The Bandwidth Crunch is Real: Wide Public/Private Agreement
The Federal Communications Commission (FCC), Cellular Telephone Industry Association (CTIA), GSMA, private industry and the White House are all in agreement that there is a looming bandwidth crunch that would pose a threat to the future and financial stability of the $3.1 trillion global wireless industry1. North American wireless revenues alone account for $670 billion of this industry, which is 3.5% of the region’s GDP2.
In addition, bandwidth shortages would curtail the overall growth of wireless related businesses which produce a greater economic impact per dollar invested than any other business sector(3).
Numerous technical reports from sources including the White House and The Brattle Group, a technology think tank and economist firm, have highlighted the need for additional spectrum3.
The President’s Council of Advisors on Science and Technology (PCAST) raised the alarm on the imminent bandwidth shortage as early as 2010, as a result of which the White House directed the FCC ‘to make available a total of 500 MHz of federal and non-federal spectrum over the next 10 years, suitable for both mobile and fixed wireless broadband use.5’
Additionally, the June 2015 report6 by the Brattle Group concluded that at least 350 MHz of new spectrum would be needed by 2020 to meet minimum bandwidth demands. Significantly, this study drew on data obtained from the FCC, Cisco Systems, and the CTIA.
A Spectrum-Only Solution Will Not Prevent the 2020 Bandwidth Crunch
However, of the 500 MHz recommended by PCAST, the FCC identified 300 MHz of spectrum which could be used(7). But as of mid-2015, only 98.5 MHz had actually been made available for wireless use(4).
This shortfall persists even as a 2012 PCAST report called for an additional 1,000 MHz of spectrum (8).
These failures mean that deficits are projected begin appearing in 2017 and deepen so that a massive 350 MHz shortage is projected by 2020.
None of the spectrum from the 2015 or 2016 auctions is likely to be available by 2020 because it can take from 13 to 18 years before new spectrum is deployed to consumers(9).
Wireless spectrum demands now exceed supply and are expected to continue to do so for the foreseeable future, absent new technology that can alleviate the shortfall.
“By 2019, mobile users are expected to increase by 21 million to 290 million, mobile connections will increase by over 600 million to over 1 billion, and mobile video traffic will represent 75 percent of total traffic(10).”
Experts in private industry, government, and academia are in consensus that unless a solution is developed, this impending bandwidth shortage will have measurably adverse impacts on the U.S. and global economy.
Considering the far-reaching impacts of a looming bandwidth crunch, solutions, in the form of new technologies that will increase accessible bandwidth, are crucial.
Next in this series of spectrum market backgrounders: The Massive Economic Consequences of a Bandwidth Crunch.
- “Global mobile wireless economy,” GSMA (Groupe Speciale Mobile Association), page 7. Report available at http://www.gsmamobileeconomy.com/. Site accessed and report downloaded May 27, 2016
- “Global mobile wireless economy, North America,” GSMA (Groupe Speciale Mobile Association, http://gsmamobileeconomy.com/northamerica/. Accessed May 27, 2016.
- (3a) “The Wireless Industry: Revisiting Spectrum, the Essential Engine of US Economic Growth”, Recon Analytics, http://reconanalytics.com/2016/04/the-wireless-industry-revisiting-spectrum-the-essential-engine-of-us-economic-growth/, Downloaded .pdf, accessed May 29, 2016
- “Mobile Broadband Spectrum: A Vital Resource for the U.S. Economy.” by Coleman Bazelon Giulia McHenry.
- “Presidential Memorandum: Unleashing the Wireless Broadband Revolution, June 28, 2010, “The White House, https://www.whitehouse.gov/the-press-office/presidential-memorandum-unleashing-wireless-broadband-revolution, Accessed May 27, 2016
- “Substantial Licensed Spectrum Deficit (2015-2019): Updating the FCC’s Mobile Data Demand Projections.” by Coleman Bazelon Giulia McHenry. At p. 1
- “Connecting America: The National Broadband Plan,” Federal Communications Commission, Chapter 5, March 2010, at p. 10.
- “Realizing the full potential annual report on of government-held spectrum intellectual property to spur economic growth enforcement,” Executive Office of the President, President’s Council of Advisors on Science and Technology, July 2012, p. iii.
- “Spectrum Timelines,” whitepaper, CTIA, http://www.ctia.org/docs/defaultsource/default-document-library/072015-spectrum-timelines-white-paper.pdf., No longer available at that URL, but .pdf obtained from archived sources.
- “Cisco Visual Networking Index (VNI) Forecast: Mobile Data Traffic Update, 2014- 2019 (Focus on U.S.),” Cisco, February 3, 2015, at slide 6. By Robert Popper.