Thursday, March 09, 2006

Steal This Signal



A recent New York Times article discussed how seemingly benign wireless free-riding can turn into a full blown "tragedy of the commons."

Suppose you live in an apartment complex with lots of neighbors. You purchase a wireless router that allows you to surf the web on your laptop from anywhere in your apartment. Unfortunately, your neighbors can use your connection too. They start to realize this, and soon the whole building is free-riding off your connection. Your internet connection slows to a crawl.

In the usual tragedy of the commons story, too many sheep on common grazing land render the land unusable. Like the common grazing land, the wireless service provided by your router is a common resource, a term economists use for a good that is "nonexcludable" (you can't prevent others from using it) but "rival" (one person's use of it diminishes other people's ability to use it.)

Often, the same good (in this case, wireless access to the internet) can be categorized in different ways. If you secure your network with a password, then the service becomes excludable. You could, in principle, sell the right to use your internet connection to your neighbors. In this case the service is a natural monopoly, kind of like cable TV. If only a couple of your neighbors turn out to be free loaders the speed of the service won't be affected, and your wireless service will resemble a public good--neither excludable nor rival.

1. According to the Times article, what happened to Christine and Randy Brodeur before they wised up and secured their wireless network?

2. How many of the wireless networks did the 2004 Tomshardware.com survey log in Los Angeles? Of the networks they logged, what fraction was actually secured?

3. At what point does an unsecured wireless network become rival in consumption? At what point does your failure to secure your wireless network become a tragedy of the commons--overuse of a common resource?

4. Would requiring wireless network users to secure their networks with a password prevent the common resource problem the Brodeurs experienced?

Interested in the issue of wireless piggybacking? The author of this New York Times op-ed thinks it's a bit sensational to equate wireless free-loading with theft...in most cases, anyhow.

Topics: Natural monopoly, Public goods, Common resources, Tragedy of the commons

1 Comments:

  • At 1:10 PM, March 26, 2006, Blogger Jonathan said…

    Wireless access can become a tragedy of the commons in the other direction as well. The FCC has seen fit to allocate to wireless networking room for only 3 different non-overlapping channels. If more than 3 networks are active at the same place at the same time, then some (maybe all) will suffer a performance hit from interference. The electromagnetic spectrum is rivalrous, and non-excludable in this case. In my apartment I can see a dozen different networks, and all of them are closed. The only real solution: stay plugged into the wall.

    Love the blog. I only wish there were some way to know if I were getting the questions right or not.

     

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