Once upon a time, some thought it obvious that competition was a bad thing, particularly in communications. As Theodore Vail, the president of AT&T, put it in 1913, “The public as a whole has never benefited” from competition. Monopoly, he said, was the better choice. The reason, he argued, is that “all costs of aggressive, uncontrolled competition are eventually borne, directly or indirectly, by the public.”
Nowadays corporate executives carefully avoid expressing such sentiments. Instead, firms such as AT&T speak of the importance of “vigorous competition” even when it is being eliminated. Anything that might sound like the advocacy of monopoly has fallen into the same category as the advocacy of eugenics. But take a look around. What do you actually see, in so many important markets? The answer, quite obviously, is rule by either a single dominant firm or a small group. This is particularly true in the information and communications industries. Search engines? Google. Social networking? Facebook. Operating systems? Microsoft (mostly). Cell phones? Verizon, AT&T, and Sprint (T-Mobile bracketed). Could it be that Americans actually like communications monopolists? Do we want dominant firms to run our world?
Richard R. John’s splendid book helps to answer that question by telling us just where this American affection for info-monopoly came from. John has produced a detailed study of the granddaddies of it all: AT&T and Western Union, the first great info-monopolists, whose role in communications history is similar to that of the Allosaurus and the T. Rex in the history of the animal kingdom. A work of careful history based on archival research, Network Nation begins with Samuel Morse’s construction of the first electric telegraph line in 1844 and concludes with the establishment of AT&T (or Bell, a term that can be used interchangeably with AT&T) as America’s regulated telephone monopoly. This was the form that dominated long distance communications, mainly unmolested, for nearly seventy years. And in many ways, sometimes unconsciously, the old system of AT&T monopoly still influences the relations between America and its information monopolists.