Titanic, iPhones, and Spectrum …

It’s good to see Dr. Higgs get mentioned in the Forbes piece. A couple very interesting related reads.

What Do The Titanic And Your Smartphone Have In Common? – Forbes: In this case, however, government ownership and allocation has led to decades of mini-tragedies through the gross mismanagement of this vital platform for communications and commerce. It has let FCC bureaucrats substitute their will for free markets and entrepreneurial experimentation, all in the name of managing spectrum scarcity. But it’s the agency’s own rules on the scope and nature of each license that may in fact be the biggest producer of scarcity. The FCC’s command-and-control model of regulation resulted in the rigid “zoning” of spectrum. To this day, the rules keep innovators from using the spectrum flexibly or rededicating it to different, perhaps more effective uses. In essence, an FCC spectrum license says that you may do X, and only X, with that spectrum allocation — even when the market might cry out for something different.


Gravitational Shift in the Telecom and Wireless Markets – Barrons.com: Then Apple blew out the doors with Steve Jobs’ iPhone in 2007. The iPhone did more than sell phenomenally well. It funneled phone-company subscribers directly to Apple for software (the App Store) and content (iTunes). At Apple, where the iPad’s 2010 introduction ignited yet another industry disruption, the strategy has been to extract cash from carriers for the privilege of selling its devices. Google soon entered the fray with Android, a smartphone operating system license—without direct cash payment—to handset vendors. This builds (or protects) audiences for Google’s “intention-based advertising” platform. In just four years, Android became the world’s leading smartphone software platform. These new ecosystems are not technically beyond the mobile carriers’ control; Sprint could refuse to ante up for Apple’s iPhone, or it could block Android devices. But consumers love this stuff. If Sprint holds out, its rivals feast.