In today's world when you turn on your smart phone or your tablet, or both, you can expect to see your Facebook page, your stock portfolio, or your granddaughter (who lives on the opposite coast) using Skype. This kind of activity has become so normal it is difficult to accept that this summer we will only be celebrating the fifth anniversary of the introduction of the iPhone – which led to an explosion in wireless activity.
One of the most common complaints of wireless users is the increasing traffic jams they find. Where a page of the Wall Street Journal or a photo from a friend normally loads in a second or two, it may take much longer or not load at all in places of high wireless use. And this problem is only getting worse by all forecasts and estimates of future mobile data traffic growth.
The wireless industry has invested hundreds of billions of dollars over the past ten years to keep up with the increased traffic and has been one of the few bright spots in an otherwise sluggish economy. But better technology and more inventive use of wireless networks have their limits without more spectrum – the lifeblood of the wireless industry.
Just as civil engineers can put meters on highway ramps to control the rate of entering cars to enhance overall traffic flow, there comes a point when an increasing number of cars attempting to drive on a known stretch of highway overwhelm the system, resulting in bumper-to-bumper traffic. A highway designed for traffic to safely travel at 60 miles per hour is supporting traffic driving at perhaps 5 to 10 miles per hour.
A similar problem is facing the wireless industry where the lanes on the information highway are spectrum (which, by the way, is a finite resource) and the cars are our wireless devices.
Many of us can remember cell phones when all they did was make and receive phone calls, but those days are long gone. Consumer demand for wireless services and products is rapidly accelerating. A study from Cisco found that average smartphone usage tripled in 2011, and between 2011 and 2016, global wireless data traffic will increase to 18 times more than what it is today.
The pending impact on consumers and on our devices is real. It’s not hard to imagine a day when demand for wireless spectrum exceeds supply – slowing our devices and stopping innovation in its tracks.
Smartphones, tablets, and other data-hungry devices are increasingly becoming a vitally important part of the way we conduct our personal and professional lives. So much so that in October, CTIA (Cellular Telecommunications Industry Association) announced there are now more active wireless devices than there are Americans. And, from January 2011 to June 2011 alone, wireless data traffic increased 111 percent.
The reality of the spectrum crunch is fast approaching as FCC data points to 2013 as the year where we transition from a spectrum surplus to a spectrum deficit. AT&T’s CEO is already on the record as saying, “In a capacity-constrained environment, we will manage usage-based data plans, increased pricing and managing the speeds of the highest volume users.”
Clearly the need for spectrum is great, and the FCC must do everything in its power to get spectrum into the hands of those who value it most and will use it to serve consumer demand.
Congress recently authorized the FCC to conduct incentive auctions – marking an important step in addressing the looming spectrum crunch. In order to ensure optimal outcomes for consumers (and the U.S. Treasury), auctions must be conducted in an open and fair way where all interested bidders are allowed to participate.
Auction design aside, it will take years to bring the auctioned spectrum to market. In light of that, the FCC should support and encourage secondary market transactions – such Verizon Wireless’ proposed transactions with SpectrumCo and Cox. Transactions like these are squarely in line with the FCC’s goal to put unused and underused spectrum to higher-valued uses, which will lead to better consumer experiences.
Consumers are adopting wireless broadband like never before. New products and services are rampant in the marketplace, and we can only imagine what’s to come in the 4G world.
Alleviating the spectrum crunch will require open spectrum auctions, creative solutions for repurposing government spectrum, and some common-sense solutions like approving secondary market spectrum sales. Let’s apply an “all of the above” approach to prevent traffic jams on the information super highway.
Steve Forbes is the editor-in-chief of Forbes magazine and chairman of Forbes Media.
Steve Forbes is Chairman and Editor-in-Chief of Forbes Media. His latest book, with co-author Elizabeth Ames, is "Money: How the Destruction of the Dollar Threatens the Global Economy – and What We Can Do About It (McGraw-Hill May 13, 2014).