Who Makes The Rules In The Tech Industry?

Welcome to the Digital Transformation Podcast. Interviews with best-selling authors, innovative thought leaders, and top-shelf executives all driving today's digital success. This is the show that will help you take advantage of digital transformation to build your business and career. I'm your host, Kevin Crane, and I'm so pleased that you're listening.

Our guest today is former FCC Chairman Tom Wheeler. Tom became Chairman of the Federal Communications Commission in 2013 and served in 2017. Chairman Wheeler was appointed by President Obama. Over three decades, Tom has been involved with new telecommunications networks and services, experiencing the revolution of telecommunications as a policy expert, an advocate, and a businessman.

As an entrepreneur, he started or helped start multiple companies offering innovative cable, wireless, and video communication services. In fact, he's the only person to be selected to both the Cable Television Hall of Fame and the Wireless Hall of Fame. President Obama calls him the Bo Jackson of telecom. And Tom is with us today to talk about his book, TechLash, Who Makes the Rules in the Digital Gilded Age.

So, Tom, welcome aboard to the program today. In TechLash, you connect the experiences of the late 19th century's industrial gilded age with today, indeed calling today the 21st century digital gilded age. Can you tell us more? What are some parallels in your book that we should consider?

As you said in the introduction, I've been involved in technology and technology policy for longer than I'm willing to admit. But along the way, my avocation has been as an amateur historian. And when I looked at the experience of the original Gilded Age, which was roughly the 1870s until the early 20th century, I was amazed at the similarities between the experience we're having today. And that became the thesis of the book that we're living through the new digital Gilded Age.

But stop and think about it for a second. New technology is driving change, creating new economic models, creating wondrous new products, low prices, accelerating the pace of life, destroying small local businesses, creating monopolies, creating great wealth disparities, causing consumer harms, And even fake news was something that was very prevalent in the original Gilded Age. And so I looked at all of those and I said, my goodness, history doesn't repeat itself, but it oftentimes rhymes.

And as I looked at those comparisons between what we're experiencing today and the original Gilded Age, I said to myself, wow, this certainly does rhyme. And can we find rhymes in not only the technology area and the economic and societal effects of that technology, but also how to deal with it? well the comparison is apt technology innovation in the industrial age created a great deal of wealth and innovation often against the public interest and the rights of others and as you say you say it's happening again today digital technology has changed commerce and culture all while being essentially unsupervised so who does make the rules what what is needed to really safeguard public interest from big tech policies and practices well kevin one of the other similarities between now and then is that it is the innovators and their investors who make the rules.

That in the original Gilded Age, it was, you know, in the book, I quote JP Morgan, who was the financier of much of the early industrial activity. And he said something to the effect that certain men of property can do with it what they wish. In other words, we'll make the rules because we're the guys with the money. And, you know, there's a modern equivalent of that, a little more sophisticated, but a modern equivalent of that which is what Mark Zuckerberg said when he coined the term move fast and break the rules I mean what are we breaking in that motto We're not breaking tables and chairs.

We're breaking the structures and the behaviors that for 100 years provide stability. And why do it fast? Do it fast before people catch on, so it can get inculcated before everybody realizes what's going on. And that's the kind of situation that we're in today.

Now, heaven to Betsy, we all, you know, innovators and their new rules have been the path to progress for centuries. You know, I mean, the great improvements in science, business, technology, the arts have all come from people who said, oh, I'm not going to think like I've been taught to thought. I'm going to think expansively and break the rules. And thank goodness that happened.

The difference between the original Gilded Age and the digital Gilded Age, however, is that ultimately, in the original Gilded Age, we the people, acting through our elected representatives, rose up and said, that's enough. That the rules that the barons, the industrial barons were making, were harmful to individuals and harmful to the public interest. And the government had to step in to put guardrails and new rules in place. And we're sitting in the same kind of experience today where Internet barons are making the rules, but there have been no guardrails put in place.

And so one of the things that I argue for in TechLash is that we need to have those rules. And I propose a structure for how we create them and what they would look like. Well, tell us more about that. So in the industrial age, the public at large eventually rose up in sentiment and sort of forced the hand to put some guardrails in place.

And you're saying now we lack that sort of uprising, if you will, and you're calling for a new era of public interest and oversight that embraces a new process. Tell us about that process. How can we do it? Well, first of all, I think that that uprising is upon us.

You know, a new study out by Pew found that 68% of the American people thought that big tech was too powerful. And that didn't matter which party you were in or whether you were conservative or liberal. It was a majority of Americans who said big tech is too powerful. We've got to do something about it.

So when we talk about doing something about it, however, we've got to make sure that we structure our oversight in ways that reflect the new challenges, not the old challenges. You know, there's a I was I was sitting with Madeleine Albright, former Secretary of State Madeleine Albright, one time when we were talking about the impact of technology on on diplomacy. And she said, you know, the trouble with diplomacy is that you take 21st century problems, define them in 20th century terms and propose 19th century solutions.

And I said, Madam Secretary, I'm going to steal that line because that's a great description of where we are in technology policy. And so we need to, but when we deal with these new challenges, we've got to think in a new approach and not just copy the regulatory structure that was created for the industrial era. Let me give you a quick example. When I was chairman of the FCC, I had to interpret for digital realities a statute that was written in 1934 before television broadcasting.

