early twentieth century, American film was controlled by the Edison company, which held all the important patents for movie technology. By 1909, however, American theaters declared their independence from that monopoly and broke it up.

By 1915, the film industry had opened up. This led to an era of creativity as films were made about all sorts of subjects and for specialized interests.

Big Idea #2: Telephone, radio and film eventually succumbed to the control of closed, commercialized industries.

So, what happens when an industry opens up? It gets monopolized and becomes closed off. The telephone is a good example of this.

AT&T was founded by Alexander Bell. It had a monopoly on long distance calls, but local companies threatened to take over the market in the early 1900s.

AT&T responded by lowering its prices, which forced others to follow or go out of business. This is how AT&T established a monopoly.

The radio industry quickly became commercialized after the telephone. By 1923, it was mostly run by advertisements instead of donations from listeners.

With the rise of radio in the early 1900s, stations sought to gain as many listeners as possible. They were commercial enterprises, and by the 1930s they were dominated by a few broadcasting networks such as CBS (Columbia Broadcasting System) and NBC (National Broadcasting Company).

After the Edison film cartel was broken up, the industry became monopolized again ten years later by Paramount. If theaters wanted to show Paramount’s hit films starring major actors, they had to buy a full year’s worth of films without previewing them first.