Piracy_ The Intellectual Property Wars from Gutenberg to Gates - Adrian Johns [234]
What triggered intense debate about patenting and the place of sci- encewere a series of federal inquiries into the communications industries. The major focus was on the American Telephone andTelegraph Company, AT&T. AT&T at this point held the largest accumulation of capital by any private company in history. It had $5 billion of gross assets, and annual revenues of $i billion. It oversaw two hundred nominally separate "vassal corporations" with a total of over 300,000 employees-itself a drop of i5o,ooo from the peak in 1929. This "Bell System," as it was called, provided 80-9o percent of local telephone lines, 98 percent of long-distance lines, and virtually loo percent of the wired links on which radio broadcasting depended. The conglomerate also had a monopoly on radiotelephone communications across the Atlantic and Pacific. In addition, it manufactured more than 9o percent of the equipment used in American telephony, by virtue of its wholly owned subsidiary, Western Electric. And Western and AT&T jointly owned Bell Laboratories, the world's leading industrial research institution. Bell Labs conducted scientific research in all subjects related (sometimes loosely) to electricity, communications, and acoustics, and was the exemplar of industrial science. All this rested on AT&T's patent portfolio-"the Bell System," the FCC declared, "is built on patents"-which derived from research and purchases alike. That portfolio extended far beyond wired telephony, embracing radio, the sound equipment on which the movie industry depended, therapeutic devices, PA systems, and timing equipment for sports events. In effect, the system held an effective monopoly on all "communication by wire and wireless."
The Roosevelt administration's inquiry into this behemoth grew into the largest of all the antimonopoly investigations of the age. It lasted two years and produced sixty volumes of transcripts, two thousand exhibits, seventy volumes of internal briefings, and two reports-as well as more than forty volumes created by the Bell System itself in its defense.8 And it offered a perfect occasion to appraise "the adaptation of scientific discoveries to the purposes of production." As one official put it, the AT&T investigation became the era's principal venue for debating the consequences of patents in general for society, science, and industry. Roosevelt insisted on this broad remit, having declared in his second inaugural that the government ought to "create those moral controls over the services of science which are necessary to make science a useful servant instead of a ruthless master of mankind." He had recruited MIT President Karl Compton to head a Science Advisory Board, encouraging supporters to believe that such moral oversight might actually happen. The AT&T inquiry was the battleground on which the fate of that idea would be decided.
The telephone empire had always been the subject of peculiar public resentment. As early as i89i, its own legal adviser had warned that it held "a monopoly more profitable and more controlling- and more generally hated-than any ever given by any patent." Challenges had loomed up continuously at first, and the company's culture still reflected its early experiences fighting off "piratical opposition." Only once, however, in the early twentieth century, had "independent" telephony posed a real challenge. At that time operators had cropped up everywhere, even though the trust had ensured that "nothing relating to the science of the telephone art should become public"; some