How to Sustain Innovation in the Wireless Sector

by David Honig on December 9, 2010

Innovation in our nation’s wireless sector has been one of few bright spots during an otherwise dreary economic downturn. In the teeth of the worst recession in decades, consumer demand has driven innovators to introduce an array of cutting-edge new tools like the iPad and other advanced devices that have the capability and functionality of desktop computers. Much of this demand is coming from communities of color, which are the most avid users of cell phones and mobile data services. Study after study has found that Blacks and Hispanics rely on their mobile devices to access the Internet more than any other demographic group. But the growth of this market is directly attributable to a much less tangible resource, one that is scarce and finite – yet essential – to enabling wireless data networks: spectrum.

Spectrum is the invisible resource over which electronic transmissions travel through the air to consumers. Some spectrum delivers television and radio signals, while an increasing portion is used for mobile data. The problem is that each sliver of the airwaves is capable of carrying only a finite amount of information. In the broadband age, when cell phones are being used to stream videos and music, the amount of spectrum needed to support our demand for mobile data services is enormous.

In short, our nation is facing a spectrum shortage.

Many agree that additional spectrum resources are needed to support our mobile broadband needs. Some estimate that upwards of 800 MHz of additional spectrum is necessary. How much spectrum is this? To put it into perspective, consider that all wireless providers currently use a total of about 450 MHz of spectrum. To meet projected needs, the amount of available spectrum would need to nearly triple. Fortunately, federal policymakers have acted to address this looming crunch.

Recently, the National Telecommunications & Information Administration (NTIA) released a plan for making a significant amount of spectrum available over the next few years. The plan follows several other high-profile announcements and studies released by the President and the Federal Communications Commission (FCC), each of which focused on providing innovators with access to the spectrum they’ll need to deploy network infrastructure that is robust enough to support our advanced mobile data services. Together, these plans call for an additional 500 MHz of spectrum to be made available in the near-term, nearly all of which will be reallocated for the sole purpose of supporting mobile broadband.

But making additional spectrum resources available in a timely manner is only a first step. Once it is identified and cleared, the spectrum must be auctioned off for use by wireless service providers. In the past, the FCC has attempted to design its auctions so that an array of service providers would have equal opportunity to acquire these resources. The FCC has often gone to great lengths to ensure that minority-owned businesses and disadvantaged entities were able to compete with larger, more established firms. Yet after years of auctions, as MMTC has pointed out, the FCC has largely failed to produce tangible results in fostering diversity in spectrum access. Forthcoming auctions of new spectrum will provide numerous opportunities for the FCC to revisit how it structures these proceedings, and we hope the FCC takes advantage of them.

In the short term, the priority must be on freeing up additional spectrum resources. Without these critical inputs, our nation’s wireless sector will not be able to continue growing and innovating at the same brisk pace that we have seen and benefited from over the past few years.

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