The free market is a wonderful thing. On a good day the forces of capitalism can drive down prices, keep innovation chugging along, and generally make the world a better place. On a bad day however, precisely the opposite can happen.
We're seeing a classic example of market misbehaviour right now in the Ultrawideband world — UWB combines very high data transfer speeds with very low power over short distances. It is expected to make its commercial debut in consumer equipment such as set-top boxes, high definition TVs and portable music systems
But according to Cambridge professor and networking expert Andy Hopper, a UWB 'standards war' has broken out between small companies who want to see the technology develop as soon as possible and a cabal of large, established vendors who are keen to protect their status quo from a potentially disruptive technology.
The crux of this row is that UWB — which could be worth £4bn to the UK — uses a wide swath of the radio spectrum. Some 3G operators claims that UWB will disrupt their services (there's a figure of £1bn worth of damage floating around) while the UWB crowd point out that the technology's been operating in the US for some time with little evidence of interference.
It's Ofcom's job to weigh up the claims, counterclaims and propaganda and do the best thing for the UK. Ofcom is leaning towards the view that UWB products in the UK will need to obey tighter power limitations than in the US. Those in the know insist that this 'mask' could work, and help Britain to generate billions of pounds of value from UWB, but nothing's been decided for sure
Ofcom talks a good game, with its vision of freeing up bandwidth and letting the market decide what services work best. But the UWB mess is a perfect example of how an uneasy alliance between regulators and the private sector can go wrong.
Rather than allowing the issue to descend into bickering and delaying tactics, Ofcom should implement large-scale field trials to assess whether UWB does cause any problems to existing service operators, and to find solutions if needed. Free markets are a nice idea, but often a lousy reality.
Talkback
Actually, I think this is really a case of large companies trying to protect turf they don't own. While they have every right to make sure that their products and services are not interfered with, they made use of spectrum knowing that there would be a mandated threshold of unintentional noise from existing products. Given that UWB devices in the U.S. actually emit less energy than unintentional emissions allowed by law (FCC class B), the argument to do wide scale testing doesn't hold water. The radio will generated less noise than the device that operates it does. The only assumption that would make this a rational approach is if the original rules on unintentional emissions disregarded wide scale adoption of consumer devices, which it did not.
This article is completely off-base and portraits more of a pro-socialist political rant than a critical review of UWB.
The success or failure of UWB by use of spectrum has little to do with free markets or capitalism. In fact, the main premise of UWB is devoid of private property, which are at the core of any true free market scenario.
If anything, you could arguably consider UWB a massive tragedy of the commons experiment - not a market failure.
Free markets are only failures when governments intervene and add regulatory distortions, not the lack thereof.