Public Economics and GPS

This morning, I was walking to the office and trying to catch a caterpie when I thought to tweet,

Amazed the GPS network hasn’t been crushed under the load of #PokemonGo users!

When I realized, Whoa, someone might take me seriously. Then I decided to write a blog post instead. About GPS. And using it up.

The Global Positioning System, GPS, is an amazing system. Technically, it is not very complicated, but all the individual components are, if that makes sense. It was originally envisioned just down the road from me at the Johns Hopkins Applied Physics Laboratory and comprises just over 30 satellites in orbit. These satellites know essentially two things:

  1. Where they are, and
  2. What time they think it is.

The time is controlled via very precise atomic clocks and it is sent out via a radio signal. Your GPS device, probably a phone, needs to receive signals from several GPS satellites to work. The more it can “see,” the better the resolution. It works by noting the very slight differences in the time received from different satellites. Combined with some fancy alternative geometry, you can figure out where you are. The satellite doesn’t know anything about you and you don’t send your position back. All of the work happens in your phone.

But you’re not here to read about technology, you’re here to read about economics and public policy.

What makes GPS really special is that it is a nearly perfect example of a public good. I’ve talked about public goods before, but two characteristics define a public good:

  1. The good is nonexcludable. This means you can’t close the door or stop someone from using it.
  2. The good is nonrivalrous. This means your enjoyment of the good doesn’t interfere with anyone else’s.

This is GPS to a T. That’s why the Pokémon GO users haven’t harmed the network. They can use it constantly and it will not affect anyone else’s ability to use it. And that’s awesome. The cellular network is a different story, as are Niantic’s servers, but GPS does not care. That makes a fascinating example of an entirely man-made public good.

Of course, that does not mean the GPS system cannot be harmed. Some tests caused problems with the system this summer. And, of course, the United States Air Force, owner of the GPS network, could just turn it off. But then they couldn’t use it, either.

Now, what is not commonly known, is there is a second signal that is encrypted. The key is only available to United States military and selected partners. Therefore, you and I cannot use it. That makes that signal, which can provide higher precision and therefore higher resolution, excludable. Accordingly, it is called a “club good“, like a toll road or a movie theater. Neat, huh?

The Soviets also developed a system, still functional, called GLONASS, and the European Galileo navigation system is currently under deployment.

My talk at the Mars Society Convention will be about the intersection of policy, technology, science, and economics with an application to building Martian infrastructure. Please come and watch!

Image by NASA via Wikimedia Commons.