May on Wu: No to 1968

by on February 14, 2007

At the risk of making TLF the “All Wu All the TIme” blog, I wanted to pass on Randy May’s just-released commentary on Tim Wu’s wireless paper. May–president of the Free State Foundation in Maryland–focuses particularly on Wu’s support of a “Carterfone” rule for wireless. May’s reaction to this? “Back to 1968, No Way!”. (Bringing to mind mental images of Chicago police rounding up protesting free-market economists on the street…)

May provides some valuable perspective, contrasting the static Bell System monopoly that spawned Carterfone and the constantly-changing wireless industry of today:

“Just consider these differences. In touting the Carterfone model, Professor Wu refers to “the ability to build a device to a standardized network interface (the phone plug, known as an RJ-11)” as giving birth to a new equipment market. Obviously, at that time, the ubiquitous Bell System analog network was mostly standardized from a technical point of view. The network carried almost exclusively a subscriber’s own content. The network had been stable for decades and remained largely so. In this context, it was much easier to legislate standardization in regulations. Contrast this with today’s technologically-dynamic environment with multiple networks, changing rapidly, and carrying various applications, inclusing many with content that must be protected from piracy. The type of standardization that inherently is part and parcel of network neutrality regulation simply does not make sense today. It would stifle innovation and investment, rather than promote it.”

I’m not sure I’m willing to say that more standardization would not be a good thing for wireless. Nevertheless, May’s point is a good one–2007 is not 1968, and wireless is not Ma Bell.

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