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Reason Foundation

Of "Overhype" and bad telecom policy

Adrian Moore
February 4, 2007, 5:10pm

Tom Hazlett, as always, writes a witty and spot-on commentary on U.S. floundering on telecom policy in the Financial Times. Some juicy bits.
Our buzz-coloured shades block out key drivers of innovation. Take wireless. While 2.5bn people were subscribing to mobile networks, the tech spotlight was on ... WiFi. While a handy way to make a DSL connection cordless, the disruptive technology claims – that the exclusive rights used for wide area cellular networks were now eclipsed by unlicensed spectrum governed by power limits and regulatory standards – were wrong. Not many folks dropping their mobile subscription to talk from their "hotspot." Yet US regulators, focusing on the WiFi "commons," let most of a decade slip away before auctioning 3G licenses in 2006. Not only did this stunt the growth of wireless networks, it now sets the stage for vast bandwidth to be wasted in the TV Band. There policymakers are pushing to expand unlicensed spectrum allocations, when the evidence is compelling that opportunity costs far outweigh benefits. In India, meanwhile, recent deregulatory moves have produced intense cellular competition.
. . .
The point is not that "closed" beats "open," but that capitalism accommodates both. Rules need not be changed to embrace the revolution. Markets thrust revolutions upon us, boldly and magnificently, far more often than we care to remember.

Adrian Moore is Vice President, Policy


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