Privacy in Your Digital World

           

            Do you think your Facebook profile, your Verizon text messages, and your Google searches are private? If your answer is yes…think again. In the first half of 2010, Google received 4,200 requests for customer data from law enforcement agencies. Verizon received 90,000 requests in 2007. In 2009, Facebook received 10 to 20 subpoenas and other orders daily. So, I have come to the conclusion that it does not matter how “private” I make my Facebook page because the government can request access to it. However, I’m sure law enforcers are far more interested in finding the members of the antisecrecy group, WikiLeaks than looking at my Facebook profile.

            As a result of Internet advancements enabling people to store e-mails, photos, and documents, a recent New York Times article alluded to federal law enforcement officials’ plans to request new regulations. These regulations would allow law enforcers to perform legal wiretaps of various Internet communications more easily. As Lawrence Lessig discussed in Open Code and Open Societies, “though nations like the U.S. will sing about the importance of free speech in cyberspace, and about keeping cyberspace free, when it comes to issues of national security – as all things copyright are – values fall away” (12). As companies like Google, Facebook, and Twitter continue to be bombarded with data requests, they may be forced to comply. If there is a security concern, should companies give law enforcers customer data or protect privacy? If a member of Al-Queda is tweeting about his plan to bomb the Pentagon, then yes, law enforcement officials should have access to customer data. In an effort to fight terrorism and crime, I can understand law enforcement officials desire to obtain certain private information on the Internet. The question becomes: are companies like Twitter and Google responsible for informing their customers that the government wants to access their information?  In terms of Twitter, when the government wanted information about WikiLeaks members, Twitter notified its customers. However, most companies are not required to notify their customers if the law enforcement wants access to customer data.

            After reading Open Code and Open Societies as well as the New York Times article, I have realized no information you divulge about yourself on the Internet is private. Once I hit send on an e-mail, it is in cyberspace and there is no un-send button. It is important to think twice before tweeting or uploading a photo because information on the Internet is oftentimes, available to anyone.

Fuel for the Cycle

            I communicate using technology daily, and I must admit that until I read The Master Switch, I never considered how information industries have evolved and shaped our country during the twentieth century.  How did we move from my grandmother listening to FDR on the radio in 1933 to skyping with me at college in 2011? According to Tim Wu, this has been made possible because these industries have moved through The Cycle, which is “powered by disruptive innovations that upend once thriving industries, bankrupt dominant powers, and change the world” (20). Wu supports this idea with a particular claim about the inevitability and the importance of creative destruction that I found to be the extremely compelling: “Creative destruction is the essential fact about capitalism. It is what every capitalist concern has got to live in” (28).

            Wu supports his claim in favor of creative destruction through examples in the telephone and radio industries. In the telephone industry, America’s greatest and longest-lasting communications monopoly, AT&T, thrived from the early 1900s until the break-up of the Bell Empire in 1984 and the emergence of a new competitor. It was the upstart firm, MCI, with its microwave transmission technology that creatively destroyed AT&T’s monopoly of telephony. Why is creative destruction and competition healthy for our economy? According to Wu, one corporate entity should not be responsible for the economic well being of the American people because “monopoly presumes a prescience that humans are seldom capable of” (111). It is disruptive innovators, not the monopolists, who guard the general economic good. Wu supports creative destruction and competition because it “revolutionizes industries and ultimately multiplies productivity and value” (195). 

How did creative destruction revolutionize the radio industry? With the introduction of the television.  However, as I discuss in an earlier post, the marketing of television was delayed twenty years from its invention because of the efforts of monopolist David Sarnoff with the FCC acting as his accomplice. Interestingly, Wu points out that this was not the only example of our government assisting monopolies, and therefore disrupting The Cycle and delaying creative destruction. The same was true for AT&T. During most of the 20^th century, AT&T operated as the “most lucrative monopoly in history” (160) with the blessing of the government. Although in 1913 AT&T signed the Kingsbury Commitment to allow independent operators to use its long-distance lines, the government was merely helping forestall openness, competition, and the break-up of AT&T. Wu believes that the government has the power to bless or destroy monopoly power and therefore influence the timing of creative destruction.

