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Monday, August 19, 2013

If You Remember 'Peak Oil' And 'Peak Wireless Spectrum,' You're Laughing Now

As reported by Forbes: What do the wireless radio spectrum and fossil fuels have in common? Both were repeatedly predicted to run out. But both have kept growing thanks to continuous innovation.

The Wireless Crisis that Never Happened
Technology Review noted in November 2012 that just two years earlier, the U.S. Federal Communications Commission chairman and AT&T executives saw a looming crisis: wireless was running out of spectrum. Examples included the servicing of sports events and stadium concerts where thousands of photos were being snapped, videos recorded, and emails/texts sent. But while the FCC and AT&T weren't looking, short-range Wi-Fi stations came to the rescue, operating in unlicensed parts of the radio spectrum. Wi-Fi enabled much of that traffic to move over high-capacity land lines, completely bypassing the precious wireless spectrum. Additionally coming to the rescue were smart new devices that sense available frequencies and shift between them to avoid interfering with other devices (see, for example, en.wikipedia.org/wiki/Cognitive_radio). AT&T now acknowledges that the crisis never happened.

Ironically, bandwidth scarcity is created – artificially – by the very FCC policies that were designed to efficiently allocate it. Airwaves reserved for TV stations and federal agencies still go unused, according to Tech Review. Fixed allocations cannot keep up with innovation, and no one can reliably predict in which directions and along what paths technology will evolve. According to a 2007 report of the International Telecommunication Union and the World Bank, “…past and current regulatory practices have delayed the introduction and growth of beneficial technologies and services or have artificially increased costs. As a result, there is a renewed emphasis on … more light-handed market-based regulation.” That’s good. Microsoft’s Spectrum Observatory monitors which frequencies are being wasted by such regulations. Among their goals is extending the success of unregulated short-range Wi-Fi to wider-area broadband parts of the spectrum.

From Massive Shortage to Oil Independence
Similarly, as recently as 2010, the U.S. military warned of massive oil shortages by 2015. The U.S. Joint Forces Command warned that “by 2012, surplus oil production capacity could entirely disappear, and as early as 2015, the shortfall in output could reach nearly 10 million barrels per day.”

Somehow their intelligence missed hydraulic fracturing (fracking) and horizontal drilling of shale, which in recent years have opened up many previously unprofitable oil and gas reserves. As a result, shale went from supplying 1% of U.S. natural gas in 2000 to 25% in 2011, according to the National Center for Public Policy Research. North Dakota has gone from being a minor producer of oil to second only to Texas, surpassing Alaska. The U.S. is now expected to halve its reliance on imported oil by the end of this decade and could end it completely by 2035, some analysts say.

These game-changing innovations in radio spectrum capacity and oil and natural gas production have occurred in relatively unregulated segments of their respective industries. In the case of wireless, as mentioned above, the innovations are in unlicensed parts of the spectrum and in the devices themselves. In oil and gas, fracking is regulated more by the states, less by the Environmental Protection Agency. Individual states can be sensitive to intra-state variations in geology and hydrology of shale formations, in contrast to EPA one-size-fits-all regulations.

Trust in Freedom
FCC predictions about wireless and U.S. military predictions about fossil fuels went wrong very quickly. Both organizations flinched. They lost faith in free markets to broadcast demand and create incentives through rising and falling prices; and in free people to respond to those incentives to address shortage and scarcity. Julian Simon recognized this responsiveness in his 1981 book, The Ultimate Resource, which refers to human ingenuity to explore, discover, recycle, economize, and develop substitutes. Two new books update these ideas. The Infinite Resource: The Power of Ideas on a Finite Planet, by Ramez Naam, is more intimate, polished, and carefully reasoned. Infinite Progress: How the Internet and Technology Will End Ignorance, Disease, Poverty, Hunger and War, by Byron Reese, is the faster, lighter, more dramatic read. Both books chronicle advances in quality of life that only free people can produce.

Be wary of predictions about complex systems such as technology and natural resources. Trust in innovation and free markets.