The “Spectrum Crisis”

 Last spring, FCC Chairman Julius Genachowski gave a speech in which he highlighted the growth of wireless broadband in America and the looming “spectrum crisis.”  In his speech, the FCC Chairman stated that:

 “[T]he clock is ticking on our mobile future. The FCC is an expert agency staffed with first-rate employees who have been working on spectrum allocation for decades – and let me tell you what the career engineers are telling me. Demand for spectrum is rapidly outstripping supply. The networks we have today won’t be able to handle consumer and business needs.”

It is obvious to an American consumer that growth in the use of mobile wireless services has been phenomenal.  Recall that the blockbuster mobile phone, the Razr, was introduced only in 2004.  Prior to that time mobile phones were essentially the only mobile wireless devices and they were basically just phones.  Mobile phones models of that era had a life of almost two years, reflecting the fact that there was little need for consumers to upgrade to new models with increased capabilities because essentially the only available capability was voice phone calls.  Later some rudimentary text messaging became available and what seemed a huge innovation at the time, a phone that was also a camera.  Look how far we have come.  Today you can post and receive updates on social networking sites like Twitter and Facebook from your smartphone; you can watch live TV events or listen to free personalized radio that plays your favorite music; you can scan documents which you can then email or fax to others, obtain customized maps and directions, or use your smartphone to connect your laptop to the Internet.

 All of this additional capability involves additional use of wireless spectrum to upload and download data from mobile wireless devices.  As the figure below shows, the new devices and new capabilities have greatly multiplied our spectrum requirements. 

Data Traffic Generated by Mobile Wireless Devices 

 Source: Cisco Visual Networking Index: Global Mobile Data Traffic Forecast Update, 2011–2016, White Paper

 
When one combines the spectrum requirements of the new and innovative mobile wireless devices now in use in the United States, the picture is one of exponential growth in spectrum usage.  As you can see from the figure below, mobile data traffic in North America is expected to almost double each year in the near future even under the most conservative estimates. In a March 27, 2012, statement, FCC Chairman Julius Genachowski acknowledged “the exponential increase in consumer demand for spectrum.” 

Growth of Mobile Data Traffic in North America 

Source: FCC, “Connecting America: The National Broadband Plan,” Chapter 5 – Spectrum.

 

Global Mobile Data Traffic, Exabytes per month (1 EB 1 bn GBs)

 

 Source: Cisco Visual Networking Index: Global Mobile Data Traffic Forecast Update, 2011–2016, White Paper.

 
There is clearly increasing demand for spectrum by  mobile wireless service providers.  In considering whether  a “crisis” exists, the question is then whether there is additional supply.  In order for a mobile wireless provider to use a particular part of the electromagnetic spectrum  to provide service, it must be licensed to use that spectrum by the FCC.  This licensing regime ensures that different service providers do not use frequencies that interfere with each other or with other users of the spectrum, such as the Department of Defense, television broadcasters, and others.

In the longer run, there are perhaps technological innovations that will allow more efficient use of the spectrum currently allocated for mobile wireless services; however, the dramatic increases in demand are happening now.  In the short run, the only viable way to increase supply is for the FCC to allocate additional spectrum for mobile wireless services.  The FCC has received approval from Congress to hold an “incentive auction,” whereby current holders of spectrum such as television broadcasters are provided an incentive  to return some of their spectrum to the FCC for reallocation.  However, the timeline for the incentive auction requires only that it be completed by the year 2020.  Moreover, while wireless service providers can make more efficient use of contiguous spectrum blocks,  it is not clear whether the current  incentive auction would result in spectrum being made available in contiguous blocks.

Mobile Wireless Spectrum and Growth in Traffic

 

 Sources: Cisco Visual Networking Index: Global Mobile Data Traffic Forecast Update, 2011–2016, White Paper; FCC, “Connecting America: The National Broadband Plan,” Chapter 5 – Spectrum.  Note: North America usage is available from 2011 onward; usage for years 2008-2010 was calculated assuming North American usage growth equals global usage growth.

 
In conclusion, I believe there is currently a spectrum crisis.  This crisis exists because of dramatic increases in demand for mobile wireless services, the nature of electromagnetic spectrum as a limited resource, and the facts that wireless carriers can do nothing to increase their access to this critical input without the approval of the FCC and are limited in the short run in terms of what can be done with technology to make increased use of the spectrum currently available to them.  Of course, the possession of spectrum alone will not improve the issues caused by the spectrum crisis without significant infrastructure investment, but that investment cannot begin until steps to reallocate spectrum are taken.

 


This entry was posted on Friday, June 29th, 2012 at 9:30 am and is filed under Spectrum, Telecom. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.

Leave a Reply

Your email address will not be published. Required fields are marked *

You may use these HTML tags and attributes: <a href="" title=""> <abbr title=""> <acronym title=""> <b> <blockquote cite=""> <cite> <code> <del datetime=""> <em> <i> <q cite=""> <strike> <strong>