From Hobby to Industry

Tim Wu's book The Master Switch was reviewed in the New York Times.

Shortly after the United States developed the first atomic bomb, J. Robert Oppenheimer realized the country would need a new kind of weapons laboratory. This lab would maintain and improve the military’s arsenal rather than create new weapons. It would be called Sandia National Laboratories and placed not far from Los Alamos.

Initially, the University of California ran the lab, but President Truman soon decided to transfer its operation to the entity he thought could best run it during the nascent cold war: AT&T. “In my opinion,” Truman wrote to an AT&T subsidiary in 1949, “you have here an opportunity to render an exceptional service in the national interest.” AT&T ended up running Sandia until the early 1990s.

It was one of the more extraordinary instances of Ma Bell’s involvement with Uncle Sam. The company owed its very existence to a favorable federal patent ruling in 1878, which saved it from an early death at the hands of Western Union, the dominant telegraph company then trying to crush its new rival. A little more than a century later, Washington broke up AT&T. But regulators soon allowed many of the company’s parts to merge back together. This consolidation, Tim Wu argues in The Master Switch, probably allowed the Bush administration to conduct its wiretapping program in secret for so long.