America’s thirst for more wireless service is strong. Currently, there are more wireless subscribers in the United States than there are people. The number of wireless devices hit 327 million last year, and the trend shows no signs of decline. Experts expect it to continue to rise. Worldwide, predicting 1.2 billion wireless devices could be purchased this year alone.
According to a recent survey by the CTIA, 78% of respondents report that having a wireless phone is integral to their everyday life. A majority of those surveyed, 53% said that they had used their phone to download digital goods. Clearly, many American consumers are using their wireless devices in their everyday life, and this growth in use by consumers has translated to economic growth—one study boasts that the app economy alone has created over 500,000 jobs.
But there’s one problem—America’s wireless lines, for lack of a better term, are becoming “crowded” and these wireless devices need spectrum to work better.
Spectrum shortages mean less investment and fewer jobs, but it also affects consumer services. Indeed, without more room on the spectrum cleared for wireless telephone and broadband signals, consumers could expect to get poorer and less reliable service as more consumers jump onto the wireless bandwagon. This is a problem, as so much of the future of our economy is being built on the concept of being mobile and connected to the Internet at all times.
We live in an information economy, and without mobile Internet, it makes it harder to live in that economy. Many experts say that with growth the way it is, consumers could start feeling the spectrum crunch by 2016, if action isn’t taken soon. And as quality of service decreases, consumers could see a price increase as consumers fight over scarcity of space.
Congress is supposed to act, but they seem to be moving slow. The 2012 Spectrum Act mandated work to free up certain segments of the spectrum band before February 2015, a time that is swiftly approaching. Although the commitment is there, Congress doesn’t seem to have its heart set on freeing it up as fast as it is needed.
The feet dragging on the part of the government is slowing down innovation and job growth that could come as a result of the new investment that newly released broadband would create. With this spectrum in the hands of wireless providers, a new wave of investment would spring as providers compete to bring even faster wireless broadband access to consumers.
A House hearing was held recently to discuss the progress of spectrum reallocation, but more needs to be done. Government needs to act fast to make this spectrum available. Without it, innovation in the wireless industry stops.
Government should also work to free up its other spectrum reserves—currently, 60% of spectrum is owned by the government. Freeing up that valuable resource would go a long way in easing the overcrowded spectrum networks the wireless companies and consumers are facing. That means more economic investment and more jobs for the economy, and it means giving consumers the services they want.
If Congress wants to help foster innovation instead of hindering it, they should move to free up as much spectrum as possible, as quickly as possible.
Coauthored by Zack Christenson and Steve Pociask, both from the American Consumer Institute Center for Citizen Research, a nonprofit educational and research institute. For more information, visit www.theamericanconsumer.org.