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Summary:

The wireless industry has been racing to keep up with consumers’ ever-increasing reliance on mobile technologies. Jonathan Spalter, chairman of Mobile Future, argues that it’s now time for the government to respond with the same sense of urgency.

spectrum_ jurvetson

In my twenty-five years working with leading wireless technology, media and research companies, as well as serving as an official in the Clinton administration, I have seen first-hand the blistering speed with which U.S. consumers are adopting wireless technologies and the tremendous strain those 330 million wireless connections are placing on our finite spectrum supply. As the board chair of Mobile Future, a coalition of technology and communications companies and non-profit organizations that support investment and innovation in wireless, I can tell you that swift government action to identify and free up additional spectrum must be a national priority. Not only do we need additional spectrum to meet current consumer demand, and to ensure America’s future economic vitality, but we also must prepare for the onslaught of next generation wireless innovations.

One just needs to look at analyst predictions surrounding the release of the new iPhone5 to begin to grasp American consumers’ unquenchable thirst for wireless technologies. J.P. Morgan Chase & Co. just this week estimated sales of the new iPhone could add between a quarter and a half of a percentage point to the annualized rate of economic growth in the fourth quarter. And Time magazine last month published a must-read special issue focused on America’s mobile future. Thanks to our ever faster and more ubiquitous wireless broadband networks and the smartphones that use them, Time rightly concluded that when it comes to our demand for mobile connectivity, “only money comes close” to our “always at hand, don’t leave home without it” attitude. Then again, the magazine notes, our smartphones are quickly replacing money, too.

There are more than 330 million wireless connections in the U.S. and counting. And as we increase our reliance on mobile devices, applications and networks, we also require more of the technology backbone that supports that use — spectrum. However, the FCC, the White House, the National Telecommunications and Information Administration (NTIA)and industry leaders all agree that not enough spectrum is in place to meet increasing consumer demand.

Why?

The root of the problem is that it is primarily government and broadcasters — not wireless companies — that still hold the great majority of the spectrum best suited for mobile. And much of that spectrum is underutilized. Mobile Future recently created a “Growing Demand for Wireless Spectrum” infographic, which contrasts the booming consumer demand for mobile and the small percentage of airwaves available to support that demand going forward.

The Wireless Association (CTIA) reports that only 409.5 MHz of spectrum has been assigned by the government to support commercial wireless services. With the radio waves best suited for providing high speed, commercial wireless broadband services situated between 400 MHz and 3 GHz, wireless network operators have access to less than 16 percent of these critical airwaves. Government agencies and television broadcasters, on the other hand, primarily have access to the remaining nearly 85 percent.

To put this into perspective, consider that commercial wireless broadband providers support more than 330 million connections with 409.5 MHz, serving nearly 90 percent of the American public, while broadcasters provide traditional, analog television to just eight percent of the U.S. population.

This meager allocation of spectrum is the same amount that was available to support the mobile Internet in 2007 when the iPhone was first introduced.

Flash forward to today:

What lies ahead?

The FCC has stated that without additional spectrum, by 2014 U.S. wireless consumers will not have enough spectrum available to fuel their devices.

Just imagine if traffic on your local freeway was expected to grow 74 percent each year for the next five years and there was no land available to build additional lanes?

While the Obama Administration and the Federal Communications Commission have worked diligently to draw attention to this issue, concrete and immediate action is needed to help alleviate both the near-term and long-term strain.

The FCC and the White House have shown great leadership in finding a path toward making more spectrum available for consumers to use. But they need to seal some deals — from reallocating under-utilized government spectrum for mobile use to setting near-term plans for voluntary incentive auctions to supporting a vibrant secondary market that allows spectrum to move to its most valued use. Mobile Future recently sent a letter to President Obama outlining a series of twelve such steps that can be taken this year.

And these actions would come not a moment too soon, as Time reminds us.  According to Time’s Mobility Poll, one in four Americans check their phones every 30 minutes and one third of us admit that being without it for even a short period makes us anxious.

