The Unregulated Infobahn
Jobs & Capital, Vol. 4, pp. 28-32, Summer 1995
5 Pages Posted: 28 Mar 2007
Within the Washington telecommunications community there is a familiar wisecrack: "What this industry needs is a whole new set of clichés." The quip speaks volumes about the tendency of debates over regulation and competition policy to progress to an advanced state before someone asks whether the emperor is wearing any clothes. One frequently observes a fatuous manipulation of symbolsthe leading one being the "Information Superhighway"that is devoid of any underlying analysis of substantive economic or legal issues. In our own attempt to update the standard clichés, we will borrow Wired's new term: the Infobahn. Although it is unclear to many what the Infobahn is or will be, this uncertainty has not prevented proposals from being made to regulate it.
The problem is that no one currently knows which system or systems will be technologically and financially viable in the foreseeable future. Although it is regularly reported in the business press that a "convergence" of telecommunications technologies is occurring, it may actually be the case that a divergence of such technologies is occurring, in the sense that a number of alternative architectures simultaneously may evolve for delivering various combinations of narrowband and interactive broadband services. As a corollary of this analysis, one may not assume that a system that is viable in 1995 will not be superseded by a superior technology introduced only a few years later. Consequently, government policy in this arena must proceed cautiously, lest it impede the process by which superior production technologies displace inferior ones. In particular, policymakers should not overlook the potential competitive significance of wireless networks.
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