September 30th, 2012

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When questions don't make sense

Was rereading Jhegallah and one of the things that comes up is that Vlad, our hero, keeps being asked questions that don't make any sense. The reason they don't make sense is because the question pre-supposes a framework that is not merely not shared by Vlad, but is absolutely contrary to Vlad's framework.

I could not help but thinking about this in the spectrum context. Particularly with the extremely popular question: "What's the business model for WiFi?" By which they actually mean: "what's the business model for enhanced unlicensed access."

The problem is that this conceives a framework that makes no sense. It imagines that there must be a Verizon-like entity that will invest and be pointed to as the "business model." After all, that is the business model for licensed spectrum. What is the equivalent for unlicensed? And there isn't.

Unlicensed access is an enabler of economic activity, not an activity in itself. in this way, it is somewhat comparable to the TCP/IP protocol suite. Equipment manufacturers make equipment for people/enterprises which then use them in a variety of ways. But there is no "business model" for "wifi" (or "unlicensed spectrum") in the sense that there is a "business model" for licensed spectrum.

There is language in economics to describe this, and its value. But the people asking the question are not generally economists and don't really understand economics. they are usually policy guys or business analysts. This does not preclude understanding. But they come from the wireless world. They expect to see a Verizon or an AT&T, and the absence of such a critter makes them question why unlicensed spectrum has value. Alternatively, if it has value, why shouldn't people pay for it? The fact that if you created an artificial scarcity for the purpose of making people pay for it this would destroy the value also takes considerable explanation.