The global village and the madness of e-crowds

THE GLOBAL VILLAGE AND THE MADNESS OF THE E-CROWDS
[SOURCE: Financial Times, AUTHOR: Thomas W. Hazlett]
[Commenary] Today’s buzz is You, whom Time Magazine honored as “Person of the Year” for igniting “community and collaboration on a scale never seen before.” Your blog entries and social networking posts rock. Meanwhile, you’re revolutionizing Information Technology markets with far-flung innovations in open-source hardware and software. Soon governments will tumble and the meek shall inherit every entry in Wikipedia, A-Z. Overhype about the emerging markets is good clean fun when confined to mindless text-messaging. There is an undeniable “wow” factor. But there is also a madness to the e-crowd. Whenever a trend is spotted that captures the fancy of the zeitgeist, it is formulated as a linear trajectory, and shot into orbit. All cross traffic is banned. Call it “asymmetric triumphalism.” Yes, the dramatic lowering of distribution costs allows information to travel on a budget. That is an oomph for markets, and perhaps a double-oomph for democracy. But there’s more. Never have so many, owed so much, for so few user names and passwords. Our buzz-colored shades block out key drivers of innovation. Take wireless. While 2.5bn people were subscribing to mobile networks, the tech spotlight was on … WiFi. While a handy way to make a DSL connection cordless, the disruptive technology claims ­ that the exclusive rights used for wide area cellular networks were now eclipsed by unlicensed spectrum governed by power limits and regulatory standards ­ were wrong. Not many folks dropping their mobile subscription to talk from their “hotspot.” Yet US regulators, focusing on the WiFi “commons,” let most of a decade slip away before auctioning 3G licenses in 2006. Not only did this stunt the growth of wireless networks, it now sets the stage for vast bandwidth to be wasted in the TV Band. There policymakers are pushing to expand unlicensed spectrum allocations, when the evidence is compelling that opportunity costs far outweigh benefits. The point is not that “closed” beats “open,” but that capitalism accommodates both. Rules need not be changed to embrace the revolution. Markets thrust revolutions upon us, boldly and magnificently, far more often than we care to remember.
http://www.ft.com/cms/s/ee544356-b522-11db-a5a5-0000779e2340.html
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