Imagine Roads Like WiFi Networks

I finally made the switch from Verizon to T-Mobile. I had been tempted for a long time, had gotten the final push last year, and finally I found the phone and opportunity that I wanted. I had heard all sorts of horror stories about T-Mobile, but with the amount of talking on the phone I actually do, it's perfectly fine if they work only 30% of the time. [Note: they have been extremely reliable, so far, and none of the horror scenarios I heard about actually came to bear.]

I came to think about the Verizon ads and how much their marketing department pushes the fact they have the best network. I guess I have to concede that point, Verizon has always been good to me from a coverage perspective, and only in Hawaii would calls get dropped frequently.

Then I wondered: why isn't building the wireless infrastructure a task for society to undertake? Why do we have every company that wants to provide wireless service start from scratch, building a whole network that covers the entire nation?

The situation is similar to that in railroads: the government didn't build them, it left the task to the Stanfords and J.P. Morgans. It gave each railroad company a monopoly over a specific route and let the company build the railroad and set prices for transportation.

When paved roads for cars came along, the government chose a different route: roads were built by government entities and were free. Of course, this difference over time destroyed railroads. In return, it gave us splendid roads, highways, and freeways.

In wireless networks, the situation is slightly different again: the government monopoly is not for a location or route, but for a band of the wireless spectrum. This means that we have many networks in the same location. To make things completely annoying, most networks are perfectly incompatible with each other. There are two major technologies (GSM and CDMA), different bands of the spectrum, and even when the technologies are compatible, the providers do their best to prevent interoperability.

Let's see how that translates to the road vs. railroad analogy.

If roads were like the wireless infrastructure, we'd have:

• Several roads built side by side and paralleling each other where most cars drive; where few cars want to drive, there would be no roads
• Subscriptions to a particular type of road. If your type of road does not exist in a particular location, you wouldn't be allowed (or able) to use that of a different road carrier
• Flashy cars that work only on one particular kind of road. They could work on a different type, but the manufacturer has a deal with the road carrier to prevent that from happening
• As long as you drive your car or leave it parked, everything is fine. As soon as you want to use it to haul a trailer, you have to pay whatever price your company demands, regardless of the fact it didn't tell you how much it would cost ahead of time (SMS and Internet pricing)
• You'd only be able to buy a car the road carrier approves of. Any road carrier can declare a car unfit for its road network

Of course, roads don't work that way. You can take any vehicle on a public road, with certain limitations, because all vehicle produced suffice the requirements of the road. You don't see parallel roads that go from one place to another - if the traffic is bad enough, you see one wider road.

So, why did we switch from a private enterprise system to a public infrastructure system, only to switch back to the private enterprise system? Why private railroads (a failure), then public roads (a success), then private wireless infrastructure?

Imagine a different setup: a public organization is responsible for building the wireless infrastructure. Instead of dealing directly with 300 million customers, it wholesales the infrastructure to private companies that offer whatever they like. You can get the "traditional" 2-year deal with free phone from one, and a different a-la-carte system from a different company.

How is that better? For one, the cost of setting up wireless infrastructure is much higher in the current system. We have the same place covered by multiple networks, and that's invariably more expensive than a single network.

Then, since there are more resources available in the first place, coverage could be much better for everybody. There would be fewer dead spots, because it would be cheaper to cover them.

Additionally, since voters ultimately run the infrastructure carriers, there is much more direct involvement in investment. Right now, if your carrier doesn't feel the desire to invest in a 4G network, your only option is to walk to a different carrier, which means you have to get a new phone, subscription, etc.

But isn't this socialist? No, in multiple ways:

1. The common infrastructure wouldn't prevent a private party from building its own network. It just wouldn't happen because the capital investment (and risk) are the biggest part of the problem
2. Allowing companies to make a profit by offering the best packages with the wholesale infrastructure is very much capitalism at work. It's like shipping companies on the road, or restaurants at the road side
3. The whole point of free markets is freedom. That's why they are called free markets. If you need several hundred million dollars to enter the stage, there is no freedom. That's evidenced quite visibly by the current state of wireless in this Nation