Avoiding the Wireless Traffic Jam

By Jamal Simmons

Anyone whose smart phone has dropped a call has seen evidence that wireless data use is surging in the US, so much that we are rapidly running out of spectrum, the bandwidth necessary to support our mobile needs.

The evidence is everywhere that America’s mobile economy desperately needs an influx of this valuable, limited resource. Start with the new Cisco report, which estimates North American mobile Internet traffic will increase from 119 terabytes/month in 2011 to 493 in 2013 and 1,964 in 2016 (see chart below).

Cisco is hardly alone in documenting our rapid mobile migration. Last July, a global analysis found that mobile networks in North America are filled to 80 percent capacity. 

The same study found that nearly 40 percent of individual mobile base stations already face capacity issues. In laymen’s terms, that’s when your call fails or your smartphone’s Pandora stream suddenly stops because the cell tower’s radio transmitter can’t process all the data from nearby subscribers.

Meanwhile, Americans continue to buy smartphones at an astonishing rate.  We activated about 40 million smartphones in December and ESPN recently claimed that its mobile audience has surpassed 20 million.

Apple’s iPhone business alone is larger than all of Microsoft. 

Against this flood of evidence about our swelling mobile data demands, spectrum auctions have been mired in legislative procedure. Thankfully, Congress recognized the urgency of the issue and included language in the payroll-tax extension bill that ensured critical spectrum auctions would be conducted in an open process by not allowing the Federal Communications Commission to exclude some wireless providers from participating — perhaps even those who would be willing to pay the most for spectrum.

Almost 20 years ago, the FCC set aside certain spectrum auctions for “designated entities” as part of its 1996 auctions. All other companies were barred.

The result: More than half of the 493 licenses from that auction were later returned to the government for non-payment.

Given that auction proceeds go to the U.S. Treasury (in other words, taxpayers), Congress has delivered a win for consumers. Not to mention economic growth, innovation, and broadband deployment. The legislation means a true level playing field — all auctions open to all qualified companies — and in the end, that’s the best course we can take to keep our wireless economy vibrant and growing.