Everyone’s starting to realize that the 547 megahertz of spectrum that can be used for mobile broadband isn’t enough to accommodate the burgeoning number of consumers and businesses falling in love with smartphones, tablet computers such as Apple’s iPad, and other wireless communications devices.
“If we don’t act, the (wireless) consumer experience will be very frustrating,” Federal Communications Commission Chairman Julius Genachowski said in an interview. “The congestion will be very significant.”
That means more dropped calls, slower transmission speeds, dead zones — and potentially high prices, with the heaviest mobile service users paying the most.
AT&T said this week that it agreed to pay $39 billion for T-Mobile to avoid getting caught in a spectrum crunch.
And you’ll probably hear a lot more about airwave policy as the federal government prepares to coax some spectrum from one of the most potent forces in politics: television broadcasters. They collectively control some of the biggest blocks of airwaves but don’t want to lose their ability to transmit video over the air and for free.
“This spectrum crunch exists in a few major metropolitan areas,” says National Association of Broadcasters CEO Gordon Smith. “It exists in Los Angeles, and it exists in New York. For someone living in Las Vegas or Kentucky, why should their over-the-air television service be obstructed so you can get a faster download of an app in New York City?”
The debate is intensifying, though, because demand for wireless broadband is soaring faster than you can download a movie from Netflix or stream music from Pandora. It will be 60 times greater in 2015 than it was in 2009, Cisco Systems projects.
“We have seen over the last four years, on our network alone, mobile broadband traffic has increased by 8,000%,” AT&T CEO Randall Stephenson said this week. The company expects that demand to grow as much as 1,000% over the next five years, he adds.
A lot of that is because of the growing sophistication of mobile devices. A conventional wireless feature phone might only make it possible to play games or listen to music, in addition to handling voice calls and text messages. A smartphone, though, also enables users to watch videos and listen to turn-by-turn driving directions.
The result: A smartphone typically uses 24 times as much spectrum capacity as a regular cellphone. Nearly 66 million people own smartphones now, and that’s growing fast, research firm ComScore reports.
And tablets — which provide many of the same features of a smartphone but on a much bigger screen — can use 122 times more spectrum capacity as an ordinary cellphone. More than 82 million people will have a tablet in 2015, up from 10.3 million last year, Forrester Research projects.
“It would be nice if we had a warehouse of spectrum that wasn’t being used that we could put on the market to meet this demand,” Genachowski says. “But we don’t.”
Wireless broadband goals
Still, President Obama pledged in his State of the Union Address in January to do what’s needed to help the country take advantage of the revolution in mobile communications.
“Within the next five years,” Obama said, “we will make it possible for business to deploy the next generation of high-speed wireless coverage to 98% of all Americans.”
AT&T general counsel Wayne Watts told Wall Street analysts that the company’s proposed deal with T-Mobile would “help to achieve the president’s wireless broadband goal.” The company says that by combining its resources with T-Mobile’s, it could offer wireless high-speed Internet to an additional 46 million people.
It remains to be seen whether that argument will resonate at the FCC and Justice Department. The two agencies must decide whether the combination of AT&T and T-Mobile — reducing the number of major wireless carriers to three — would serve the public interest without making mobile services substantially less competitive.
In any case, the Obama administration is determined to redeploy spectrum. Last year, the president called on the FCC and the Commerce Department’s National Telecommunications and Information Administration to find 300 MHz over five years, and 500 MHz over the next decade, for mobile and fixed broadband services. That would be about 25 times the spectrum devoted to FM radio.
The agencies are studying how spectrum is being used to see where it can be reassigned. For example, some might come from frequencies controlled by the government or from implementing technologies that would enable current services to be handled in less airspace.
But the FCC hopes to kick-start its effort by securing 120 MHz from television stations. The agency wants some stations to voluntarily give up their spectrum in return for a share of the proceeds when the frequencies are auctioned.
The hope is that this deal would appeal to many marginal TV stations, including those that feature home shopping or religious programming.
They might lose only a few viewers if they become pay-TV services, the thinking goes: About 90% of viewers subscribe to cable or satellite TV, which offer local broadcast programming in addition to pay-TV channels such as CNN, USA and ESPN.
“It’s a win-win approach,” Genachowski says. “It frees up spectrum fast. … And it’s a win for broadcasters, who would get fair compensation for getting out of the business, or going to cable only, or sharing spectrum with another broadcaster in the market.”
Although two stations can co-exist on one channel, they might not both be able to offer the best high-definition signals or, potentially, 3-D TV.