Like deck chairs on the Titanic: why spectrum reallocation won't avert the coming data crunch but technology might keep the wireless industry afloat.

AuthorLove, Brian J.

Introduction

Americans have a seemingly insatiable appetite for wireless bandwidth. Global mobile data traffic has grown at an annual rate exceeding 140 percent each year since 2008, and it is predicted to increase another 26-fold by 2015. (1) Spurred by increasing adoption of smartphones and tablet computers, growth in the U.S. has outpaced worldwide averages, with domestic wireless providers like AT&T reporting a 30-fold increase in traffic between 3Q 2009 and 3Q 2010 alone. (2) For the foreseeable future, it seems, mobile data demands will continue their exponential growth as users increasingly access multimedia, especially long-form HD video, and other data-intensive applications via mobile devices. (3)

Unfortunately, the capacity of the nation's wireless networks is not infinite. According to wireless providers, within spectrum bands allocated for commercial broadband use, increased competition for scarce bandwidth among mobile users will eventually lead to service bottlenecks that degrade network performance or worse. (4) With more and more wireless users clamoring for more and more bandwidth each year, wireless providers warn that the wireless industry will soon lack the spectrum resources sufficient to satisfy users' demands, a looming "spectrum crunch" (5) that many promise will stagnate an industry that grossed almost $160 billion in 2010. (6)

To date, scholars studying the root causes of spectrum overcrowding have focused exclusively on the efficiency of FCC regulations dividing ownership of the airwaves. (7) Scholarly consensus suggests that the upcoming crunch is predominantly, if not purely, the result of the FCC's failure to place spectrum in the hands of society's highest value users. Accordingly, calls for the government to transfer spectrum licenses from presumed low value users--namely, over-the-air television broadcasters and the government itself--to wireless providers have completely dominated policy debates. For years, virtually every scholarly article analyzing spectrum policy has called for the FCC to strip TV broadcasters of some or all of their spectrum allocation (8) and for the government to open some of its own reserves for public use, (9) which the government recently pledged to do. (10) Consensus, it would seem, has been established among economists, communications law scholars, lobbyists, and governmental regulators that spectrum reallocation can solve the problems created by ever increasing demand for bandwidth-intensive wireless services in the U.S.

In this Commentary, we explain why this consensus is wrong. Put simply, spectrum reallocation plans offer far too little, far too late. Problems stemming from exponential growth in mobile data needs (11) cannot be resolved by purely cellular solutions that scale linearly. spectrum reallocation, therefore, is at best a temporary quick fix, not a long-term solution. If reallocation advocates get their wish, spectrum licensed for wireless broadband will increase by less than 200 percent. (12) stacked against predictions of a 26-fold increase in mobile traffic in the next five years, a 3-fold expansion of available spectrum is exposed for what it is: woefully inadequate. Thus, while scholarship calling for spectrum reallocation is not per se unfounded, (13) this issue is almost certainly moot if current data trends continue or accelerate. At this time, proposals to reallocate spectrum among wireless providers, TV broadcasters, and government users--well-meaning as they might be--serve only as distractions that divert attention from other, potentially viable solutions.

In our view, now is the time for spectrum reallocation proposals to take a backseat to policy initiatives that encourage the rapid deployment of emerging network technologies that promise exponential growth in network capacity. (14) Rather than a "spectrum" crunch caused by inefficient resource management at the FCC, the wireless industry is first and foremost facing a "data" crunch caused by its own unwillingness to adopt new technologies capable of matching the high throughput mobile users require. (15) Instead of waging lengthy battles against current spectrum holders which so far have led to minimal gain, scholars and government regulators should hasten efforts to bring from theory to practice emerging technologies that promise drastic improvements in wireless data throughput and cross-technology solutions that bypass crowded spectrum altogether. (16) until policy efforts are redirected toward fostering the rapid development of cutting edge network technology and such technologies are well on their way to widespread adoption, proposals to reallocate spectrum look an awful lot like well-intentioned plans to rearrange the deck chairs on a sinking ship.

