The Smartphone Boom

By Brad

How much has the iPhone, which was released just five years ago, revolutionized the cellphone market? As Phil Goldstein of Fierce Wireless reports, this much:

Roughly half of all Americans now own a smartphone, according to new data from the Nielsen Company, marking a watershed moment in adoption. According to Nielsen, 49.7 percent of Americans owned a smartphone in February, up from 36 percent in February 2011 and 29 percent in October 2010.

According to Nielsen, the upsurge in growth has been driven by both the increased number of smartphone models in the market and customers’ increasing preference for smartphones over feature phones. More than two-thirds of those who bought a new mobile device in the last three months chose a smartphone over a feature phone, according to Nielsen.

Such an unprecedented rate of adoption for smartphones is definitely a good thing. But Nielsen’s findings (more on the report here) highlight the undeniable fact that for the good times to keep rolling, more spectrum for mobile broadband is absolutely critical.

Bringing More Spectrum to the Market

By Rick Boucher

Today to the National Telecommunications and Information Administration’s (NTIA) released the report “An Assessment of the Viability of Accommodating Wireless Broadband in the 1755-1850 MHz Band.”

The NTIA’s proactive efforts to identify spectrum available for commercial deployment deserves recognition. Quickly making more of this limited, valuable resource available to fuel consumers’ smartphones, laptops and tablets is crucial for supporting the American ingenuity of small business owners, students, teleworkers and innovators across our nation.

Consumers count on using their mobile-broadband-powered devices to be more productive, utilize educational resources, access better health care, and tap into job opportunities. It is essential that policy makers bring more spectrum to the market now so that wireless providers can meet consumer demand by expanding and enhancing their wireless broadband networks.

Mobile Broadband’s Legislative Black Hole

By Brad

In a post for The Hill‘s Congress Blog, our Honorary Chairman Rick Boucher warns of the “legislative black hole” when it comes to mobile broadband legislation:

If we are going to keep the wireless industry growing and encourage the build-out of a more powerful Fourth Generation wireless infrastructure across America, spectrum auctions must be properly designed. Rigging the system so that key stakeholders are barred or discouraged from participating, or spectrum availability is selectively curtailed, could cost our country billions in much-needed revenue and deal a severe blow to innovation from one of our most vibrant industries. A recent study from Deloitte Consulting estimates that deploying 4G networks across America could create as many as 771,000 jobs. That’s a lot of jobs, but it can only happen if wireless providers have the spectrum they need to power the networks they build.

You can read Boucher’s full piece at The Hill.

Crafting a More Effective FCC

By Rick Boucher

Today, the House of Representatives is voting on the “FCC Process Reform Act,” a bill put forward by Rep. Greg Walden [R-OR] aimed at bringing the Commission’s process up to speed with the pace of innovation. In anticipation of the vote, Rep. Walden took to the pages of Politico in order to express why reform is so urgently needed. As he writes:

[P]rocess at the FCC is broke and does need fixing. This is not the fault of any one administration or any one FCC chairman. Indeed, the current chairman, Julius Genachowski, has improved the commission’s process in a number of ways. But it has fallen into sloppy habits over the years, and more needs to be done.

Sometimes the FCC acts before thoroughly examining whether regulation is needed. It’s now time to stop putting the regulatory cart before the horse. That’s why this bill requires the FCC to survey the marketplace, identify a failure and conduct a cost-benefit analysis before imposing rules.

The commission now frequently proposes to regulate without publishing the specific wording of a tentative rule. So public input can’t be specific. The result is rules that could prove less well-vetted and more likely to have unintended consequences. My bill would require the FCC to publish the specific text.

Not even the House of Representatives operates that way.

There’s no denying the FCC plays a vital role in American government. But as with most government agencies, readiness to act is always an issue. As we all know, technology moves at breakneck speed. New innovations, new disruptions to business models, arrive each and every day. Smart reforms, like those presented by Rep. Walden, are a vital first step in helping the Commission remain effective.

From allocating new spectrum for mobile broadband, to examining proposed mergers between companies aimed at better serving consumers, the FCC has a lot on its plate. If the Commission has any hope of keeping up with the blistering pace of technology, reform is absolutely necessary.