            Although I do NOT support the existence of monopolies, and as a consumer I am grateful for creative disruption and competition in our economy, I can sympathize with some of the arguments (albeit with difficulty) of monopoly supporters. These supporters argue, “a federal breakup is an act of aggression and arguably punishes success” (161). In addition, it may in the short-term hurt consumers. For example, in the aftermath of the AT&T break-up, consumers noticed a drop-off in service quality. In The Master Switch, Wu admits, “the ‘competitive’ industries that replaced imperial monopolies were often not as effective as their predecessors, failing to deliver even the fail-safe benefit of competition: lower prices” (161). Even though Wu strives for balance, as he concludes his book with his proposal of “The Separations Principle,” which states that a conglomerate should not own companies in all three content, communications and electronic industries, he acknowledges that monopolies can provide seamless service, efficiency, high-quality content and sometimes even lower prices.   

            In part five of The Master Switch, Wu moves to the Internet and the current battle between Apple and Google and warns that closed, restrictive systems might lead to a new monopoly with fewer choices for the consumer.  Given what has happened to information industries in this country over the last century, why should we believe otherwise? Ironically, AT&T is now the exclusive partner of Apple, which is a closed information system, whereas Google is an open system. In terms of how a closed information system works, Steve Jobs, co-founder of Apple said that, “‘We figure out what we want. And I think we’re pretty good at having the right discipline to think through whether a lot of people are going to want it, too. That’s what we get paid to do’” (297). Apple believes they identify and fulfill popular desires; however, regardless of the success of the iPod, iPad or iPhone, Apple does not satisfy every consumer’s need. In contrast, Google proposes a world with more choice because according to Eric Schmidt, former CEO of Google, “people prefer choice, freedom, and openness” (297). In addition, Tom Conlon of Popular Science believes that, “once we replace the personal computer with a closed-platform device such as the iPad, we replace freedom, choice, and the free market with oppression, censorship and monopoly” (293). The bottom line is that we need an open system in which Apple products are not the consumer’s only available purchase and Wu would like to see the government make sure that this does not happen under his Separations Principle. However, even if a monopoly of the Internet was to take place, if we believe in The Cycle, competitors will eventually emerge because history has shown that creative destruction is inevitable.  

            Creative destruction, fueled by innovation, is the driving force behind Wu’s idea of The Cycle, and leads to the rise and fall of information empires. Without creative destruction and competition, the consumer and the economy suffer. Like Wu, I believe in The Cycle as “it goes without saying that economic vitality – innovation, growth, and opportunity – depends on the freedom of the economic system to rise and fall, crash and burn” (301).  What I wonder is how will I be communicating with my grandmother five years from now?  Will we see the emergence of a new technology by then, or will we still be skyping?  

Good to be Free of the FCC

       

        During the 1920s, David Sarnoff, the founder of NBC, was the single most powerful man in American broadcasting. NBC’s parent company, Radio Company of America (RCA), was the nation’s most important radio manufacturer. David Sarnoff and RCA feared competition, specifically the invention of the television and its potential to destroy the broadcast network NBC and RCA. As a self-centered monopolist, Sarnoff was determined to convince the Federal Communications Commission (FCC) to freeze the marketing of television in order for RCA to make it their invention. Sarnoff’s close relationship with the FCC enabled him to coerce this government agency into agreeing that the television was inadequate to market to the public. To Sarnoff’s satisfaction, the FCC froze the advancement of commercial television for twenty years.

        This example supports Tim Wu’s claim that “there are some substantial dangers implicit in aligning the immense power of the state with the greatest information monopolists” (p. 59). In this particular case, the FCC had the power to fuel or destroy the broadcasting monopoly. Unfortunately for John Baird, Charles Jenkins and Philo Farnsworth, the inventors of the television, the FCC’s decision allowed Sarnoff and RCA to continue their domination of the broadcasting industry. After the FCC’s decision, Sarnoff engaged in espionage, stealing Farnsworth and Baird’s ideas and creating the world’s most advanced electronic television sets.

        Who is to blame for the early death of America’s first television industry? I believe it is without question David Sarnoff, who was an egotistical, conniving monopolist. However, I think the government, specifically the FCC, is also to blame. In the 1920s and still today, we live in a free-market economy where there should be minimal economic intervention and regulation by the state. Yet, it was a government commission, not the market that decided to forbid the sale of the television. In a free-market economy, inventors like Charles Jenkins, who are not aligned with a monopoly, rely on investors to survive. However, the FCC’s actions deterred potential investors, ending Jenkins’ opportunity for survival in the industry.
        If the FCC still disrupted the free-market economy today, we might not have the Iphone, Android, Facebook, or Skype. As Wu questions, “what fate might have befallen…the IPod or a site like eBay, if going to market required firms to first gain federal permission?” (p. 145). Fortunately, the government is acting in the public interest, and we in turn benefit from Wu’s idea of the Cycle, in which creative disruption results in new technology and innovation.

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