Wu’s Advice On ‘The Internet’s Midlife Crisis’

BY CCIA Staff
October 26, 2010

At Monday’s New America Foundation event, “The Internet’s Mid-Life Crisis,” Tim Wu of Columbia University Law School offered a preview of his upcoming book The Master Switch:  The Rise and Fall of Information Empires and called for a separation between Internet content and service providers. He said consumers are harmed when content and delivery become vertically integrated.

Firms that attempt such integration try to reduce consumer choice by boxing in consumers.

A current example is the proposed Comcast-NBC Universal merger, where an ISP with near monopoly power in several markets would have the capability to box in consumers with Comcast-NBC owned and distributed content to the detriment of both consumers and other content creators.

Wu warned of the dangers of monopolization, closed networks, and closed systems within the technology and telecommunications sector.

Taking aim at Apple’s business model and last week’s statements on Google’s Android operating system by Apple CEO Steve Jobs, Wu acknowledged that in the short term Apple’s closed system may lead in the product and service markets. However, he said the closed model eventually shifts from focusing on producing better products and services for consumers to protecting market share by suppressing technologies that threaten the company’s dominance.

While closed systems provide convenience, that convenience often comes at the price of limiting consumer choice and stifling innovation.

Wu mentioned several prescriptions for keeping the Internet open for competition and innovation, including:  strong government oversight of market power in the technology and telecommunications sectors, net neutrality, and enforcement of antitrust laws against restraints of trade and monopolists in the hi-tech industry.

Related Articles

CCIA Responds to Public Consultation on EU Proposal for a New Competition Tool

Sep 8, 2020

Brussels, BELGIUM –The Computer & Communications Industry Association offered comments on the European Commission’s public consultation on the forthcoming proposals for a new complementary tool to strengthen competition enforcement (“NCT”) today. The consultation questions cover a wide range of issues around perceived gaps in the current EU competition rules, particularly those related to what are…

CCIA Expresses Disappointment In Flawed 9th Circuit Qualcomm Decision

Aug 11, 2020

Washington — The 9th Circuit today overturned a district court decision by Judge Lucy Koh, holding that Qualcomm had not violated the antitrust laws by refusing to license competitors in violation of its contractual obligation to do so, by refusing to sell chips unless the customer first took a patent license, and by engaging in…

CCIA Reacts To UK Competition and Market Authority’s Final Report On Online Platforms And Digital Advertising

Jul 1, 2020

Brussels, BELGIUM — The UK Competition and Markets Authority today published its final report on online platforms and digital advertising. The CMA’s recommendations would grant far-reaching powers to a new digital regulator to impose company-specific regulations, force product design changes, redistribute assets, and order the breakup of platforms. The Computer & Communications Industry Association encourages…