The Spectrum Gulf

By Brad

In a piece on technology and the economy for The American, Bret Swanson of Entropy Economics (he’s also an IIA Broadband Ambassador) highlights a startling fact that speaks directly to America’s current spectrum crunch:

Broadband, wireless, and data centers are the platform on which our entire digital—and increasingly non-digital—economy are built. U.S. broadband is healthy—we generate more data traffic per user than any nation but South Korea. And yet the innovation cycle craves ever more bandwidth.

However, the government owns 61 percent of the best airwaves, while mobile providers own just 10 percent. In February, Congress finally approved auctions of some underused spectrum and warned the Federal Communications Commission not to micromanage who can bid on spectrum, how much a bidder can buy, and what business models buyers can pursue. Economists Robert Shapiro and Kevin Hassett estimate that advances in mobile Internet technologies boosted U.S. employment by 400,000 per year between 2007 and 2011. In the best circumstances, auctions take years, so further FCC spectrum mischief could slow one of America’s fastest-growing industries.

Recent efforts by Congress and the FCC to free up more spectrum for mobile broadband are certainly encouraging. But the massive gulf between the amount of spectrum the government owns vs. the wireless industry clearly shows the government is not moving at the speed of technology — and that’s a recipe for disaster.

The Great Smartphone Adoption

By Brad

Ever since the iPhone launched the smartphone revolution, the U.S. has led the world in adoption and use of the devices and mobile broadband. But as Dan Graziano of Boy Genius Report points out, another nation has outpaced us as of late:

Mobile analytics firm Flurry on Wednesday announced that sometime in February, activations for iOS and Android devices in China overtook the United States for the first time ever. In January 2011, the U.S. accounted for 28% of the world’s total iOS and Android device activations, while China only accounted for 8%. China is now the world’s fastest growing smartphone market, however.

Assembling a Spectrum Task Force

By Brad

Yesterday, the FCC announced the creation of a task force aimed at guiding upcoming spectrum auctions for wireless. As The Hill‘s Brendan Sasso reports:

In its first step toward implementing spectrum auctions authorized by Congress, the Federal Communications Commission (FCC) announced a task force on Wednesday to study the issue.

Ruth Milkman, a special counsel to the agency’s chairman, will head the task force on an interim basis.

From FCC Chairman Julius Genachowski’s statement on the task force (PDF):

“I’m confident our staff is up to the challenge. What we’ll see is an implementation process that will be inclusive and participatory; that will be guided by the economics and the engineering; and that will seek to maximize the opportunity to unleash investment and innovation, benefit consumers, drive economic growth, and enhance our global competitiveness. When the incentive auction of the TV bands is complete, we expect to have a healthy broadcast sector, and a strong, robust, competitive, and world leading mobile industry.

Looking at Dish’s Plans

By Brad

Via Andy Vuong of the Denver Post, the FCC is set to tackle Dish’s plans to enter the mobile broadband market this week:

The federal rulemaking process that will determine when or whether Dish Network can use its recently acquired spectrum for a competitive mobile broadband network is expected to kick off Wednesday and could be completed by summer’s end, according to Dish executives.

The Douglas County-based company also estimates that building a new network could cost $5 billion and take three years or longer, though a joint project with a wireless carrier could significantly trim both.

Free Broadband, With a Catch

By Brad

At the Huffington Post, Peter Svensson looks at the return of ‘90s Internet provider NetZero:

United Online Inc. announced Monday that it will offer free wireless Internet service under its NetZero brand, the one that started the free dial-up phenomenon in 1998. The company is backing up the plan with TV, print and online advertisements.

While free mobile broadband access sounds great, Svensson reports there are some snags for consumers:

The free accounts are limited to 200 megabytes of data per month_ enough for some email and Web surfing, but little else. Half an hour of full-screen streamed video will eat up the whole month’s allotment. By comparison, AT&T Inc.‘s cheapest wireless data plan costs $14.95 per month for slightly more data – 250 megabytes per month – but that plan is only available for tablets with built-in cellular modems.

