Robinson to Princeton

by on October 3, 2007 · 0 comments

Congratulations are in order to David Robinson, who has left his previous gig at the American Enterprise Institute to take a position in Ed Felten’s new IT Policy Center. David’s a smart guy, and he joins a group that has done some of the most innovative work in tech policy, so expect big things from them in the future. Today he’s got a post up at Freedom to Tinker comparing today’s network neutrality debate to the Western Union telegraph monopoly. Here’s a quote from Paul Starr’s The Creation of the Media:

[W]ithin the United States, Western Union continued to dominate the telegraph industry after its triumph in 1866 but faced two constraints that limited its ability to exploit its market power. First, the postal telegraph movement created a political environment that was, to some extent, a functional substitute for government regulation. Britain’s nationalization of the telegraph was widely discussed in America. Worried that the US government might follow suit, Western Union’s leaders at various times extended service or held rates in check to keep public opposition within manageable levels. (Concern about the postal telegraph movement also led the company to provide members of Congress with free telegraph service — in effect, making the private telegraph a post office for officeholders.) Public opinion was critical in confining Western Union to its core business. In 1866 and again in 1881, the company was on the verge of trying to muscle the Associated Press aside and take over the wire service business itself when it drew back, apparently out of concern that it could lose the battle over nationalization by alienating the most influential newspapers in the country. Western Union did, however, move into the distribution of commercial news and in 1871 acquired majority control of Gold and Stock, a pioneering financial information company that developed the stock ticker.

This is, of course, the position Felten has staked out in the network neutrality debate: that actually passing regulations is likely to have negative consequences, but that Congress and the FCC can use the threat of regulation to prevent the telcos from mis-behaving too egregiously. I’m personally not entirely comfortable with this approach because I think we should be wary of letting government officials to govern by threat rather than explicit regulation. But so far, that’s the strategy we’ve been following by default, and it appears to be working pretty well.

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