The Unregulated Infobahn

Jobs & Capital, Vol. 4, pp. 28-32, Summer 1995

5 Pages Posted: 28 Mar 2007

See all articles by Robert W. Crandall

Robert W. Crandall

Brookings Institution; AEI-Brookings Joint Center for Regulatory Studies

J. Gregory Sidak

Criterion Economics, L.L.C.


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 symbols—the 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 As a corollary of this analysis, one may not assume that a system that is viable in 1995 will not be superseded by a superior technology introduced only a few years later.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.

Suggested Citation

Crandall, Robert and Sidak, J. Gregory, The Unregulated Infobahn. Jobs & Capital, Vol. 4, pp. 28-32, Summer 1995. Available at SSRN:

Robert Crandall

Brookings Institution ( email )

1775 Massachusetts Ave. NW
Washington, DC 20036-2188
United States
202-797-6291 (Phone)
202-797-6181 (Fax)

AEI-Brookings Joint Center for Regulatory Studies

1150 17th Street, N.W.
Washington, DC 20036
United States

J. Gregory Sidak (Contact Author)

Criterion Economics, L.L.C. ( email )

1717 K Street, N.W.
Washington, DC 20006
United States
(202) 518-5121 (Phone)


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