And, you know, the world then was a little different. And they, you know, they did not anticipate what was happening. So we need to have statutes that reflect the realities of today rather than are anchored in what was yesterday And so what I propose in the book is we need a new digital platform agency So you're calling for a new agency to oversee this. Tell us a little bit more about that agency and how you envision that agency working.

Well, you know, it's not unusual that when something of a big change comes along that we respond by putting a specialized structure in place. The first regulatory agency was the Interstate Commerce Commission that was created to oversee the huge power of the railroad in the original Gilded Age. We created the Securities Exchange Commission to oversee the financial works. We created the Federal Trade Commission to oversee unfair deceptive acts or practices.

We created the FCC to oversee communications. So it's not fair to say to those industrial agencies, try and play catch up with a statute that is in it, by definition, is limited. and it is not fair to the people to say, hey, let's see how we can put this round peg in a square hole. And so what I proposed was the creation of a new digital platform agency.

That's the headline, but that it also has to operate differently because the challenge of modern regulators is you're walking a tightrope between protecting consumers and competition and stimulating innovation. And you can get too micromanaging in your regulation and choke innovation. Or you can just say, well, have at it, do whatever you want, and turn around and hurt consumers in competition. So what I tried to lay out was a new structure where we actually clone the ideas of the digital companies themselves.

You know, the digital companies operate, build their technical standards so that they can interoperate and all the technology works together. They build them by what's called a multi-stakeholder process where they all sit around and say, okay, we're going to come up with this standard. And that standard is agile enough to evolve as technology changes, as the marketplace changes. Think about cell phones, for instance.

How did we get from 1G to 2G to 3G to 4G to 5G? And now we're working on a 6G standard. How can we have government oversight that has that same kind of agility and encouragement of innovation? And that's what I propose we clone and bring into the federal government.

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You are listening. You're listening to the Digital Transformation Podcast. We are here today with former FCC Chairman Tom Wheeler. We're talking about his book, Tech Clash, Who Makes the Rules in the Digital Gilded Age.

Now, Tom, before our time is up, I need to ask you about net neutrality. Yes, sir. Happy to talk about it. Proud to talk about it.

Well, put it in perspective, net neutrality supporters believe the Internet should remain free and open and nondiscriminatory. Net neutrality opponents, including many tech giants, maintain that government legislation of the Internet is an unnecessary barrier to innovation and growth. Now, back in September, the FCC introduced rules to help protect net neutrality. What are your thoughts on net neutrality, where we are today and where we need to go?

Well, I'm a strong supporter of net neutrality. As you know, while I was chairman, we enacted net neutrality rules. Unfortunately the Trump FCC came along and immediately repealed them But let go back in history and let understand that when you have a network that is as important as the broadband network that delivers everything from Netflix to connecting your hospitals so you can take x-rays to experts, that that network needs to be open and non-discriminatory. And it's something that goes back, you know, literally goes back to the time, the concept goes back to the time when England was coming out of feudalism and common law developed, which had a concept in there called the duty to deal.

that when the lords were ruling everything, you know, the feudal lords, they would say to the ferryman, who's going across the river, you're only going to carry my stuff across the river. You're not going to carry somebody else's. And common law came along and said, no, you carry everybody, nondiscriminately. You could charge for it, but you need to carry it nondiscriminately.

When the telegraph came along, we did the same thing for the telegraph. In the United States, the Pacific Telegraph Act said that it has to be non-discriminatory. When the telephone came along, we said, no, you have to be non-discriminatory. And yet somehow, when this new network comes along, the argument gets made, oh, no, we need to be able to discriminate.

And my comment to that is baloney. You need to have a set of structures in which somebody can say, is the behavior that is going on just and reasonable, rather than have the networks making the rules themselves? Again, it's back to the theme of who makes the rules and where is the protection for the rights of the people and the public interest in that process. And the rules, you know, you should not be grading your own homework, right?

The rules should not be made by the same people who stand to profit by abusing their practices. Do you want to be a guest on the Digital Transformation Podcast? Well, it could happen. Tell us about your ideas and advice.

What technologies and solutions do you recommend? And how can our listeners benefit from your approach? Be a guest. Find out more at digitaltransformationpodcast.

net slash guest. You're listening to the Digital Transformation Podcast. We have been speaking today with former FCC Chairman Tom. Wheeler about his book Tech Clash.

And Tom, it's been great speaking with you today. We're almost out of time. But before I let you go, one last question to sort of sum up this perspective on tech and history, if you will. What should we all be thinking about and preparing for and doing now to be prepared for the world in five years' time?

Wow, what a great question, Kevin. You know, I'm not sure I can tell you what's going to happen in five years. You know, I've lost the Windex bottle for my crystal ball, you know, but how we prepare for it is we have to be willing to think about new approaches to new challenges and that we need to have the agility to be responsive to those changes by saying this is the kind of guardrails, these are the kinds of policies that need to be in place, rather than trying to shoehorn them in to policies that may have worked 50 or 100 years ago.

That is Tom Wheeler. Get his book, Tech Clash, Who Makes the Rules in the Digital Gilded Age? Tom, it's been great speaking with you. Thank you so much for being our guest today.

Kevin, thank you. I've enjoyed it. That'll do it for this episode of the Digital Transformation Podcast. But join me next time when I continue to talk to best-selling authors, innovative thought leaders, and top chef executives, all driving today's digital success.

And I'll talk to you next time on the Digital Transformation Podcast. Thank you.