Intelligence, creativity, education and wisdom are resources in short supply.
Therefore we must make them available cautiously and conservatively, lest we squander these valuable resources.
Right? Wrong! Intelligence, creativity, education and wisdom are not limited resources...they are potentially limitless resources.
The more you make available to a receptive populace, the the more you get back.
The more you withhold, the less you will have in the future.
Monopolists who managed to corner the market on "smarts" might benefit from knowledge-rationing, but the rest of us would not.
If I understand him, David Reed argues that the FCC's current policies on spectrum rationing are ill-conceived in precisely this way.
...if my technical argument about how value is created in radio networks by user financed investment is correct, then by selling spectrum rights to private holders for all time at any finite price, the government is not encouraging capital investment in the economic development of a resource (the usual argument for privatization.) Instead, it is selling out the future value of a resource best developed by individual citizen/users to a group of arbitrageurs -- whose best payoff is achieved by making no investment at all, while waiting until the public has to buy it back at a guaranteed substantial premium.
In the early part of the 20th century, the idea of allocating radio by bands allocated to fixed services made sense, for several reasons. ...
In the early part of the 21st century we face a very different, evolving, and unpredictable set of demands for radio communications, and we have learned a great deal about the implementation of radio systems and networked systems in the last decade or two.
My argument is based on a simple but crucially important technical fact: the useful economic value in a communications system architecture does not inhere in some abstract ìetherî that can be allocated by dividing it into disjoint frequency bands and coverage areas.[2] Instead it is created largely by the system design choices...
...there exist networked architectures whose utility increases with the density of independent terminals (terminals are end-points, such as cellular telephones, TV sets, wireless mobile PDAs, consumer electronic devices in the home, etc.) Network architectures provide tremendous gain in communications efficiency on a systems basis ñ I call this cooperation gain, because it arises out of cooperative strategies among the various terminals and other elements in a networked system.
... in the not-too-distant future, all radio systems will be based on digital signal processing, and thus will approach ìCognitive Radioî capability. By cooperatively sensing and manipulating their electromagnetic environment, a network of software defined radio transceivers can adapt to their physical environment to match demand much closer to the capacity achievable by joint action of a group of radios.
This is new territory ñ not explored by existing theories of regulation.
The best example in recent history of such a system has been the Internet, yet it has two crucial constraints that the new radio technologies donít: need for cable deployed along rights of way, and a fixed switching infrastructure built around statically deployed cable terminations.
The combination of the decline in cost of individual radio elements, coupled with the desirability of building these systems on a pay- as-you-need-to basis suggests that most, if not all, of the capital cost involved in building these networks will be user-financed. That is, the users will buy the equipment and software that they need to build the networks as they need capacity. Where these radio networks interconnect with networks that have a high fixed-cost (such as wired networks), arrangements for carriage can be financed by charging for ìrightsî to transfer messages between wireless and wired networks.
A key aspect of the new demand is that the systems can and will be largely ìuser financedî unless regulation bars users from deploying new technology. The bulk of capital expenditure in networked systems, especially systems that need no cables or optical fibers will be borne by users rather than by ìnetwork operatorsî as is the case in the cellular telephone and radio/TV broadcast industry. This is an important economic benefit, because it allows for direct investment by interested parties, rather than indirect investment, connecting demand directly to supply. (In the near future, this is trivially true, because there is little available indirect investment capital for telecommunications systems, due to the well-known collapses of network operators).
We must provide strong incentives for efficient use of the shared medium by protocols that adaptively manage power and achieve significant cooperation gain. The availability of joint benefits to all users, in terms of transport capacity, transport efficiency, and various kinds of optionality, is the primary incentive, of course. A user investing in new equipment, or considering becoming a participant in a particular new network must see immediate benefits. Here the strongest incentive is likely to be the ability to interconnect with existing high-speed wired and wireless networks that have broad connectivity ñ in particular the Internet as a whole. We can use communications rate and ability to access to the full Internet as means to penalize inefficient stations. Intermediate nodes that detect a sender is transmitting with more energy than necessary can drop messages with a probability proportional to the degree of excess energy, for example.[15]
I think Reed's ideas are deep, subtle, interesting and important. They suggest for example, that not-for-profits or other organizations that are vying for "pieces of the pie" (or the proceeds) may be unwittingly ensuring that there will never be enough pie to go around. Or, to quote the computer in the movie War Games, It's an "Interesting game. The only way to win is to not play."
PostScript: David Reed replies,
Jon -Enjoyed your piece. Of course I'm going to point to it. And your point at the end about non profits seeking a piece of the auction pie, and thus helping insure scarcity, is really important - it's something I didn't mention in the filing, but is part of a policy conversation (Yochai Benkler has been trying to explain this to various foundations proposing "good works" as a tax on auction proceeds).
1:30:45 PM 
|
|