When the monthly traffic allotment is exhausted, NetZero cuts off Internet access until the start of the next month, and users are prompted to upgrade to the paid plan.

Light Dimming for LightSquared

By Brad

Over at GigaOm, Kevin Fitchard reports beleaguered mobile broadband startup LightSquared has received more bad news:

Sprint on Friday terminated its partnership with LightSquared, not only denying the would-be operator its biggest 4G customer, but also blocking LightSquared’s path to building an LTE network.

LightSquared once had ambitious plans to deploy a 4G LTE network nationwide, but interference issues with GPS service all but scuttled the deal.

Seeing Stars with Mobile Jobs

By Jamal Simmons

There’s little doubt that Apple will make a big splash tomorrow at the Yerba Center. But the bigger story is Apple’s announcement that its mobile operating system has “created or supported” a remarkable 210,000 U.S. jobs.

Let’s put that number in perspective: the iPhone and iPad didn’t even exist five years ago. The company’s mobile App Store only opened its cyber-doors in 2008. 

Now, the iOS alone sustains more jobs than the entire population of San Bernadino. Or Boise. Or Des Moines.

This is a modern economic success that’s virtually unparalleled — and it’s also not just an Apple success. Sure, Apple has been at the forefront. The company also just marked the 25 billionth download from its App Store. (If you’re interested, it was a user in Qingdao, China who downloaded the Disney game, “Where’s My Water.”)

But globally, according to a report last fall, Android has overtaken Apple in total app downloads.

As FCC Chairman Julius Genachowski said earlier this year, “Our apps economy is the envy of the world.”  (For the record, Genachowski’s favorite app is an astronomy app that uses his iPhone’s built-in GPS to present a screen view of the stars overhead.  He says it helps his daughter understand astronomy.)

So what’s the problem? As a recent five-part series on CNN reported, this country is running dangerously low on making airwaves available to handle all this wireless data.  That threatens a future of slower progress and higher phone bills.

Genachowski himself said earlier this year, “This invisible infrastructure is the backbone of a growing percentage of our economy and our lives. [A lack of available airwaves] threatens American leadership in mobile and the benefits it can deliver to our economy and our lives.”

In an effort to address the looming spectrum crunch, last month, President Obama signed a bipartisan bill into law designed, in part, to facilitate the next round of wireless auctions.

This law is an important step. Not only does it mandate much needed spectrum auctions—the last one was held in 2008—but it also legislates against too much regulatory red tape. Open auctions will ensure that the companies with the best plans and best service will thrive.

Historically, the Commission hasn’t always heeded this and on the government’s coffers have paid the price.

This obviously is no time for regulatory experiments. The stakes are too high.   

Number of the Day

By Brad

25 billion — yes, billion — is the number of apps that have been downloaded from the Apple App Store. Not bad for a service that launched less than four years ago.

As it turns out, the milestone app was downloaded by a customer in China, which prompted GigaOm’s Erica Ogg to write:

This is just too perfectly fitting, that a customer in a major city in China ends up symbolizing the reach, influence and internationalization of Apple’s mobile App Store over the four years since its opening…

Smartphone Nation

By Brad

According to a new report from the Pew Internet & American Life Project, America is quickly becoming a smartphone nation:

Nearly half (46%) of American adults are smartphone owners as of February 2012, an increase of 11 percentage points over the 35% of Americans who owned a smartphone last May. Two in five adults (41%) own a cell phone that is not a smartphone, meaning that smartphone owners are now more prevalent within the overall population than owners of more basic mobile phones.

Considering the first iPhone was released just five years ago, the rate of smartphone adoption is pretty amazing. It also shows just how important mobile broadband now is in our daily lives.

Speaking of Mobile Devices

By Brad

CNBC reports (via Matt Burns of TechCrunch) that Apple is set to unveil the third generation of its popular iPad next week in New York. Rumors abound that the new version will be 4G LTE compatible. If so, the next leap forward in mobile broadband is about to happen.

Update: According Zach Epstein of Boy Genius Reports, Apple has sent out iPad 3 event invites for March 7 in San Francisco, not New York.

