Monday, 26 March 2012

No Wi-Fi

"This story does not have a simplistically libertarian regulation bad/deregulation good moral... There are better ways to regulate and there are worse ways to regulate."
Kevin D.Williamson in a piece at National Review on the supposed significance of a "no wi-fi" sign he saw in a coffee shop.

It's an interesting read, but his seemingly off-hand caricature of the free-market position as dogmatic opposition to regulation per se rankles. That there may be rational grounds for certain kinds of regulatory protocols is trivially true, but the principled free-market case is not that such protocols should not exist, but that it is preferable for them to be produced on voluntary terms such that compliance with them is facilitated through the incentives of the market.

In the specific case to which Williamson is referring (the Federal Communications Commission's 1985 decision to allow unlicensed use of the radio wave spectrum by "low-powered" devices), the critical point is that it was initially feared that unlicensed use by such low-powered devices would lead to common signal interference with other radio communications. Yet it turned out that such interference could be prevented by the imposition of frequency and wavelength parameters. Hence the FCC's decision to allow unlicensed use of the radio spectrum by low-end devices within those parameters to avoid common signal interference - and hence today's (almost) ubiquitous wireless internet.

Yet it is not clear to me why such a regulatory agreement could not have emerged on a purely voluntary basis. Of course, as Williamson says, some radio stations wanted to see unlicensed use prevented in order to stymie future competition, but this is no reason why voluntary arrangements could not have been made, but is instead merely a good example of rent-seeking behaviour made possible by government.

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