The more things change, well, the more things change.
Google’s Android – the newcomer in the Darwinian market for mobile operating systems just two years ago – has leapt past both RIM’s Blackberry OS and Apple’s iPhone OS to take the lead as the most-used platform for smartphones in the United States.
That’s a stunning commentary on the ferocity of competition in the wireless space; it also offers a cautionary tale about the risks of regulating in the hopes of leveling the proverbial playing field in markets for digital technology. As Bob Hahn and Hal Singer put it in Why the iPhone Won’t Last Forever: “New technologies often seemingly emerge from nowhere, but also frequently lose their luster quickly.”
This, alas, is a lesson easily forgotten. Washington is now abuzz with proposals for regulatory interventions designed to give some companies a leg up in various niches of the wireless market at the expense of rivals. No doubt, the FCC’s upcoming report on competition in wireless will provide fodder for such pleadings, even though the ascent of Android (and similar tales from the annals of Silicon Valley) ought to remind us that today’s 90-pound-weaklings may be kicking sand in the faces of digital bullies in the time it takes to download the Godfather trilogy from Amazon. And that churn is typically traceable to the ingenuity and nimbleness of upstarts in an open marketplace — not the inclination of regulators to call balls and strikes.
The most benign explanation for the regulatory amnesia is that big innovations can radically change the business pecking order, inevitably undermining somebody’s idea of equity and fostering new demands to put things right (or at least back where they were).
Some wireless companies are already seeking rules that would allow them to avoid big capital outlays to build networks in rural areas, while others want regulators to deny their competitors access to more spectrum for expanding broadband capacity. The FCC’s next wireless competition report may hint at whether and how the Commission wants to play ump. If you ask us (please…), this would be a good time for the FCC to show some humility as the current pro-competition, pro-investment, pro-innovation trend plays out.