Why the vaunted spectrum auctions won't cut it
Explosive growth in mobile data usage means smartphones and tablets will need much more spectrum than the recently approved auctions can provide.
Editors' note: This is a guest column. See Morgan Reed's bio below.
In the Broadway musical "Oliver!," orphaned Oliver Twist famously holds out his empty bowl and asks, "Please sir, may I have some more?" For those of us who make mobile applications, we feel like Oliver, holding out our virtual bowl, begging for more spectrum to fill the hungry bellies of our customers.
App developers cheered when the divided Congress passed legislation providing for incentivized spectrum auctions while freeing up unlicensed spectrum. This is a step in the right direction, but it didn't fill our belly. While it's great that Washington finally tackled the spectrum issue, it's still not the only solution needed to meet the explosive increase in demand that is just around the corner. Cisco forecasts that in five years mobile data traffic will grow to 18 times today's level. By the time an auction takes place and the spectrum is put to use, we will already need more.
That makes it crucial that we administer this new spectrum in the most effective way possible. Above all, we must maximize our use of the limited resources that become available. Unfortunately, this may not be a simple task. There are already those who suggest that the incentive reallocation process should limit the amount of spectrum available for licensed use or that special preference should be given to unlicensed usage. Unfortunately, this would only exacerbate the problem.
Look, I love unlicensed spectrum. I personally cut my teeth in the Linux world working on wireless routers using 802.11 (what we now call Wi-Fi) for cheap do-it-yourself routers. But while there are some exciting innovations taking place in unlicensed spectrum--from near field communications (NFC), low-cost personal area networks (PAN), and the conversion to "the Internet of things"--it is shortsighted to single out "unlicensed" as the bleeding edge of innovation.
For instance, Wi-Fi has been incredibly valuable to consumers and device makers, creating a standard with great backwards compatibility. But Wi-Fi is really more of a supplemental service. Some places have great coverage and solid speeds, but many others are just plain terrible. I know that I am not alone in feeling like hotel and coffee shop Wi-Fi services have become scattershot at best. So while Wi-Fi has been a critical Band-Aid in keeping mobile apps functional while the big carriers are crushed by massive demand for mobile data, it can't solve the entire problem.
And ultimately that's what unlicensed spectrum has been great at doing: lowering costs and allowing devices to innovate, but not actually innovating in transmission of information to everyone over the wireless spectrum.
During the same time that Wi-Fi moved from 802.11b to 802.11n, mobile phones moved from covering roughly 5 million customers to more than 5 billion people. Wi-Fi speeds may be faster, but licensed spectrum gets mobile apps into more hands than anything else.
For those of us developing mobile apps (and for consumers eager to enjoy the benefits of new innovations) we need more than what unlicensed spectrum alone gives us. We need huge dollars poured into new towers, guys in hard hats digging holes in the ground to lay new fiber, and billions invested in making the network itself ubiquitous, secure, and reliable. We need to ensure that the spectrum needed to operate a licensed network is made available for auction--and that every willing purchaser is able to participate.
Everyone needs skin in the game to keep mobile growing. Last year, Verizon and AT&T each invested around $15 billion dollars in their networks, and we'll need them to spend at least that much annually in the foreseeable future. Moreover, the kinds of innovative business deals that customers will rely upon (guarantees of quality, security and ubiquity) can only exist where the carriers can actually be responsible for the network they are guaranteeing.
The mobile marketplace is growing exponentially, providing a much-needed lift to our flagging economy, but without more spectrum it will soon hit a wall. As we move forward to meet the steep challenge of addressing this scarcity, we need to find solutions that free up additional spectrum, both licensed and unlicensed, for the next wave of mobile innovation. If we do that, we won't end up with orphans in the mobile soup kitchen, begging for just one more byte.