Consumer Electronics Future Bright—If Government Doesn’t Interfere

Published February 8, 2012

Every January, tens of thousands of technology industry leaders travel to Las Vegas for the International Consumer Electronics Show. CES is one of the world’s largest and most exciting industry trade shows, the main forum where leading technology companies showcase their latest products and services and test new concepts still in development.

It is impossible for someone to leave CES without being impressed and feeling hopeful about the future of innovation. But this year the future looked a little dimmer because misguided government policies and a lack of government action on critical issues threaten to undermine the future of consumer electronics.

Impressive Technology
As I entered one of the exhibit halls, a CES staffer gave me a pair of 3D glasses and directed me to a wall displaying several large flat-screen televisions. I watched a typical 3D video of a colorful bird flying over a forest and seemingly right toward me. Then the CES staffer directed me to move to a TV farther down the wall, where I could see myself on the screen in rich 3D.

As I moved my arm, my image on the screen moved its arm, as if I were looking directly into a mirror. This was made possible through a dual-lens camera, which will soon be available to consumers as a standalone device and, one day, as part of a smartphone. Videos shot with the camera can be shared easily and almost instantly through the Internet-ready TV on YouTube or Facebook. My mind spun at the possible uses of this new technology for journalism, activism, and home entertainment.

At one exhibit, I listened to a 30-minute presentation on a personal home-energy system that can power up the house when electricity goes out. Next to that exhibit, I saw a refrigerator that notifies a homeowner via email or text message when perishable food, such as milk, is about to spoil.

Continual Improvements, Integration
Several industry trends were apparent at CES. First, as always, there is a push to get electronic devices to do more. Second, from the tablet connected to your work email to the shower radio connected to Pandora’s streaming music service, there is a desire for more integration between devices. Third, there are going to be a lot more devices. Consumer electronics companies are now making phones, readers, washing machines, water filters, binoculars, and more, and they will continue to add processors to other products we use to increase their functionality.

At the same time, the usefulness of consumer electronics will continue to improve as will the increased productivity and prosperity that such progress provides.

Hindering New Products, Services
As I boarded my flight home and reflected on what I saw at CES 2012, I could not help but think that the future was bright.

But as I reflected, I realized that the government, without care, could hinder future progress through misguided policies or failing to take action on critical issues to allow consumer electronics to continue to innovate and grow.

As more devices become connected, there will undoubtedly be more information collected and shared. Some people might not want to announce on Twitter what movies they are watching via Netflix. This could lead to calls for the government to act, in the name of consumer protection, to greatly restrict how information, even innocuous data, is collected and used.

Additionally, as consumers use more devices, there will be increased demand for bandwidth and spectrum. Several CES attendees I met spoke of expecting to see an average of five wireless devices per person over the next few years. Unless there is an increase in available radio spectrum, consumers could face longer download times, dropped calls, and poorer service. It will also mean more e-waste as people discard old devices to get new ones.

Refrain from Overregulation
To ensure our consumer electronics future remains bright, it is critical for the government to refrain from overregulating, especially in terms of privacy and environmental protection, lest it hinder the proper functioning of new products and services. Rather than restrict data collection or mandate e-waste responsibilities, government should stand back and help consumers understand the tools available to them to protect their privacy and recycle old products.

Most major companies announce their privacy policies when a consumer activates a new product or service, and privacy tools often come built into devices and Web sites. Most major electronics makers and retailers have easy-to-use recycling programs in place in stores and through shipping services to take back bad old or unwanted devices.

If there is an area where the government should act, it is to free up commercial radio spectrum through market-based mechanisms such as incentive auctions. Market-based solutions are the most efficient and politically neutral way to make spectrum available for the rapidly growing demand. As technology analyst Richard Bennett correctly noted, “When the right to use spectrum is offered to bidders on equal terms, the market expresses itself in the form of bids that represent expert judgments of spectrum’s economic value to application providers.”

By letting the market works its magic, government will ensure that the future—and next year’s consumer electronics show—remains bright.

John Stephenson ([email protected]) is director of the Communications and Technology Task Force at the American Legislative Exchange Council. Learn more at