The wireless industry has been racing to keep up with consumers’ wireless use. Now it’s time for government to respond with the same sense of urgency.

Jonathan Spalter, chairman of Mobile Future, a coalition of technology and communications companies, consumers and a diverse group of non-profit organizations focused on the wireless sector.  

Explore the implications of our increasingly wireless world at GigaOM’s Mobilize conference in San Francisco (September 20 – 21).

Image courtesy of Flickr user jurvetson.

  1. I’m sorry, but as a rural person, you will find no sympathy from me, when AT&T is still running EDGE on the local network.

    Show me that they are truly taking advantage of the spectrum they already have and I might be inclined to support you, but giving the industry more spectrum just makes them wasteful with what they have.

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  2. One of the leading consultancies for the mobile phone industry in Europe, Analysys Mason, skewered this argument in an article for Fierce Wireless earlier today. If they don’t buy into the spectrum crisis myth, no one should:

    See http://www.fiercewireless.com/europe/story/analysys-mason-operators-face-crisis-slow-data-growth/2012-09-13

    Excerpts: “It is easier for operators to create an artificial spectrum crisis by exaggerating demand than to improve the utilisation of what spectrum they have… Wi-Fi is the default network for most smartphone and tablet traffic. Wi-Fi is not a work-around for cellular in the home and in uncontested public spaces — it is the default option…

    “Instead of worrying about the impact of a mobile data explosion, operators should worry about making it happen in the first place. Current and future trends as we see them indicate that there is not enough growth in mobile data to stop the mobile industry in most developed countries from contracting. Coupled with some loss of core voice/messaging revenue to over-the-top players, and some erosion of their position in device distribution, this contraction could be severe…

    “The truth is that mobile operators in developed economies are going to have to get used to being the victims, not the perpetrators, of disruptive substitution: fixed and Wi-Fi can do most of what mobile does (except the wide-area/mobility bit) at a fraction of the price to the end user, but mobile can do only a fraction of what fixed and Wi-Fi can because of its inherently limited capacity.

    “Whatever happens, we believe that mobile operators will have to readjust to higher-than-expected unit prices and lower-than-expected volumes. At worst, they will have to think about managed decline.”

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    1. “Current and future trends as we see them indicate that there is not enough growth in mobile data to stop the mobile industry in most developed countries from contracting.”

      And you’re also claiming that the sun rises in the West, right?

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    2. I do believe that we’re facing continued growth in demand and that ‘managed decline’ is way off in the future, if at all.

      Having said that, the wireless operators are among the most hated and most distrusted companies in America. That doesn’t happen by accident.

      Before ANY more wireless spectrum is allocated to the wireless operators, I think we the people, represented by our elected government, need to see plans to address the issues of greatest consumer dissatisfaction. Off of the top of my head, here are a few:

      1. Price gouging. The most blatant example is the price charged for SMS messaging. When we know how badly we’re being gouged for SMS, it destroys customer loyalty and trust.

      2. Data capping. I don’t believe that data caps are required for the mainstream wireless user. There may be a tiny fraction of abusers, but I believe it’s tiny. In my view data-capping is the new mechanism being set up to replace the price gouging for SMS messaging. Why do I think this? Because the way data capping is implemented, it doesn’t address the problem of network overload. If network congestion was truly the problem, we’d see throttling (and incentives) to protect peak usage times. Remember when we used to pay for long distance voice and it cost more during weekdays and less at night and on week-ends? Rated data plans would be more effective at addressing congestion than capped data plans, but capped data plans make more money because everyone pays the prime-time rate for the data they use.

      3. Charging for data more than once. The wireless operator charges me $x for 2GB of data. If I choose to tether an independent device to use that data that I’ve paid for, the operator charges me more. That’s like Exxon charging more if you plan to use some of their gasoline in both your car and your lawnmower.

