There is much discussion these days about the hammer of government regulation that may come down on internet companies–Facebook, Twitter, Google, Amazon, Microsoft. It’s already happening in Europe. One observer commented that
Georgia farm woman with electric refrigerator, 1930s — http://hdl.loc.gov/loc.pnp/ppmsca.01761
“Around the world, governments are moving simultaneously to limit the power of tech companies with an urgency and breadth that no single industry had experienced before.”
But many new industries in the past have experienced a rush of regulation–at just about this point in their development. What starts out as a novelty begins to spread, gets cheaper, spreads more, becomes an important practical tool for many if not most people, and finally becomes a necessity of modern life, a public utility (“a firm providing essential services to the public”) calling forth government intervention.
Two kinds of intervention in particular: One is to subsidize, require, or even directly provide universal access to a technology that started out as a luxury for the few. The other is to regulate the provision of that technology so as to reduce its cost, maintain minimal standards, and avoid negative externalities–accidents, extortionist pricing, pollution, unsightly equipment, and so on.
The tech past may be the tech prologue here.
Past
The case I know best is the telephone (see America Calling). In 1876, Alexander Bell introduced his new device in a theatrical demonstration and it was received as a novelty. But the Bell Company was soon marketing the telephone, first for business applications, then for businessmen’s homes, and then for the wider middle class. As the technology spread and became more useful around the turn of the century, public demand for more access, lower prices, and less company arrogance increased (especially among the rural Americans whom the industry largely spurned). The technology was moving from luxury to necessity.
City politicians started to pressure local phone companies for wider access (although sometimes just for bribes); state officials investigated; and eventually the federal government threatened anti-monopoly action against the Bell System of companies. By the 1920s, telephone service was becoming a regulated utility. The Bell System made large profits. In return, it and its few oligopoly partners had to deliver service to everyone–eventually even to farm families–and keep rates for basic service low, which they did mainly by charging especially high rates for long-distance calls. By the 1960s, almost all American households had–and were expected to have–their own telephones.
The story of home electrification is roughly comparable. A novelty of the 19th century, then a service for illuminating some streets in big cities and lighting the homes of a few well-off people, middle-class Americans increasingly could afford electricity. And they–especially housewives–increasingly insisted on having it. Finally, electrification reached a point that to be without it was to be among the truly disadvantaged. Government projects to electrify homes were launched by the New Deal. That was one mission of the Tennessee Valley Authority; it showed how government could challenge private electric companies. The Rural Electrification Act of 1936 started decades of subsidies for universalizing access to electricity. Agricultural extension agents also encouraged farm families to use the electricity by buying appliances such as irons. Today, some municipalities provide public power. On the regulation side, of course, federal and state utility commissions oversee privately-owned power companies.
Another example: technologies for bringing water into urban homes and taking sewage out of them followed similar paths from being privately provided services for the affluent to being regulated utilities for all (see, e.g., here).
(By the way, all this is not to deny that regulators are often “captured” by the regulated companies, limiting the protection they can provide for consumers.)
The automobile started out as plaything for the affluent, but its history is atypical in that car ownership is not universal nor is government committed to making it so. Nonetheless, much that makes mass ownership of automobiles possible is provided by or regulated by government: road paving and maintenance, driving rules and their enforcement, safety procedures, rules about auto loans, pollution regulation, mileage regulation, etc.
The typical history fits not only hardware technology, but “soft” technologies as well–for example, schooling, insurance, and banking. A muddier case is medical care in the United States. By fits and starts, some form of government-guaranteed health care (Medicare, Medicaid, military, and Obamacare) has covered many Americans, but a universal guarantee of regular medical care is far off and its regulation is a mess.
Future
Commonly, then, a new technology that is so valuable as to become interwoven into middle-class life generates public pressure to provide it cheaply to everyone and to regulate it. Access to the internet itself has reached that stage, accelerated by the work-by-Zoom, school-by-Zoom, and visit-by-Zoom experiences of Covid-19. Just as one could not really partake, economically or socially, in late 20th-century life without a telephone, one cannot partake in early 21st-century life without functional access to the Internet. Moves to subsidize broadband access throughout America and to establish “lifeline” rates are afoot. (Also under debate, fostered especially by Trump’s banishment, is whether access to online media platforms has itself become a social necessity.)
On the regulation side, there are many contested issues: Apple’s commission on apps, Amazon’s treatment of third-party vendors, privacy across many platforms, screening of political content, fairness of Google searches, the algorithms driving video offerings. There are even efforts to break up the big tech companies (as Standard Oil was broken up in 1911).
If history is any guide, it might behoove the big tech companies to shape their coming regulation rather than to resist it.
Ag. Ext. agent and farmer checking electric meter, Iowa, c. 1940 — http://hdl.loc.gov/loc.pnp/fsa.8a05975
