The Lessons of a Liberating Technology

BEN WATTENBERG

November 18, 1992|By BEN WATTENBERG

WASHINGTON — Washington. -- Next Monday the 10-millionth American will be enrolled as a subscriber to a cellular telephone system. That is only nine years after the inception of the industry, and about 30 years ahead of schedule. There are some lessons and observations to be gleaned from the rapid growth of cellular:

Beware of experts. AT&T invented cellular and engaged McKinsey, a respected management firm, to forecast the likely growth path for cellular phones. McKinsey's estimate was not 10 million in 1992 -- but 900,000 by the year 2000. Not enough, said AT&T, and didn't proceed on certain cellular lines. Last week, recognizing its error, AT&T bought a one-third interest in McCaw Cellular Communications. The cost was $3.8 billion, which, as these things are denominated, is more than one Perot.

Consumers know best. Cellular was originally envisioned as mostly a car phone for businesses. It can indeed form new enterprises and increase the productivity of old ones. Cellular can make a cab driver into an on-call limo service. A real-estate broker with a cellular-modem-fax-laptop in the car doesn't waste much time in the office. A farmer on a tractor consults his accountant.

But now it turns out that most cellular phone sales are neither for cars nor for businesses. Parents give a cellular phone to a daughter out on a date, lessening worry. (''Dear, it's past curfew. Where are you, dear?'') Mothers on the way home from work pick up kids at soccer practice while calling the supermarket for a delivery. Cellular companies did not start the evil practice of car-jacking, but they benefit from it. (Press auto-dial to get a cop, quick.)

Beware of governments trying to be experts. There is some talk in Clintonland about ''industrial policy,'' the belief that the U.S. government should engage in economic planning to bolster certain classes of products. But if experts can't pick winners because they can't predict consumer behavior, what chance does government have?

How bad was that recession? About 7 million new cellular customers came on line during the last three years, purchasing a not-inexpensive service, when the economy was allegedly in the pits.

American businesses can still do it. The American cellular industry has created 100,000 new jobs, and leads the world. Prices for the phones are way down. (As opposed to the phone-service charges, which are only inching down.) Quality is way up. A portable phone used to be called ''a brick'' or a ''bag phone.'' Motorola, the world's biggest cellular company, produces the lightest unit, 5.9 ounces. The Dick Tracy wristwatch-phone is on its way.

Americans are working in Russia, Eastern Europe, China, Brazil and India to build new cellular systems, by-passing the huge costs involved in copper-wiring.

There are ways to regulate wisely. The Federal Communications Commission was a little slow to act, but then set up two competitors in each of 734 markets -- and was smart enough to mostly get out of the way. Now new technologies are coming. The FCC will license more competitors, and will try to stay even more out of the way.

Great inventions are liberating. New technology was supposed to be regimenting. But that's not what happened. Technology yields personal freedom, an American specialty. It is not an accident that most of the remarkable modern inventions come from America. Air conditioning lets people live most anywhere. Airplanes let people go most anywhere. Television and VCRs let people be informed and entertained, most anywhere, most any time. Home office equipment -- PCs with modems and faxes -- lets people work most anywhere they choose to live. Telephones let people talk to most anyone, most anywhere a wire comes out of a wall. Cellular lets people talk to people, even without a wall, or a wire.

The inventions expand, enhance and export the American way of life. Americans are properly worried about ''values'' these days. But liberation, and the ''individualism'' that comes with it, is a key American value. Pushed by technology, liberation is sweeping the world. It's fostering democracy. That's becoming our foreign policy. And we are in for lots more of it.

Ben Wattenberg is a fellow at the American Enterprise Institute.

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