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The Podium

Monday, November 07

Running Out of Oxygen

By Broderick Johnson

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Lately, one word has dominated real estate at the intersection of technology and government policy. Chances are you’ve heard it even if you aren’t a tech-head or policy wonk.

That word is spectrum.

It’s been called the oxygen of wireless communications. The precious resource behind everything from smartphones to garage door openers. And at the moment, America is facing a spectrum problem. Specifically, a shortage — a “spectrum crunch,” as FCC Chairman Julius Genachowski has called it.

The leading cause of this “crunch” is the rise of mobile broadband. According to a startling new report from the Global Information Industry Center, unless more spectrum is made available to keep up with increasing demand for wireless data, one of America’s most vibrant industries risks grinding to a halt.

Penned by technology industry strategist Michael Kleeman, “Point of View: Wireless Point of Disconnect” [PDF] offers up a lot of numbers that are at the same time impressive and scary. For example:

”Upwards of 95 million Americans now have active smartphones and wireless-enabled PDA’s and the volume of data traffic on U.S. networks is expected to increase by 1,800 percent over the next four years.”

For any other industry, an increase of 1,800 percent would be cause for celebration. But for America’s wireless providers, such a projected spike in traffic sets off warning flares. Kleeman likens the increase to a third of drivers swapping out “voice cars” for “18-wheeled ‘data’ trucks” — in other words, just think of the coming gridlock.

To help frame why this increase is occurring, Kleeman looks to what is arguably the most popular mobile device in America today: Apple’s iPhone. As he writes:

We all now understand that an iPhone uses more bandwidth than a non-smartphone — equivalent to 96 non-smartphones by one estimate. What we are now starting to learn is how fast the data consumption per smartphone is growing. The average amount of traffic per smartphone in 2010 was 79 MB per month, up from 35 MB per month in 2009.

The result—wireless data traffic jumped by more than 50% from 2009-2010. And according to AT&T, just one of the U.S. carriers offering Apple’s device, there were over one million activations of the iPhone 4S on its network in less than a week.

Start taking all these numbers to the back of the envelope, and the current course and speed leads directly to an iceberg — unless more spectrum can be made available.

And it needs to be made available quickly. By most estimates, it can take as long as seven years for the spectrum allocation process — from inventory to auction to implementation — to occur. Remember that 1,800 percent increase in traffic in the next four years projection you read earlier?

Kleeman’s report offers much more information, all of it reinforcing the bleak forecast of demand soon outpacing capacity on America’s wireless networks. And while it’s encouraging that spectrum is currently a big buzzword in Washington, what’s needed now most of all is action.

That means more oxygen for wireless as soon as possible. And it means allowing the free market to acquire more spectrum in order to keep pace.

As the unprecedented rise of mobile broadband shows, there’s a reason wireless communication has been called one of the very bright spots in America’s current economy. But as Kleeman’s report highlights, unless policies are able to keep up with the speed of technology, explosive demand can quickly become too much of a good thing.

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