The obsession for spectrum

Consumers are using wireless communications services at a torrid pace.  These services’ 336 million subscribers use wireless connections to make conventional voice calls, send texts, and get access to a host of Internet websites, including educational information, government services, news, games and video entertainment, business and employment-related services, and specialized health systems, to name a few applications (apps).   

With subscribership more than doubling in the last decade, the impact of wireless services is making a major impact for the good of the U.S. economy.  A new study estimates that licensed wireless spectrum contributes to $400 billion in Gross Domestic Product, 1.3 million new jobs and at least $5 trillion more in consumer benefits. Excluded from the $400 billion was the economic value of applications such as entertainment, education, healthcare, and mobile communications used to produce income. Wireless applications and spectrum that supports these activities are massively important.   

{mosads}The study’s results are not surprising, considering the growth in subscribership, particularly as it relates to consumers’ increasing appetite for wireless broadband data.  The data volumes of consumer apps doubled during 2013 and reaching 3.2 trillion megabytes, and ABI Research estimates that data usage will grow 400 percent from 2014 to 2019.  But this explosive consumer growth may soon be rivaled by radio frequency communications between objects and machines – in the so-called Internet of things (IoT) – where physical objects are embedded with electronics, software, sensors and connectivity to autonomously exchange data with manufacturers, operators or other connected devices.  

Some of the applications for wireless “things” are familiar – inter-vehicle data exchange, heart monitoring data, Wi-Fi connections between router, laptops, tablets and smart phones.  However, other applications of IoT will involve gear that grooms our in-home climate and home appliances, traces malfunctioning components, tells us when receptacles and shelves are full or empty, and manages nutrient levels in factory farms.  With the help of wireless communications, the number of ways to squeeze more efficiency out of industrial and agricultural applications will be immense.  

The Council of Economic Advisors estimated that 20 times more spectrum would be needed over a 5 year period, which is why getting more spectrum should be an obsession for our political and economic leaders.  However, the amount of radio frequency spectrum available is limited by nature, which is why auctions are needed to repurpose unused and underused spectrum to its highest and best use. 

This is the philosophy that supports transferring, by auction, underused TV channels to mobile wireless operators.  Some underused TV channel spectrum was auctioned off in 2014 (the so called AWS-3 auction) generating 65 MHz of spectrum for licensed use and about $45 billion in auction fees from the winning bidders.  A second batch of TV channels operating in the 600 MHz band is to be auctioned in 2016, after much delay.  

Except for some planned unlicensed spectrum, after next year’s broadcast television spectrum incentive auction, there is little else available for the Federal Communications Commission (FCC) to auction, despite immense growing demand for wireless broadband services.  However, many government agencies are hoarding unused or underutilized spectrum.  While it is entirely possible that government agencies are loathe to part with spectrum they were once granted long ago and now regard as their birthright, the public needs the spectrum more and that spectrum needs to be repurposed by auction to the benefit of the public.   

Congress needs to give the FCC the authority to take this hoarded spectrum and auction it, so it can go to its highest and best use.  With the recent study’s estimate of trillions of dollars of consumer benefits, withholding these benefits is not in the public’s interest.   

It is time for our elected officials to put consumers first. As we said, making more wireless spectrum available must be an obsession for our political and economic leaders.

Daley and Pociask write for The American Consumer Institute Center for Citizen Research, a nonprofit educational and research organization.  For more information about the Institute, visit www.theamericanconsumer.org.