U.S. faces spectrum crunch by 2014: Freeing 275 megahertz of spectrum could save $120B

The United States will need another 275 megahertz of spectrum by 2014 to keep up with mobile broadband demand, according to a white paper the Federal Communications Commission just released. Making that 275 megahertz of spectrum available for mobile broadband would save $120 billion in capital expenses, the study concluded.
The FCC released the Omnibus Broadband Initiative technical white paper as part of its recommendation to free up 500 megahertz of spectrum in the next 10 years, part of the National Broadband Plan and a presidential directive. The paper discusses device usage, the impact of new cell tower builds and the economic importance of wireless broadband usage, among other things.
Usage by device type
“Devices with enhanced functionality tend to consume more data,” according to the white paper. “This is demonstrated in estimates of mobile data use during the second half of 2009 by independent industry analyst Validas. BlackBerry, with superior e-mail utility, consumes twice the amount of data monthly as a normal mobile handset. The iPhone, useful for mobile web browsing and applications, consumes five times the data monthly as BlackBerry. And aircards, facilitating a full mobile computing experience, consume five times more data monthly than the iPhone. These devices, aggregated across the network, lead to significant total mobile data consumption.”
The study goes on to say that usage could double almost every two years or less across all device types, and that when laptops access the Internet solely using wireless technology, growth is similar to fixed networks. “The average monthly usage per subscriber on the Clearwire network, which many consumers use as a substitute for wired broadband, is already 7 GB. Continued growth of this device segment is likely to contribute significantly to the growth of mobile data traffic.”
Cell-site growth
The white paper discusses how building new cell sites and operating cell sites more efficiently can offset the need for new spectrum. As such, it projects flat growth levels of cell sites at about 7% over the next five years, in part because much of the macrocellular networks already have been built, so cell-site growth will focus on increasing capacity, not coverage.
“This is a more conservative approach than projecting into the future the flattening growth seen in recent years, since new ‘infill’ cell sites that add capacity are a substitute for new spectrum. Additionally, we assume all future cell-site growth will emphasize capacity over coverage, which is also conservative from the standpoint of estimating spectrum needs since new coverage sites do not address capacity constraints.”
Economic impact
“Even with the conservative set of assumptions used in this model, it is apparent that the nation faces the prospect of a spectrum shortage within the next five years,” according to the white paper, which also notes it traditionally has taken between six and 13 years to free up new spectrum. While the study didn’t project further out than five years, it said it is reasonable to extrapolate that the nation will need to keep releasing spectrum to keep up with mobile broadband demand.
“The explosive growth in mobile communications is outpacing our ability to keep up,” said FCC Chairman Julius Genachowski. “If we don’t act to update our spectrum policies for the 21st century, we’re going to run into a wall – a spectrum crunch – that will stifle American innovation and economic growth and cost us the opportunity to lead the world in mobile communications.”
Wheeler to head new advisory council
The FCC also announced it formed a new Technological Advisory Council, charged with identifying areas of innovation and developing informed technology policies to help America remain competitive.
Tom Wheeler, managing director, Core Capital Partners, will chair the council and work with various FCC staff to develop and manage the program.