Feature Article

September 28, 2012

4G Needs More Spectrum

The growing instability of all legacy revenue models, across print, video, music, audio, television and communications industries means that regulation has to incorporate, as a primary objective, the fostering of innovation and investment in network facilities. That is true for the latest fourth generation of mobile networks running Long Term Evolution as well.

A new International Telecommunications Union (ITU) report notes that, “Service providers have struggled with legacy inherited laws and regulations that award licenses per service, and many companies have taken the issue to court – for example, cable TV companies seeking to provide telephone service over their networks, and telephone companies wanting to upgrade their networks to offer video programming services and compete with the cable companies.”


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“More modern approaches to regulation may be needed – such as converged regulation, simplifications to the licensing regime or unified licensing, where one unified license can allow any telecommunication company to provide any service, as long as consumer rights are protected, and the competitiveness of markets is not threatened,” the International Telecommunications Union broadband report suggests.

The ITU study notes that policy-makers and regulators now must “stimulate” demand for broadband and promote investment in infrastructure. That also requires a “balance” of technologies and policy approaches appropriate to specific situations, including more wireless effort.

The growth rate in global mobile data traffic is projected to grow 60 percent annually from 2011 to 2017, which will result in a 15-fold increase in traffic by 2017, mainly due to video traffic.

“Such an explosion in data traffic requires more spectrum,” the ITU says.  In this regard, policy-makers and regulators can help to create a supportive environment and encourage investment and ensure sufficient availability of quality spectrum, the ITU says.

Analysts at Deloitte concur with that assessment, and in fact urge more rapid clearing of spectrum for 4G mobile network use in the U.S. market.

U.S. investment in 4G networks could fall in the range of $25 billion to $53 billion during 2012-2016; conservatively, these investments could account for $73 billion to $151 billion in GDP growth and 371,000 to 771,000 new jobs, Deloitte argues.

The lower levels of investment and economic benefits are consistent with a “baseline” or “business as usual” scenario in which U.S. 4G deployment proceeds at a moderate pace and the transition from 3G to 4G stretches into the middle of the decade, Deloitte argues.

Under these conditions, U.S. ?rms would be vulnerable to incursions by foreign competitors capitalizing on aggressive efforts in their home markets to deploy 4G networks and develop 4G-based devices and services, Deloitte also warns, however.

In fact, Deloitte analysts believe that even an additional 500 MHz of allocated 4G spectrum would be insufficient to keep up with demand. “The Federal Communications Commission and Commerce Department are working to make 500 megahertz of spectrum available for wireless broadband in the next 10 years, but even if that goal is achieved, it could be difficult to keep U.S. commercial wireless spectrum supply and demand in balance as interest in new 4G offerings grows,” Deloitte argues.

Past experience with 3G networks suggests the value of allocating more spectrum, and easing rules about its use, Deloitte says. From 1994 to 2000, FCC auctions tripled the amount of spectrum available for commercial mobile services.

“However, spectrum caps limited U.S. carriers to 55 MHz per market, while abroad most European and Asian carriers were allowed to own 80 to 90 MHz,” Deloitte says.  In 2003, thespectrum caps were removed, while U.S. carriers also were permitted to buy and sell spectrum.

Those moves prompted a 250 percent increase in investment and a 300 percent increase in jobs in the mobile market, Deloitte argues. 

Want to learn more about today’s powerful mobile Internet ecosystem? Don't miss the Mobility Tech Conference & Expo, collocated with ITEXPO Austin 2012 taking place Oct. 2-5 2012, in Austin, TX.  Stay in touch with everything happening at Mobility Tech Conference & Expo. Follow us on Twitter.




Edited by Brooke Neuman


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