      4. Service selection. I don’t use telco voice. In the period that I owned my previous iPhone, I didn’t use up even 1 month of my voice plan limit. Before we worry about the need for additional bandwidth, how about if we find out how many unused minutes like mine are included in the operators current forecasted requirements. I know some people use voice constantly (it seems like many suburban warriors cars and SUVs won’t start unless their phones are pressed to their ears), but I know there are many people like me too. I don’t want to pay for services I don’t use, nor do I want to worry about allocating additional bandwidth to the carriers if they really don’t need it.

      The airwaves belong to all of us. I think the wireless operators need to come forward with a plan to improve our collective satisfaction with their services before we think about allocating any more of our bandwidth to them.

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      1. Great points. Some points that need to be added are that:

        5. Quality spectrum should not be amassed by two monopolies. For example, Sprint and Tmobile have higher frequencies that are no match for the 700 Mhz range of the two incumbents.

        6. Spectrum should be sold in 10Mhz up and 20Mhz down bundles, which allows carriers to offer full speed data services.

        7. No one carrier should be allowed to amass more than x spectrum, particularly quality spectrum.

        8. Most important, if spectrum purchased is not utilized within a year or two, it must be sold again. No company should be allowed to purchase and hoard spectrum, only to resell it fora profit to anyone the choose down the road.

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  3. Giving AT&T, Verizon, Sprint, and T-Mobile anything is a waste of time, make or ensure an environment whereby anyone with the tech, cash and vision can leap-frog over those toll keepers.

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  4. Since Mobile Future just parrots the views of its sponsors, don’t count on seeing a reply here anytime soon.

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  5. Calm down! Where is the promised inventory of spectrum held by telecoms? I keep reading about Clearwire’s enormous unused inventory they “acquired”, see this article http://www.dailywireless.org/2012/09/14/clearwire-on-the-hot-zone/ . Does the writer know why AT&T is sitting on a huge amount of spectrum acquired in 2006?

    TV spectrum, in 6MHz swaths has little relative capacity, why would that article not discuss this, and what % is Broadcast vs Government? The article forgot emerging technologies such as Lucent’s microcells, and the effect they will have on spectrum efficiencies. Our technology sector deserves more crdit! In addition to super growing WiFi, what effect would other unlicensed spectrum have? Let’s learn from history, this is a finite resource or LAND GRAB and all the facts and other POVs should be revealed before proselytising to the uninitiated or uninformed.

    The Indians are not attacking, calm down. This article was obviously meant to help achieve an objective; to get land (spectrum) transferred to a certain sponsor(s). I’d listen to Martin Cooper, the inventor of the cell phone, who says the carrier’s claims of a spectrum crisis is highly exaggerated. But what some individual’s won’t do for land has not been historically determined!

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  6. Several points here . . .

    — The Time article mentions “10 Ways Mobile Technology Is Changing Our World,” but note none of the applications depicted are particularly bandwidth intensive.

    — Mobile Future criticizes broadcasters for having a lot of spectrum, but Qualcomm, a Mobile Future member, says broadcasting will be an important means of sending the same data to many people. Could the current TV broadcasting system be a part of that distribution, saving more mobile spectrum for unicast purposes?

    — The National Broadband Plan says there’s 547 MHz for mobile use, not 409.5 MHz. Why the discrepancy?

    — The spectrum you are after, TV broadcast spectrum, is deprecated by Qualcomm as part of the research behind its “1000x mobile data challenge.” Their current scenarios for increasing capacity 1000 times involve keeping current UHF mobile spectrum allocations and adding capacity at higher frequencies, around, say, 3.5 GHz. Because of its limited range, higher frequencies allow for greater frequency reuse. The 1000x challenge is a work in progress, and we’ll see if this view holds.

    — “This meager allocation of spectrum is the same amount that was available to support the mobile Internet in 2007 when the iPhone was first introduced.” But, it can be reused by adding more small cells increasing capacity many times more compared to just adding spectrum. Even Qualcomm (again, one of your members) says “the next performance and capacity leap will come from network topology evolution by using a mix of macro cells and small cells – also referred to as a Heterogeneous Network (HetNet) – effectively bringing the network closer to the user,” and not spectrum.

