In

https://www.texastribune.org/2014/11/14/cruz-explains-his-op...

we have a video clip of Texas Senator Ted Cruz
discussing the important issue of Internet network
neutrality.

Since the issue is important and, thus, we need for
Senators to be well informed, here I respond to the
part of the Senator's statement having to do with
innovation by monopolies.

Here I'm discussing just innovation by monopolies and
am not discussing network neutrality more
generally. And here I concentrate on the Senator's
remarks about innovation by the regulated monopoly
AT&T.

Starting at about 00:55 of the video clip, we have:

"If you look national, when you think of regulated
monopoly, regulated public utility, what are the
adjectives that come to mind? They are not bold,
innovative, fair. Let's give a simple contrast.
The Telecommunications Act of 1934 was adopted to
regulate these [he picks up a black, dial telephone
desk set]. That's what it existed for, to put
regulations in place. And what happened? It froze
everything in place. You are right, it did have the
major innovation of Touch Tone. [audience laughs]
This [puts his hand on the black dial telephone] is
regulated by Title 2. This [Holds up a smartphone]
is not. Your smartphone, the Internet, the apps,
all of this [holding up the cell phone] is outside
of Title 2. The innovation is happening without
having to go to government regulators and say
"Mother, may I?". ...."

Okay, let's look at the part that, since the 1934
Title 2 regulations, AT&T, a regulated monopoly, for
the US voice phone system "froze everything in
place".

Well, it turns out that even after Title 2 of 1934,
AT&T saw some problems and started to attack them:

Problem: Improving on vacuum tubes.

AT&T clearly saw that for the electronic signal
amplification they needed for a good US long
distance voice network, vacuum tubes were a bummer.
The tubes were physically large, expensive,
delicate, and unreliable. With the hot filaments,
the tubes wasted a lot of electrical energy, put out
a lot of heat, and generated a lot of noise in the
signal.

Yes, could use the tubes as a rectifier, but there
AT&T knew that it was possible to do much better
with a selenium rectifier -- solid state, no
filament, small, rugged, etc.

Well, might it be also be possible to have a good
solid state electronic amplifier?

So AT&T Bell Labs started a project to develop such
a device.

WWII was an interruption, but right after the war
progress was rapid, and as in

http://en.wikipedia.org/wiki/Transistor

in 1947 at AT&T Bell Labs John Bardeen, Walter
Brattain, and William Shockley demonstrated the
transistor. Right away AT&T declined to patent the
invention and, instead, gave it to the world for
free.

The transistor was one of the most important steps
up in all of civilization and the ascent of man
and definitely qualified as "innovation", innovation
of a grand kind, a top crown jewel of civilization.

Gee, might the level of innovation of the transistor
compare with that of software for a smartphone app?
Gads, the mind boggles!

Problem: How to transmit as much data as possible?

Even with transistors, it was still necessary to
address how best to transmit data. E.g., what was
the fastest way possible? So, C. Shannon did
information theory and, in particular, found the
Shannon limit. Yes, at AT&T Bell Labs, and more
innovation.

Problem: For digital data, what to do about errors,
say, a few bits flipped the wrong way.

So, R. Hamming invented error correcting coding,
e.g., the Hamming codes based on finite field theory
from abstract algebra.

Yes, from AT&T Bell Labs, and innovative.

Problem: How to transmit billions of bits per
second over long distances?

Clearly something better than twisted pair copper
wires was needed.

So, use optical fibers carrying amplitude modulated
laser light of essentially just one wavelength. For
the lasers, use Ga-Al-As hetero-junctions. Right,
AT&T Bell Labs, and just magnificent innovation.

Problem: How to write software.

AT&T Bell Labs wanted some software so invented the
computer operating system Unix. Since AT&T was a
regulated monopoly, they couldn't sell Unix, so
essentially they gave it away. Then there were
later versions, BSD and Linux. For programming a
language, they invented C. For an object-oriented
programming language, they invented C++, initially a
pre-processor to C. So, in software, from AT&T Bell
Labs we got Unix, C, and C++, and these definitely
qualify as innovation.

Problem: How to build a flexible, reliable digital
communications network?

The DoD Advanced Project Research Agency (ARPA)
addressed the problem and developed TCP/IP and
internets. NSF helped the work go live, and now
we have the Internet.

AT&T Bell Labs also attacked this problem and
invented asynchronous transfer mode (ATM). ATM
worked well for conversational voice and video while
at least initially TCP/IP did not. Early on, ATM
links were important in the Internet, but apparently
in time IP won. Then, sure, for some of the core
of the Internet, the simpler, faster border gateway
protocol (BGP) won.

The Internet would be nowhere without the AT&T Bell
Labs innovations of the transistor, optical fibers,
solid state lasers, and error correcting coding.
Shannon's work and ATM were also helpful. And Unix,
C, and C++ remain pillars of the Internet and its
applications.

Was the Internet primarily from the start-up
entrepreneurs Cruz seems to admire? No: The
Internet was primarily from AT&T Bell Labs and ARPA.

The idea that monopolies and big government don't
innovate stands contradicted.

The regulated monopoly that did the black, dial desk
phone also was by far the single, most important
contributor of crucial innovation of the Internet.

Sorry, Senator Cruz: Sometimes monopolies do
innovate. With high irony, the innovation you so
admire, the Internet, was heavily from just the
regulated monopoly you said "froze everything in
place". And for much of the rest of the innovation
for the Internet, that was not from entrepreneurs,
either, but from one of the biggest government
agencies of all, the US DoD and its ARPA.

Of course Senator Cruz is fully correct about the
importance of the Internet and its crucial
innovation. And he is correct that sometimes big
government makes a big mess. And, of course, in
just what we do about network neutrality we should
be very careful.

Still, the lion's share of the crucial innovation
for the Internet came from just the regulated
monopoly, AT&T, that Senator Cruz claimed "froze
everything in place".

Senator, that was a super, fat softball pitch you
threw, and it was even embarrassingly easy to knock
it into orbit: We're talking at least one Nobel
Prize and top, crown jewels of civilization,
Senator! The transistor! Optical fibers and solid
state lasers! Error corrective coding! Don't look
for better.

Senator, these are very important subjects, and we
very much need to have the record set straight, but,
please, it's no fun to totally humiliate you this
way. We only have 100 Senators, and we need each of
you to be fully well informed.

Senator, you have now had your introductory lecture
in "The History of Innovation 101". Hope you
enjoyed it and, for the sake of all of us, learned
something valuable. Now, let's be careful on
innovation, the Internet, and network neutrality.