Policy Induced Spectrum Shortages

Regular readers of this blog are well aware of the threat posed by the coming spectrum crunch.  As consumers adopt more and more data hungry wireless devices, the spectrum that carries the wireless networks will begin to feel a pinch.  More users on the same amount of spectrum as currently
allocated to wireless providers means poorer service for consumers.  As technology progresses, our economy becomes more high-tech, and as the world begins to rely more and more on wireless Internet, it becomes even more important to free up resources and ensure that spectrum is allocated efficiently to meet the seemingly endless consumer appetite for spectrum.

Consumers are hit hard by the spectrum crunch.  As more people utilize the current wireless broadband infrastructure, service will get poorer and spottier, and prices will rise to meet the demands of stressed network.  We’re already seeing evidence of higher prices after the blocked merger of AT&T and T-Mobile, which has caused prices for consumers of both providers to rise due to the lack of spectrum as both desperately need to provide for their expanding consumer base. 

As FCC Chairman Genachowski recently noted at CTIA’s annual conference, wireless devices now reach more people globally than electricity or running water.  And this immense growth will only continue in the coming years as more and more of the developing world adopts wireless devices.  So what does that mean for consumers? 

For years, wireless broadband providers, analysts and the tech industry have been explaining the need for more spectrum for innovation and to better serve consumers who expect faster speeds and higher quality service at an affordable price.  Unfortunately, there’s still a lot of hard work that needs to be done to bring new spectrum to market.  Congress recently passed legislation to authorize the FCC to conduct incentive auctions of broadcast spectrum – a great first step – but it will be years before any of this spectrum is actually deployed to service consumers.   In addition to the pending incentive auctions, the government and the mobile broadband industry must work closely together to identify additional spectrum resources that could be repurposed for commercial uses.  While these long-term initiatives are critical to meeting the crunch over the coming years, secondary market transactions are critical to alleviating short-term spectrum needs. 

Currently, the FCC is reviewing an important secondary market transaction as Verizon Wireless is attempting to purchase a large block of fallow spectrum from SpectrumCo.  Verizon Wireless is committed to deploying this spectrum quickly to better service its customers and build out its LTE network.  The FCC should encourage transactions like this and any others that help ensure that dormant or underutilized spectrum is put to its best use to meet consumer demands and drive the deployment of new technologies.  A robust and well-functioning secondary market is critical to meeting the goals of the FCC’s National Broadband Plan and approving this deal will send a clear signal that the FCC is committed to fostering a healthy secondary market.

All of these consumer benefits could be derailed by the looming spectrum crunch.  Fortunately the crunch can be alleviated if spectrum is allocated appropriately with a comprehensive approach to spectrum policy that includes a healthy secondary market, open incentive auctions and continued efforts from the government to identify and repurpose spectrum.

Zack Christenson writes on digital tech issues of the American Consumer Institute

 

FacebooktwitterredditlinkedinFacebooktwitterredditlinkedin