While the Biden administration announced its plan to deliver high-speed internet access to every American in March, auctions for mid-band spectrum broke spending records, showing that mid-band needs to play a critical role in that effort.
Spectrum refers to the invisible radio frequencies that wireless signals travel over. As the Cellular Telecommunications Internet Association (CTIA) states, these frequencies allow consumers to “make calls from our mobile devices, tag our friends on Instagram, call an Uber, pull up directions to a destination, and do everything on our mobile devices.”
Bidding in February for mid-band spectrum at the 3.7 to 3.98 gigahertz band totaled around $81 billion, most of which came from Verizon, AT&T, and T-Mobile. To put this number in context, the amount invested in the mid-band spectrum falls just $4 billion short of the amount requested in the Biden administration’s American Jobs Plan to overhaul America’s public transit systems.
The next mid-band auction, scheduled for October 2021, marks the next phase in building out 5G infrastructure which promises to supercharge internet speeds and allow consumers to benefit from exciting technologies like virtual reality, advanced telehealth applications, and autonomous vehicles. Estimates from internet providers predict around 30% of consumers in the U.S. will have 5G wireless subscriptions by the end of 2021.
The success of 5G in the U.S. will be determined by how quickly Washington can make mid-band spectrum available for commercial use. Luckily, policymakers can take steps this year to increase the availability of mid-band spectrum. In addition to keeping the October auction on track, Congress would be wise to create a spectrum auction schedule to remove the uncertainty associated with investing in mid-band. These measures will ensure mid-band spectrum will be widely available, accelerating 5G deployment and consumer access.
Despite the recent success in expanding access to mid-band spectrum, the U.S. still only had around 70 megahertz available for commercial use at the end of 2020. Japan, South Korea, and the United Kingdom, on the other hand, made available 382 megahertz by the end of 2020, nearly five times more.
Because of the capabilities that 5G services will give consumers, other countries have focused on making more mid-band spectrum available to internet providers overseas. While low-band travels long distances but is suitable for voice applications and while high-band travels very short distances but at very high speeds, mid-band spectrum is the “goldilocks spectrum” – ranging between 1 and 6 gigahertz and having a combination of improved distance capabilities at reasonably higher speeds. Mid-band spectrum will provide increased potential for 5G access overseas, making it essential for the U.S. to keep its scheduled auctions on track for the benefit of its consumers.
Streamlining the process of delivering 5G to consumers in this country will require the creation of a spectrum auction schedule for future auctions of mid-band waves. The U.S. currently lacks a clear schedule for auctioning and repurposing mid-band spectrum, making the current process for connecting consumers as much as a decade long. A spectrum schedule would speed up the process by placing the development of mid-band infrastructure on a clear timeline, giving providers the confidence providers need to invest and allowing mid-band spectrum to be auctioned faster.
Speeding up the auction process would also speed up the deployment of 5G, resulting in consumers reaping the economic benefits that come with 5G sooner. A report from Boston Consulting Group estimates the direct economic impact from 5G deployment would be up to 1 million new jobs and $500 billion in GDP over the next decade, with indirect impacts from deployment being even higher. To guarantee that this growth is met, Congress must act to make certain these steps are taken.
The success of 5G networks in the United States will depend on the successful deployment and redeployment of the new mid-band spectrum. Regardless of the nation’s recent success with mid-band spectrum, the U.S. still lags far behind other nations. Keeping auctions on track and creating a clear schedule would go a long way to ensure the U.S. reaches its mid-band goals.
Failing to take these steps will cause the U.S. to fall behind other nations worldwide at the detriment of increased benefits and capabilities to consumer.
This was published in The Economic Standard.