It's very early in the morning on the first day of spring break so this is going to be fragmentary at best but I hope not completely incoherent.
The idea of a spectrum with the organizations of Bell Telephone era AT&T* and Facebook representing, if not polar opposites, at least very different positions is interesting because it brings up the questions of why and how they functioned and what is between them in this range.
If we look at communication/transportation as a company theme, Bell Telephone was somewhat akin to the railroads structurally. They built their own infrastructure and controlled all aspects of its use. In the case of Bell, the switching infrastructure was a primary value. In that sense, a railroad might be slightly toward the internet end of the range since tracks are somewhat agnostic about their use except that two trains can't use them in opposite directions.
By contrast, internet entities rely on an existing infrastructure. It is a common good that they did not create but they cannot keep others from using. This gives them less interest in preserving the overall system. (One can argue that Facebook attempts to make the internet proprietary, locking users into their system, for instance.)
The internet gives new players an interest in changing what's happening on the ends of the communication so the relatively neutral nature of the system promotes change while the Bell system provided an incentive to preserve complex switching by not allowing anyone to play with the ends. That preserved the American telephone system for a long time and it ultimately doomed it.
What's in between? Maybe FedEx? They rely on a shared infrastructure of airports, air traffic control, highways, etc. but have to deal with the stuff in between more than an internet company but perhaps less than a railroad and definitely less than Bell Telephone. That gives their business range more of an incentive to basic change that monopoly telephone companies have/had but less than internet companies. I'm not sure where cell phone providers fall relative to delivery companies. I suppose more toward the Bell end of things.
That's as far as I can think on a Saturday morning. I'm going to stop yammering and leave this to anyone who actually knows something about this stuff. (I assume that there's someone on this list who knows something about pretty much any subject I could name.)
But before I sign off, a quibble with a quibble: I think Ken is distorting Rosan's intent. She didn't say that Bell Labs was vertically integrated. She said that it "represented" a "vertically integrated model" and the Silicon Valley (as opposed to Facebook per se) represents a "distributed model" and she points out that nothing is absolutely one or the other. I would also, perhaps, argue with her terminology but her point was worth teasing out in a perhaps more friendly manner.
*The AT&T company went through some fundamental changes and then the identity was essentially sold off (to people who then went on to destroy one of the company's biggest assets--the Saul Bass logo) so the current AT&T has just about nothing to do with this discussion.
Gunnar
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Gunnar Swanson
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On Mar 3, 2012, at 5:17 AM, Ken Friedman wrote:
> it’s incorrect to say that Bell Labs was
> vertically integrated. Vertical integration involves the integration of
> different parts of a value chain from supplies to production or
> production to distribution.
[snip]
> While Bell Labs solved problems for AT&T or Western Electric in the way
> that R&D divisions do, Bell Labs was not part of the normal AT&T supply
> chain. The fact that AT&T owned Bell Labs did not make it a vertically
> integrated part of the company.
[snip]
> But neither does Facebook use a distributed model. It is a wholly owned
> private corporation.
> Rosan Chow wrote:
>> organizationally, Bell Labs
>> represented the ‘vertically integrated model’ and the silicon valley
>> in which Facebook is a node, represents a ‘distributed model’. Both
>> rely on collaboration among many different actors: creative and talented
>> and dedicated individuals, capitals, and different kinds of
>> organizations. But as others might know, most (if not all) companies
>> lean toward one model or the other depending on their strategies at
>> different times. And no company is ever PURELY integrated or
>> distributed. These are conceptual distinctions that provide clear cut
>> clarity but practices are messy.
>>
>> So the forth time: I suggest not to polarize Bell Labs and Facebook!
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