Changing Times

By Brad

Just how much has mobile broadband — and mobile devices like smartphones and tablets — changed the computing landscape in a short amount of time? Enough that one of the world’s leading PC makers is getting out of the business. As PC Pro’s Nicole Kobie reports:

Dell no longer sees its business as making and selling PCs, focusing instead on enterprise IT.

The claim follows Dell posting full-year results showing growth in enterprise, but a struggle in consumer sales.

Getting it Right

By Brad

Broadcasting & Cable’s John Eggerton reporting on a speech made by FCC Commissioner Robert McDowell yesterday at the Mobile World Congress event in Barcelona:

McDowell was not opposed to Congress limiting the FCC’s ability to condition the auction. He has long complained of the conditions on the FCC’s 2008 auction of the first tranche of broadcast spectrum reclaimed in the DTV transition. Those are widely believed to have discouraged bidders and reduced revenue from the auction.
“The lesson learned from that auction and others is that when governments attempt to conduct social and economic engineering by foisting unnecessarily complicated mandates on the use of spectrum, their efforts frequently backfire,” McDowell said. He said he thought the FCC could get it right this time.

The Challenge of the Spectrum Crisis

By Brad

Over at CNet, Larry Downes has a must-read article on America’s looming spectrum crisis and the challenges ahead:

Short- and medium-solutions to the spectrum crisis are possible, but won’t come easily. Avoiding disaster in the mobile ecosystem requires a combination of smart technology investments, innovative business practices, and policy reforms likely to offend vested interests.

Each is valuable on its own, but coordination will be crucial if we are to improve spectral efficiency enough to keep mobile users going while we wait for the incentive auctions to run their course.

Even if we get through the next few years, it’s clear that staving off future crises will require radical changes to spectrum management. The patchwork quilt woven by 85 years of quixotic and often political decision-making has left U.S. airwaves dangerously inflexible and unnecessarily fractured. The accelerating pace of technological innovation is on a collision course with command-and-control assignment of spectrum. Something has to give.

Read the whole thing.

A Win for American Consumers

By Jamal Simmons

Today’s final article in David Goldman’s series on the spectrum crunch for CNN Money shows that he gets it — there is no “catch-all fix.” It is promising, though, that wireless carriers are actively seeking solutions to the spectrum shortage that will enable continued innovation in the industry and allow them to better serve their customers. These users’ quality of service on their iPhones, Androids, BlackBerries and tablets will significantly improve when wireless carriers, as pointed out by Goldman’s piece, bid on spectrum at auction and kick the build-out of networks into high gear.

Yet another benefit: this investment by wireless companies means more U.S. jobs. Wireless companies winning spectrum is a win for American consumers and the American economy — the FCC should act quickly to set these open incentive spectrum auctions in motion.

“We’re Going to Need More Spectrum”

By Brad

Yesterday, our Honorary Chairman Rick Boucher participated in a spectrum event hosted by TechAmerica. The National Journal‘s Juliana Gruenwald was there, and offers a report:

“This is a continual process,” said Boucher, who headed the House Energy and Commerce Communications and Technology Subcommittee before losing re-election in 2010…. “Next on the block for auction to the wireless carriers will probably be re-purposed government spectrum. Don’t know how quickly that will come but to meet the kinds of demands that we see with these predictions from the FCC for mobile data use, we’re clearly going to need more spectrum.”

Expanding Wireless Networks is Good for All

By Bruce Mehlman

At CNN Money, David Goldman has launched a week-long series examining America’s wireless capacity crunch. It’s well worth the read, as it identifies important issues currently facing the FCC and wireless companies. But I would add that whether you are a big user of smart phones or don’t use one at all, providing spectrum to expand wireless networks is good for all of us because it will create jobs and adds billions of dollars in private sector investment to the economy. 

Clearly the carriers expect to make money. No return, no investment. But over the past decade that system has led to massive improvements in consumer choices, investment, innovation and falling prices per megabit, per message and per minute. From e-health to e-learning to e-gov to the App economy, spectrum is the oxygen for this incredibly vibrant and competitive market.