You're probably reading this on junk. And I'm not talking about newsprint - industry woes aside, that's high-quality stuff. But if you're on a computer or an iPad, and you're not plugged into an Internet jack in the wall? Junk, then.
But it's not your MacBook or your tablet that's so crummy. It's the spectrum it's using.
Spectrum, in the words of FCC Chairman Julius Genachowski, is the economy's "invisible infrastructure." It's the interstate system for information that travels wirelessly. It's how you get radio in your car, service on your cellphone and satellite to your television. It's also how you get WiFi.
But not all spectrum is created equal. "Beachfront spectrum" is like a well-paved road. Lots of information can travel long distances on it without losing much data. But not all spectrum is so valuable.
In 1985, there was a slice of spectrum that was too crummy for anyone to want. It was so weak that the radiation that microwaves emit could mess with it. So the government released it to the public. As long as whatever you were doing didn't interfere with what anyone else was doing, you could build on that spectrum. That's how we got garage-door openers and cordless phones. Because the information didn't have to travel far, the junk spectrum was good enough. Later on, that same section of junk spectrum became the home for WiFi - a crucial, multibillion-dollar industry. A platform for massive technological innovation. A huge increase in quality of life.
There's a lesson in that: Spectrum is really, really important. And not always in ways that we can predict in advance. Making sure that spectrum is used well is no less important than making sure our highways are used well: If the Beltway were reserved for horses, Washington would not be a very good place to do business.
But our spectrum is not being used well. It's the classic innovator's quandary: We made good decisions many years ago, but those good decisions created powerful incumbents, and in order to make good decisions now, we must somehow unseat the incumbents.
Today, much of the best spectrum is allocated to broadcast television. Decades ago, when 90 percent of Americans received their programming this way, that made sense. Today, when fewer than 10 percent of Americans do, it doesn't.
Meanwhile, mobile broadband is quite clearly the platform of the future - or at least the near future. But we don't have nearly enough spectrum allocated for its use. Unless that changes, the technology will be unable to progress, as more advanced uses will require more bandwidth, or it will have to be rationed, perhaps through extremely high prices that make sure most people can't use it.
The FCC could just yank the spectrum from the channels and hand it to the mobile industry. But it won't. It fears lawsuits and angry calls from lawmakers. And temperamentally, Genachowski himself is a consensus-builder rather than a steamroller.
Instead, the hope is that current owners of spectrum will give it up voluntarily. In exchange, they'd get big sacks of money. If a slice of spectrum is worth billions of dollars to Verizon but only a couple of million to a few aging TV stations - TV stations that have other ways to reach most of those customers - then there should be enough money in this transaction to leave everyone happy.
At least, that's some people's hope. Some advocates want that spectrum - or at least a substantial portion of it - left unlicensed. Rather than using telecom corporations such as Verizon to buy off the current owners of the spectrum, they'd like to see the federal government take some of that spectrum back and preserve it as a public resource for the sort of innovation we can't yet imagine and that the big corporations aren't likely to pioneer - the same as happened with WiFi. But as of yet, that's not the FCC's vision for this. Officials are more worried about the mobile broadband market. They argue (accurately) that they've already made more beachfront spectrum available for unlicensed uses. And although they don't say this clearly, auctioning spectrum to large corporations gives them the money to pay off the current owners. But even so, they can't do that.
"Imagine someone was given property on Fifth Avenue 50 years ago, but they don't use it and can't sell it," says Tim Wu, a law professor at Harvard and author of "The Master Switch." That's the situation that's arisen in the spectrum universe. It's not legal for the FCC to run auctions and hand over some of the proceeds to the old owners. That means the people sitting on the spectrum have little incentive to give it up. For that to change, the FCC needs Congress to pass a law empowering it to compensate current holders of spectrum with proceeds from the sale.
One way - the slightly demagogic way - to underscore the urgency here is to invoke China: Do you think it's letting its information infrastructure stagnate because it's a bureaucratic hassle to get the permits shifted? I rather doubt it.
Of course, we don't want the Chinese system. Democracy is worth some red tape. But if we're going to keep a good political system from becoming an economic handicap, there are going to be a lot of decisions like this one that need to be made. Decisions where we know what we need to do to move the economy forward, but where it's easier to do nothing because there are powerful interests attached to old habits. The problem with having a really good 20th century, as America did, is that you've built up a lot of infrastructure and made a lot of decisions that benefit the industries and innovators of the 20th century. But now we're in the 21st century, and junk won't cut it anymore.
Bump Technologies makes an app that lets people bump their phones together to exchange things like business cards, photos and even money.
On Tuesday, Bump will announce that it has raised $16.5 million in venture capital. The firm Andreessen Horowitz is Bump’s newest investor, and its previous investors, including Sequoia Capital and Ron Conway, also contributed.
Bump started in 2008 as a way for people to exchange contact information without trading old-fashioned paper business cards. But in its newest incarnation, the start-up wants to become a mobile social network for exchanging photos and messages with family and friends.
Now, in addition to contact information, people with iPhones or Android phones can share photos, music, calendar appointments and location, and can also become friends on social networks and send messages to one another. Other apps also use the technology. PayPal, for instance, lets people exchange money by bumping their phones, and two apps trade sexual compatibility information.
The company is changing direction because people started using Bump more for social interactions than business ones, said two of its founders, David Lieb and Jake Mintz. For example, each day people now share about 40,000 contacts but almost a million photos.
“Bump just opens up a whole new landscape of social interactions and interpersonal functions and uses and photo-sharing and transactions, all based on physical proximity,” said Marc Andreessen, the Andreessen Horowitz partner who will join Bump’s board.
There are many other social networks that people already use on their phones to share photos, location and status updates, like Facebook, Foursquare and Instagram.
Bump is different, the founders said, because it enables private exchanges between two people, unlike others that are for publishing messages or photos to wider groups or the public.
“It’s a proximity-based social network, for people and things you’re actually physically interacting with,” Mr. Lieb said.
Bump is one of a group of mobile apps that give people a way to use Internet-connected cellphones to bridge the virtual and physical worlds.
That could become a way to make money, the founders said. For example, people could someday bump their phones to get information or coupons from businesses or brands. “That could be valuable to merchants,” Mr. Mintz said.
Other apps, like Shopkick, offer similar ways for businesses to reach customers. Bump is not making money yet, beyond a bit from other companies that license its technology.
Bump works by gathering several signals from phones, including location and motion detection. Those signals are sent to Bump’s servers, where Bump figures out if another phone in the same place just experienced a bump, then matches the two phones. It all takes place immediately.
Andreessen Horowitz has been busy. On Monday, the firm also announced that it invested in Groupon’s $950 million round of fund-raising. The firm invests in very small Web companies and very big ones, and the Bump and Groupon investments exemplify both ends of the spectrum.
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