  1. The Spectrum Reallocation Debate

    Pointing to annual reports on the meteoric rise of cellular traffic, scholars have argued for the better part of a decade that the FCC should permit wireless broadband providers to takeover spectrum allocated to incumbents like television broadcasters and government users. (17) According to these scholars, the FCC has performed poorly as a steward of the nation's spectrum resources by failing miserably to place spectrum in the hands of society's highest value users. In this oft-repeated scholarly narrative, many non-cellular spectrum holders are portrayed as entrenched oligopolists. For example, television broadcasters are said to have successfully lobbied over the years to keep much of the same bandwidth they have controlled since the 1950s (18)- -a "Mother Lode of underutilized radio spectrum" that may be "worth over $100 billion in license value and at least ten times that amount in Consumer Surplus" (19)- -even though they have lost considerable market share over the years to cable and satellite TV providers. (20)

    Accordingly, scholars have repeatedly called upon the government to take back spectrum from some existing holders, reallocate that spectrum for wireless broadband, and distribute licenses to wireless providers via auction. (21) Advocates of spectrum reallocation won a victory of sorts in March 2010 when the FCC unveiled a National Broadband Plan with the stated goal of transitioning 500 MHz of public and private spectrum to the wireless broadband pool over the next decade. (22) Advocates were unable, however, to convince regulators to divest TV broadcasters of the 294 MHz of spectrum currently allocated to the remaining forty-nine television broadcast channels. (23)

    If the National Broadband Plan was supposed to end debate about spectrum redistribution, it has failed to do so. Since plans were announced last year, calls for reclamation of broadcast spectrum have grown more frequent and urgent. (24) For now, it seems, public discussion of spectrum policy is firmly anchored to ongoing debate about the relative value of broadcast television.

  2. Viable Solutions Must Scale Exponentially

    With scholars and policymakers single-mindedly focused for years on spectrum reallocation, it seems that few stopped along the way to consider whether reallocation could actually quench the nation's thirst for high throughput data service. While an infusion of spectrum may have seemed like a viable solution to keep the wireless industry afloat in the early- to mid-2000s when the vast majority of wireless traffic was generated by basic-feature cell phones, even a cursory review of current data reveals that spectrum reallocation alone is not a viable solution for an industry now dominated by smartphones, tablet computers, and mobile-broadband-equipped laptops, each of which consume 24, 122, and 515 times as much bandwidth as a cell phone, respectively. (25)

    The absence of this fact from policy debates is surprising given how easy it is to see why reallocation is bound to fail. (26) Consider a simple thought experiment. Suppose advocates for reallocation get their wish and FCC regulators reclaim all 294 MHz currently licensed to television broadcasters and make it immediately available to wireless providers. (27) Additionally, in a fit of civil-minded generosity, the government agrees to increase its National Broadband Plan goal from 500 to 660 MHz and makes that spectrum available immediately, rather than slowly over the next decade.

    Combined with the 547 MHz already available for mobile broadband use, (28) wireless providers now have access to some 1.5 GHz. In other words, even in a rather fanciful best-case scenario, spectrum reallocation offers at most an immediate 3-fold increase in available spectrum. Keeping in mind that traffic increases have averaged over 2.5-fold per year for three years running and are projected to increase as much as 26-fold by 2015, it is easy to see why even aggressive reallocation is like putting a Band-Aid on a bullet hole. Put simply, solutions must scale. As long as demand for wireless bandwidth continues to increase at an exponential rate, any discrete influx of spectrum to existing cellular systems and architectures, even one almost 800 MHz in size, will soon be dwarfed by the ever-rising tide of mobile traffic.

  3. Technology Solutions to the Real Problem

    What the data crunch calls for, then, are solutions that promise exponentially scalable increases in the efficiency of existing spectrum resources. Fortunately, several slowly emerging communications technologies promise just such a solution, if they can swiftly be put into practice.

    1. Spectral Efficiency and Cross-Technology Solutions

      Several technologies under development promise to drastically increase the capacity of our airwaves. So-called "cognitive radio" is one such example. (29) This technology utilizes "self-aware" radios, which can detect changes in the propagation environment, interference conditions, user demands, and the like, and adapt accordingly to achieve optimum performance. (30) Fully developed cognitive radio technology may well permit multiple networks to co-exist at the...

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