    — The Cisco forecasts, one of which you cite, are always high compared to others. I suspect this is due in part to the forecast’s preparation being led by the marketing head in the department that sells hardware to mobile operators, hardware that is intended to address the deluge of data the forecast predicts. So, Mobile Future should consider other forecasts as well. Note that even with the Cisco forecast, however, the year to year growth rate is decreasing (even as the absolute predicted data rises.) Mobile Future should also see the 4G Americas May 2012 report, “New Wireless Broadband Applications and Devices: Understanding the Impact on Networks.” In that report, 4G Americas extrapolates Cisco’s forecast and find the growth rate tending toward zero in 2020. Again, let’s don’t rely on one forecast, but Mobile Future should ask itself what is happening here.

    — I don’t recall the FCC ever saying that “without additional spectrum, by 2014 U.S. wireless consumers will not have enough spectrum available to fuel their devices.” What is your source for this comment?

    Aside from these details, I agree with much of the thrust of the post that mobile broadband is important and will become more so, U.S. spectrum policy should be reformed and improved, and we need should take a hard look at government spectrum use. It should be easier to repurpose spectrum.

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  7. let see what government will do …

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  8. This author can present no real tech or engineering data showing ATT or VZ using their spectrum let alone using it efficiently. Good comments by smart readers.

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  9. Television spectrum has already been squeezed twice to free up spectrum for other uses. First the loss of channels 70 – 83, and then recently 52 – 69. Broadcast television has become much more efficient since the digital conversion, with many offering several subchannels as well as the main channel. However, in built up areas there is a scarcity of available channels for use, as they need to be mindful of the needs of other nearby cities. Co-channel interference can be a very real problem in some areas. And I definitely disagree with shutting down television broadcasting altogether and forcing people to get their television through satellite or cable like some have suggested. Not everyone can afford this, or is even in an area where they can get it. From what I understand the mobile companies are sitting on a fair bit of unused spectrum. Let them use that before coming crying for more. In my country (Canada) many of the mobile companies are also the cable and satellite companies. There’s nothing they would love more than to shut down over the air broadcasting of television and force it to pay services only, especially as they also own many of the television stations as well.

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  10. Thanks for the thoughtful comments. There are a few points I want to address:

    – There is widespread agreement both within government, in the academy, and in the wireless industry that spectrum scarcity in the United States is real. Unchecked, the spectrum crunch we face as a nation will have negative impacts on consumers nationwide, but also can affect our economic productivity, hamper our innovative capacity, and diminish our longer-term global competitiveness. Network engineers have attested that the spectrum crunch already is being felt by many wireless users in some urban areas. With support of President Obama, the FCC Chairman and members of Congress on both sides of the aisle, addressing the spectrum challenge has become an issue of national priority. And rightly so. In a time when bipartisanship is in short supply, the fact Democrats and Republicans in Congress joined in common cause with President Obama and the FCC leadership to pass legislation to allow incentive auctions for underutlized broadcast spectrum to proceed is an enormously positive step. The FCC is now preparing for implementing the next steps in this process. But much more remains to be be done by government, and done quickly to ensure American consumers can reliably expect sufficient spectrum over the long haul — especially in freeing-up underutlized swaths of spectrum currently held by various federal agencies. To suggest that spectrum scarcity is somehow either a figment of our imagination, or more cynically, is manufactured, is simply not supported by facts, by science, or by logic.

    – To answer’s Steve Crowley’s question, FCC’s data shows that consumer demand for spectrum may exceed existing capacity as early as 2014 can be found here: http://download.broadband.gov/plan/fcc-staff-technical-paper-mobile-broadband-benefits-of-additional-spectrum.pdf

    – While the wireless industry and a range of technology innovators also are working on advanced spectrum efficiency and sharing technologies, these take time to deploy and achieve meaningful scale nationally. According to some network engineers, advanced sharing technologies alone are not short-term solutions to address the current spectrum crunch. More here from wireless engineer Peter Rysavy: http://www.rysavy.com/Articles/2012_07_Spectrum_Sharing.pdf

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