Could Net Neutrality be to innovation what AT&T’s monopoly was to Bell Labs?

As a facilitator of innovation and ideation session, I’ve always been fascinated with the history of Bell Labs. Bell Labs was once thought of as the source of most modern innovations. Their lab, after all, created the beginnings of technologies like the transistor, radio astronomy, UNIX operating system, C programming language, C++ programming language, to name just a few.   The work done at Bell Labs built the foundation for modern invention leading to phones, space exploration, the internet, music distribution, cell phones, radio and television and more. From the 1930s to the 1970s, Bell Labs in New Jersey was the equivalent of modern day Silicon Valley, laying the groundwork for future technology. Bell Labs was a separate entity but controlled by AT&T, which was a regulated monopoly by the U.S. government. The U.S. Government sought regulation over AT&T and its Bell Labs for decades, culminating in the breaking apart of AT&T in 1984.  Over the years, Bell Labs was forced to open up many of its patents. The idea was to protect the people and ensure that a monopoly didn’t form and control pricing over an important utility, the phone system. But after World War II, was this regulation really necessary? And, did it really help advance technology faster or did it slow down what could have otherwise been? Many of the early inventions at Bell Labs have led to the digital world we now live in each day. What ultimately happened was AT&T had no incentive to release its new technologies to the marketplace because it was regulated – there was no market reason to move people to cell phones even though the technology was available back in World War II – why would they?  Ironically, competitors like MCI, by sheer entrepreneurial drive found a way, regardless of government intervention to regulate or control the phone system – it had to break free to respond to market demands.

As the concern over regulation of the internet and the Net Neutrality debate has continued, I began to wonder if there were any similarities. After all, when most of us think of who the Bell Labs of today might be, companies like Apple, Google, Amazon, and Samsung all come to mind – they are developing technologies and investing heavily in new technologies that could lead to our future – a future most of us can barely imagine like driverless cars or contact lenses that project images from the internet direct onto our eyes. While some of these companies are investing more into devices and tangible assets, they all rely on the internet and free scalable use of the internet by not just their consumers but other entrepreneurs and companies who build ideas like Uber or Grubhub that further the usage of their devices by consumers. They are able to patent and protect and leverage their research and development investments in the marketplace. Would regulations that originate in the idea of Net Neutrality have the same impact of the regulation of AT&T over 5 decades? Will it further or stymie growth?

Another interesting observation, the internet began shortly after the divestiture of AT&T and Bell Labs in 1984. Prior to this time Bell Labs was the authority on networks, but their knowledge and expertise was disbursed in the divestiture. While some facet of standards may certainly be helpful to the technology backbone of the internet, government regulation may not be the way to go.  The software industry has found its own set of standards.  

I certainly don’t have all the answers, but a first step is posing the question. Regulating the telephone company sounded like a good thing at the time and probably was in those early years. Just like Net neutrality. The difference here is our society is a bit more sophisticated and the internet has flourished in the last 15 years without any regulation. While it sounds like a good thing, it is in fact, regulation, which should be reserved for ensuring safety or security of people. Will regulation now really help? Are people being harmed by a free and open, unregulated internet? If no, why is it a good idea? Will a select few benefit from this regulation? If yes, then why do so many people seem to think it does the opposite? With the changing tides of politics, this is surely a topic to be debated into the future. As with most contemporary questions, history can provide context and guidance to keep us from making the same mistake over and over.