Monday, January 17, 2011

Fear of Disruptive Technologies...Where Could We Be?

"Yes, Bell Labs was great. But AT&T, as an innovator, bore a serious genetic flaw: it could not originate technologies that might, by the remotest possibility, threaten the Bell system. In the language of innovation theory, the output of the Bell Labs was practically restricted to sustaining inventions; disruptive technologies, those that might even cast a shadow of uncertainty over the business model, were simply out of the question. 
"The recording machine is only one example of a technology that AT&T, out of such fears, would for years suppress of fail to market: fiber optics, mobile telephones, digital subscriber lines (DSL), facsimile machines, speakerphones - the list goes on and on. These technologies, ranging from novel to revolutionary, were simply too daring for Bell's comfort. Without a reliable sense of how they might affect the Bell system, AT&T and its heirs would deploy each with painfully slow caution, if at all." 
From page 107 of The Master Switch (2010) by Tim Wu

  As a young person who is living in this age of paper thin laptop computers and cell phones with an insane number of capabilities, it is hard to imagine what kind of technology is being developed as we speak (or blog). Perhaps it is because technology has made such huge advances in my lifetime. Personally, I can remember one of my father’s first cell phones, which was equivalent to the size of our landline phone today. To me, it appeared that corporations and firms were coming out with a new, more advanced technologies everyday, each of which made day-to-day life that much easier. 
  It is probably for this reason that reading Tim Wu’s The Master Switch and his section on the monopoly that was AT&T had such a profound effect on me. The emotions which I felt after reading the above passage were those of anger and frustration. As shown in Wu’s writing, AT&T, in essence, hindered the progression of technology because of their own selfish fears. I think that this notion angered me so because it caused me to question what other kind of life-changing technologies have been kept from the general public as a result of greed. If a device as simple and useful as the answering machine was worth hindering for sixty years, as AT&T did, what other, more advanced technologies have been kept from us? Where could we be today if not for the selfishness of firms in the world market?
  I think that, for my generation, it is difficult to imagine a company with the amount of power that AT&T had while at it’s monopolistic peak. Because the monopoly was broken up nearly ten years before I was born, I cannot fathom a corporation with that much of an influence on the way that the United States operates. I think that Wu does a good job of attempting to show their influence to those of us who cannot envision such a company. The passage above continues the theme of disruptive technologies, which is ever-present in The Master Switch. It shows how far monopolies would, at one time, go to protect their revenue stream from competition from newer technologies. It is, however, my opinion, that AT&T managed to shape history, or technological history, at least, because they repressed such life-changing technologies for so long. But, as the saying goes, what’s done is done, and we will never know where the world could be today had such innovative technologies been released at the time of their invention. 

Works Cited:
Wu, Tim. The Master Switch: The Rise and Fall of Information Empires. New York: Knopf, 2010.

3 comments:

  1. Claudia, excellent post on Wu book "the Master Switch." I too have read this book and must say I was enraged when I read about the answering machine. Who knows how far we could be technologically speaking. It enraged me because this was because of a couple greedy moguls who wanted to get rich, this was the trade off between a more advanced society. I look forward to what you write in the future! Thanks so much for your post.

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  2. I understand your point of view, but I would never imagine or expect that a large corporation with a huge amount of revenue and profit would essentially risk dismantling itself. That just isn't realistic. I think it's a great first post though. It really dissects this particular aspect of the reading.

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  3. Well considered post here. While I agree with the idea of Michael's comment, I'd add that the smartest companies always prepare to evolve.

    They wouldn't want to be broken up by government action, yet a failure to innovate can, ironically, lead to their downfall. Time Warner/AOL broke apart without any government action because they chose a bad business model; had they come up with innovations to reward their subscribers with all that outstanding Warner Brothers content and high-speed access to the rest of the Internet, they might be as big as today's AT&T or Verizon or Comcast.

    Yet if you want to see a Warner Brothers cartoon in all its glory, you have to go to YouTube today or buy an expensive DVD...they still don't "get it" do they?

    But the old Time Warner/AOL didn't plan beyond dial-up service and a "walled garden" model, until it was too late. Then circumstances broke the company up as surely as the Federal Government had done with AT&T.

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