Unwire the Regulators

by Don Boudreaux on July 29, 2009

in Regulation

My GMU colleague Tom Hazlett, writing in Business Week, warns against "The Misguided Urge to Regulate Wireless."

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Mcwop July 29, 2009 at 9:05 am

This is following the same dumb pattern as the Microsoft antitrust bandwagon. I hate Windows, and simply used other platforms – Mac and Linux. There is a choice out there, and at some time in the near future the iPhone will not be exclusive to AT&T.

My bigger concern is that taxes on my cell service are 9% of my bill and seem to continuously climb while my service costs are stable to decreasing, and feature set is increasing.

Seth July 29, 2009 at 12:02 pm

Innovation-killing seems to be all the rage.

Next, let's investigate how bakeries can make so readily available so many types of fresh bread to willing buyers. There has to be something devious at work.

In the words of John Stossel, gimme a break.

SheetWise July 29, 2009 at 12:15 pm

My youngest daughter wanted an iPhone. After some research — I showed her the Android, and presented it as an open-source option. She researched the upcoming G2 upgrade, and agreed it looked better. We'll get our phones this week. I don't know if it's better, or it's just better marketing — but I've looked at them both, and I like Android. And then there's the issue of contracts …

I love this game! I feel no pain when I'm charged for my phone bill. These devices bring great joy to my entire family (even though my youngest daughter is the only one who really uses all of the features).

I sincerely hope our government doesn't choose to save me from these "predators".

Sam Grove July 29, 2009 at 12:33 pm

Bureaucratic chief to minion: "Go out and find something to regulate."

dg lesvic July 29, 2009 at 1:05 pm

My God, You have Hollywood Hazlett, Larry White, Walter Williams, Cowen, yourself at GMU. What an all-star team!

Nathan July 29, 2009 at 1:12 pm

This article still fails the address how fundamentally immoral patents are.

We would certainly see less rent seeking behavior (and more competition) by Apple and AT&T if not for the government created monopolies.

Crusader July 29, 2009 at 1:24 pm

Regulate, regulate, regulate!!!

Chuck July 29, 2009 at 12:09 pm

It’s already regulated. Why do advocates of freedom always find themselves defending the mixed economy?

Rationalitate July 30, 2009 at 10:08 pm

Amen to that! This is how I feel every time I hear some “libertarian”/conservative railing against mass transit and in favor of roads. As if those were built by the free market, and mass transit systems were built by the government…

(In reality, it’s the complete opposite. Most intraurban mass transit systems in the US were built by private corporations, whereas 99% of the roads were built by the government.)

Stephen Smith July 29, 2009 at 1:21 pm

I think I’d feel a little more comfortable supporting this argument if the authors recognized the huge implicit subsidy/intervention inherent in artificially licensing the electromagnetic spectrum. Some free marketeers will try to tell you that we ought to auction it off, but don’t be fooled – nothing short of complete abandonment of spectrum regulation will actually enable the telecom industry to reach its full potential.

Too bad “open spectrum” is largely derided by libertarians as socialist. Leaving aside the fact that only a government can actually enforce the property rights of spectrum owners (sort of like IP, which your colleague Russ Roberts has so much faith in that he’s willing to call anti-IP folks Obama-worshipping socialists on EconTalk.)

David July 30, 2009 at 6:09 pm

I believe Professor Roberts has recently stated on this very blog in an Econtalk alert that he currently leans toward the abolition of IP rights.

I don’t mean to put words in his mouth- if this isn’t the case someone feel free to correct me.

Rationalitate July 30, 2009 at 10:02 pm

I don’t have time to listen to the whole podcast, but in this episode:


…he seemed very sympathetic to the author’s ideas, didn’t really press him on his very pro-IP stance on copyright, and I’m pretty sure at one point likened those who believe in the abolition of copyright to those who support Barack Obama (which I presume is the Russ Roberts equivalent of Sean Hannity yelling “socialist!” at one of his guests). I’d very much like to be proven wrong, though…

vidyohs July 29, 2009 at 6:47 pm

Stephen Smith,

As one who began his career in radio in 1959, only not the radio you know and love, but radio none-the-less, do you even have a tiny bit of comprehension of what any particular radio frequency would be like without some sort of coordinated effort to limit the radio stations broadcasting on that frequency would sound like? Can you say chaos? Say it again, chaos.

What does chaos bring to radio in the way of efficiency or enjoyment?

I know of one nation that solved the problem of overriding competition by simply making transmitters so powerful that they had no problem with worldwide communications on any particular frequency. Of course, everyone else simply waited until they were through before going on about their business.

Is that what you’re looking for, Stephen?

Nathan Scott July 30, 2009 at 1:16 pm

If someone wants to dump enough resources into the electromagnetic spectrum to dominate it (nearly impossible), that’s a completely valid means of gaining market share. Stronger radio signals and lower profit margins would be the chief result. It is in this companies interest to have a wide range of stations on the market so people don’t simply turn to alternatives like satellite or ipods. I don’t see the inherent “chaos” you seem so scared of. What about the chaos in food distribution?

As an Electrical Engineer, I’ve taken signals processing, and AM and FM are only on the edge of what’s possible with radio transmission. Ever more ranges and types of frequencies make it impossible for one company to broadcast over every form of signal. Radio has come a long way since 1959, and it would be moving a lot faster without government regulation.

We have real world examples of this. Somalia, a nation with no government, has the most developed cell phone network in Africa. Why? It’s not in the interest of business there to interfere with each other, and to purposely do so would cost more resources than ever would be economically viable.

Rationalitate July 30, 2009 at 10:06 pm

You shouldn’t be so condescending – it makes you look very silly when you’re proven wrong. I’d recommend this article which explains what exactly interference is and why it’s not as cut-and-dry as the FCC makes it out to be. Or, if you’re in a hurry and would rather not read that long thing (though I highly recommend it), I excerpted what I felt were the most important parts in my blog

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