Ms. Laura Raedle
Advanced Composition, English F1103
Assignment #5 – Definition & Process (read: Something Out of Nothing J)
Technology has not benefited all neighborhoods equally. Twelve years ago, cellular phones were the size of shoe boxes and cost thousands of dollars. Today, a StarTAC costs only $200 and is smaller than an Estee Lauder compact. You might think such innovations would benefit us all. Yet the StarTAC I carried in San Francisco for nine months is essentially worthless in New York—at least at Columbia. In New York, the only affordable cell phones are digital (which are clunkier than the StarTAC). And to make matters worse, cellular service is basically non-existent north of 80th Street, either digital or analog. Television and radio reception are also fairly poor this far uptown. So why is electromagnetic reception so inadequate in this sprawling metropolis? Because Bell Atlantic does not understand the new economics.
Upon initial reflection, you might guess that the reason cellular reception is poor is the high density of tall buildings. Indeed, this is an explanation that Bell Atlantic spokesmen sometimes espouse. Of course, if that were really the problem than Midtown and Downtown would suffer just as much, but that is not the case. Cellular service is excellent in those neighborhoods. The real explanation is that there are very few cellular antennas in this neighborhood because Bell Atlantic does not consider Harlem or Morningside Heights to be worthwhile cellular markets. This is shortsighted of them because the benefits of increasing their coverage would far outweigh the cost of installing additional antennas.
In traditional economics, the more rare something is, the more valuable it is. The value of a Rembrandt painting, or a large diamond, or a classic car is directly proportional to how unique it is. This is true for most commodities but not for communication devices. How would you like to be the one person in the world with a fax machine? Or telephone? Or radio or television? With communication appliances, the more widespread and ubiquitous they are, the greater their value. For this reason, it is often cost-effective to give away the devices in order to increase the predominance of the standard. For example, some people have suggested that when Nintendo introduces a new video game system they should give the machines away because they make so much more money on the software. And the more people who own Nintendos, the more likely game makers are to develop titles for it, which in turn encourages more people to buy Nintendos. Likewise, if everyone owned a cellular phone, their value would increase dramatically. (Walkie-talkie sales would admittedly suffer.)
Cellular service providers understand this to a certain point. They often do give away the phones in order to sell their service. But they have not followed through with the other half of the venture by establishing a thorough presence in all of their local markets. Perhaps Columbia students and Harlem residents are not going to be the biggest adopters of cell phones, but I think the providers are making a mistake. Even if no local residents ever bought service, overall sales would increase because the service would be more valuable to other customers, who at some point will find themselves in this neighborhood. In telecommunications, the more encompassing your sphere of influence, the more valuable your service. Satellite cell phones, which work anywhere on the globe, are just around the corner, so Bell Atlantic better expand their coverage if they want to keep their market share.