Spectrum of Greed

Just a few short months ago, a group of misty eyed cellular phone trail blazers and their adoring hangers-on gathered in Chicago to celebrate the start of an institution that is at least ten years beyond its expiration date.  In the good old days before the portable phone,  the concept of a technology called the internet was barely on the horizon.  Cellular was born of the traditional land line phone and the radio hand set. People needed to communicate while they were on the move, and cellular was a giant step in the right direction.

Today the land line equivalent of cellular, the TDM phone system, has achieved has-been status, obliterated by VoIP.  It took several years for IP technology to make a dent in the traditional marketplace, and it was resisted tooth and nail by the established market until the very end, but eventually all the vendors that wanted to remain in the business were forced to don the IP garb and talk the talk of packets and Unified Communications.  They were forced to join them after they couldn’t beat them because the price performance, integration and flexibility of the new technology  could not be duplicated with the old.  Granted, TDM technology was around for 40 years before it was replaced, but our world is moving faster now, not slower.

But look beyond the simple replacement of in-business phone systems, to what has evolved from VoIP - skype, call centers in India, voice and video conferencing available to everyone, not just those with $40,000 or more to invest in specialized equipment and hundreds of dollars a month for ISDN phone lines.  The innovations that have come about didn’t start with the traditional phone companies, they started with small start up innovators with disruptive technologies, who eventually had such an impact that the incumbent players in the market had to adopt.

Now let’s go back to our cellular celebration.  25 years of tradition, unhampered by progress, because here, the  FCC has managed the wireless space by allowing only a small number of companies to participate, and even when the occasional new frequency range becomes available, they sell it to those that are already in the market.  In this closed ecosystem, disruptive technologies have to be invited in, they can’t just start on their own.

But the traditional phone system is not alone in needing outsiders for disruptive innovation.  Western Union did not create the phone - Alexander Bell tried to sell it to them, but they scoffed at him, so he did it himself.  Sony invented the walkman, but in the transition from tape to digital, they missed the boat, and the iPod was the final survivor after several other innovators paved the way.  With video, music and other media, this need for external innovation continues.

Why does Larry Lessig think that the FCC’s DNA is wrong?  Because the FCC is striving for stability, the way any mature company in a mature industry should.  Once an infrastructure has become viable, it needs to be stable, reliable, and cost effective.  These are not the traits of innovation.  Yes, there is a place for stability, though to look around our country today, you might be hard pressed to identify any of those places.  Tech dirt makes a good point about YouTube being more than just taking the last technology (TV - Movies) and moving them to the web, like a hulu.com.  YouTube is a disruptive innovation - it takes an entirely new form, and because of this, it has much more potential than it’s previous generation.

This is how we need to see wireless internet.  This isn’t the offspring of a phone and a radio, but it is still being treated that way.  We need to open this market up so that some real innovation can occur, some real jobs get created, and some real wealth can be added to the GDP of this country.