Spectrum of Greed

As recently as a few months ago, CDMA was being touted as a “CDMA ecosystem”, to a group of developers for their BREW software at a product conference in San Diego.  That CDMA has been one of the underlying technologies responsible for Sprint and Verizon’s mobile networks is beyond dispute.  That those networks are incredible revenue creation machines and that those companies provide thousands of jobs is also indisputable.  The future of the technology is where I beg to differ with Paul Jacobs, CEO of Qualcom.  The vast majority of the world is on GSM, with WiMax being a second rapidly growing networking technology that will rapidly dwarf CDMA in all but those markets in which massive investments in the technology have already been made.  There, a return on investment must be wrung out of the technology before a replacement can even be considered.

Which brings me to the inbreeding point.  As I mentioned in a post a week or so ago, Laurence Lessig made a controversial statement about the need to shut down and replace the FCC, and by way of rationale, identified that the DNA of the FCC was terminally flawed, and could not be fixed.  Regardless of whether you believe genetic analogies are overused, I believe the fit for this analogy is, well, perfectly matched.  For, as with DNA in humans, if too much inbreeding occurs within a family, the weaker, recessive genes have a much higher probability of being expressed, and continue to weaken the genetic line.  Applying this to the economy of the wireless world, by not introducing new partners into the mix, what we are getting is a weakened gene pool, that in a Darwinian eco system, are doomed to underperform, and to only survive in a protected environment, which is why incumbents are so friendly with the FCC.

Larry has this to say regarding the DNA of the FCC:

“Economic growth requires innovation. Trouble is, Washington is practically designed to resist it. Built into the DNA of the most important agencies created to protect innovation, is an almost irresistible urge to protect the most powerful instead.

The FCC is a perfect example. Born in the 1930s, at a time when the utmost importance was put on stability, the agency has become the focal point for almost every important innovation in technology. It is the presumptive protector of the Internet, and the continued regulator of radio, TV and satellite communications. In the next decades, it could well become the default regulator for every new communications technology, including, and especially, fantastic new ways to use wireless technologies, which today carry television, radio, internet, and cellular phone signals through the air, and which may soon provide high-speed internet access on-the-go, something that Google cofounder Larry Page calls “wifi on steroids.”"

Fortunately Mr. Lessig goes further than simply lambasting the FCC in it’s present state, and recommends a solution to get us out of the monarchy malaise.  He suggests that we create a replacement organization that will recognize the changes in our economy and the increasing importance of rapid innovation to our future economic health.

“In their place, Congress should create something we could call the Innovation Environment Protection Agency (iEPA), charged with a simple founding mission: ‘minimal intervention to maximize innovation.’ The iEPA’s core purpose would be to protect innovation from its two historical enemies-excessive government favors, and excessive private monopoly power.”

Imagine if the iEPA had been in place at the beginning of 2008.  If we could replay that terrible three months in the history of American wireless annals (the auctioning of the 700Mhz from January through March 2008), we could set the stage for some real innovation to occur in 2009.  Let’s imagine that instead of selling off the most valuable spectrum that has been made available for commercial use in the last 2o years, the FCC had instead decided to provide a rapidly evolving wireless environment for entrepreneurial use.  In each major region of the country, they would retain ownership rights, but would contract with vendors to provide the broadcast infrastructure, and provide connectivity to the internet for these regional wireless networks.  Now, with a high speed last mile in place, mobile internet would be truly available for the first time, rather than only to the rich as a pricey add on to an already pricey wireless voice plan.  The highest speed connections could be paid service that could subsidize the lower connectivity speeds provided free to citizens as a basic right in the new economy.

With mobile internet truly ubiquitous throughout America, our economy would get a boost that it hasn’t seen since the freeway system was initially introduced to the country, bringing with it the biggest expansion of our economy to ever occur.  The products that could be made available to homes, businesses, vehicles, and outdoors would be limited only by American imagination and ingenuity, and those abilities are legendary throughout the world.

It’s too bad that we don’t have bigger dreamers and smaller schemers at the FCC.