Last week, MMTC co-founder and President David Honig took time away from planning MMTC’s Annual Conference to educate the leaders of America’s municipalities about spectrum at the World Conference of Mayors Broadband Symposium in Tuskegee, AL. Since many of the attendees knew very little about what spectrum was and why it is important to their cities, Honig focused his hour-long discussion on “The Future of Broadband: How to Alleviate the Spectrum Shortage.”
The fact that so many of the nation’s leaders know little about something as important as the spectrum shortage can be disheartening, but not surprising. Spectrum is a topic many feel might be too technical to grasp, which is definitely not the case. This is why it is so important for industry experts to speak at conferences like this. For those who don’t know that much about spectrum (or want to brush up on the topic), David provided some valuable insight during his address.
What is Spectrum, and Why is it so Important to the Economy and Social Justice?
The FCC defines spectrum as the range of electromagnetic radio frequencies used to transmit sound, data, and video across the country. However put more simply, spectrum is the “invisible infrastructure” that makes wireless data transfer possible. Because our spectrum resources are finite, efficiency is our most important priority when it comes to spectrum allocations to the government, private sector, and consumers.
According to Honig, “[Spectrum] is the primary resource supporting mobile wireless Internet – without better access to spectrum resources, we expect agonizingly slow wireless Internet and frequent dropped calls.”
U.S. consumption of mobile data is increasing at an astounding rate. For example, mobile data traffic increased by 110 percent between 2009 and 2010. In fact, Cisco has suggested that the rate is exponential, projecting that mobile data traffic in the U.S. will increase by a factor of 20 between 2010 and 2015. This phenomenon is multiplied by the release and proliferation of new technologies: AT&T has stated that wireless data traffic on its network has grown 200 times since the release of the iPhone in 2007.
The economic impact of the wireless, and information and communication industries is enormous. “The information and communications technology based industries are the fastest growth sectors in our national economy, and there are extensive entrepreneurship opportunities for African American and urban communities,” said Honig. “The media, telecom and wireless industries together comprise one-sixth of the national economy; wireless and industries it supports are about one tenth of the economy. However, these opportunities can only be realized if more spectrum resources are brought to the consumer market.”
How Will the Spectrum Shortage Impact African Americans?
In spite of the importance of spectrum, one-third of Americans and forty percent of African Americans do not have a broadband connection in their homes. In addition, according to the Pew Internet and American Life Project, African Americans are behind on connecting to the Internet in general, with 70 percent of African Americans connecting, compared with 76 percent of whites.
African Americans, however, are the heaviest adopters of wireless connections on their mobile phones. The African American mobile wireless subscription rate is 58 percent, compared to 41 percent for whites.
According to Honig, this is a double-edged sword. “The relative affordability of mobile wireless broadband use versus costs for home broadband use sparked some to describe this phenomenon as the ‘minority wireless miracle,’” he stated. However, “Since African Americans are disproportionately relying on mobile wireless broadband for Internet access, they will be [disproportionately] affected if the supply of commercial spectrum is not increased.”
What are the Nation’s Spectrum Resource Needs?
In the National Broadband Plan, the FCC set the goal of 500 MHz of spectrum to be made available over the next ten years. The President agreed, and also set a goal of 98 percent of the nation to be able to access high speed broadband by 2015. These goals, however, are easier said than done.
“In economic terms, 500 MHz amounts to$166 billion increase in GDP, at least 350,000 jobs, and $23.4 billion in government revenue,” said Honig. “However, the Federal Communications Commission…conservatively estimates that mobile data demand will exceed available capacity by 2013, and that we will reach a nearly 300 MHz deficit by 2014. This is ‘Spectrum Exhaust.’”
In 2011, FCC Chairman Julius Genachoswki issued the dire warning that “the spectrum crunch is the single biggest threat to one of the most promising parts of our economy.” Over the next five years, the FCC plans to make 300 MHz of new spectrum available primarily through spectrum incentive auctions.
Unfortunately, the FCC projects that new technologies such as 4G networks will do little decrease the demand for spectrum. Although the technology uses our available spectrum more efficiently, “data traffic volumes are projected to increase by a factor of 35 by 2014, which far exceeds the gains from technological improvement,” according to Honig.
“If no additional spectrum is allocated to mobile broadband, wireless carriers will need to invest over $170 billion in building enough capacity to accommodate anticipated demand for mobile data traffic by 2014. This is an astronomical sum of money that the market cannot support,” Honig warned.
What are Some Technical and Policy Solutions to Alleviate the Spectrum Crunch?
While there are “simple” solutions that can be implemented by wireless providers, such as adjusting price and bandwidth or implementing data caps for the heaviest users, there are several technical and policy solutions to alleviating the spectrum crunch.
At the symposium, Honig outlined several technical solutions that can be implemented by individual companies or industry-wide:
- The sector can implement new technologies that improve “spectral efficiency,” or the amount of data that can be transmitted on a given band of spectrum.
- Companies can construct new cell sites, which would increase network density.
- Companies can use Wi-Fi or other antenna systems to offload wireless traffic onto wireline networks.
- The sector can develop new technologies, like smart antennas and Femto cells, which increase efficiency and coverage.
Honig cautioned, however, that “technical solutions alone will not be sufficient able to allow capacity to keep up with demand. Smart spectrum policy will be part of the solution.”
The FCC is the agency that regulates spectrum for commercial use, and it currently has several plans in the works to deploy more spectrum. Incentive auctions will free up and reallocate broadcast spectrum for wireless broadband applications. It will also implement secondary markets, or spectrum auctions that will take place after the initial allocation and usually by the initial spectrum owner and a third party.
The National Telecommunications Information Administration has also weighed in on solutions to the spectrum crunch. The NTIA reported earlier this year that it is possible to repurpose 95 MHz of government spectrum currently in use by federal agencies such as the Department of Defense for commercial wireless broadband use.
Despite the solutions currently being considered and implemented, Honig warned, “The challenges linked to repurposing and relocating federal users make repurposing a long-term solution. Primary obstacles include the cost ($18 billion), implementation, and the time horizon for completion (over ten years).”
What Can Local Communities Do?
Honig closed his remarks by informing the mayors on how their cities could contribute to the solution, and ways that they already do.
On WiFi municipal networks, Honig pointed out that “WiFi programs implemented in public institutions like libraries and schools are successful,” and although community-wide municipal WiFi for large cities like Seattle has not proven successful and has even cost local governments more money to run, “WiFi municipal wireless networks have shown promise in smaller towns where there is a lack of commercial competition.”
Regressive taxation has been proposed as a solution, but according to Honig, “Regressive taxes provide no relief for state and local government budgets because they push the working ‘near-poor’ into poverty, thus requiring governments to spend more on social safety net services. Creating more poor people also discourages new business development and impedes efforts to attract new businesses to a state or city.”
In addition, targeting wireless consumers may have ramifications for long-term state economic development and growth. “Higher taxes on wireless service, coupled with increased taxes on wireless investments, may lead to slower deployment of wireless network infrastructure, including 4G wireless broadband technologies that an increasingly mobile workforce relies on for economic success,” said Honig.
It is clear at this point that the spectrum shortage is a complex problem with increasingly complex solutions. In addition to policies on the federal level and technical fixes within the industry, it is important to inform and include our local leaders and communities in the battle. The clock is ticking on the spectrum crunch, and we cannot afford to let our communities suffer if we cannot effectively implement solutions.
Marcella Gadson is the Editor in Chief of the Broadband and Social Justice Blog and Director of Communications at the Minority Media and Telecommunications Council (MMTC).