Tuesday, August 30, 2011

More Spectrum Will Make 4G an Economic Force Multiplier

Deloitte's new report, "The Impact of 4G Technology on Commercial Interactions, Economic Growth and U.S. Competitiveness," previews many of the technological, economic, and social benefits that we should expect from 4G mobile broadband. According to the report, "U.S. investment in 4G networks could fall in the range of $25-$53 billion during 2012-2016." Applying industry-specific multipliers, the report cites estimates that "conservatively, these investments could account for $73-$151 billion in GDP growth and 371,000-771,000 new jobs."

Moreover, "the GDP and job estimates do not take into account the wider effects of applying 4G technology, such as the production of new devices and applications; the creation of new companies; and better ways of working, living, and learning. Any attempt to quantify those effects confronts the difficulty of anticipating the way entrepreneurs will make use of the new platform — just as in the early days of 3G mobile broadband it was impossible to foretell how social networks, smartphones, and tablets would emerge." But given the improved performance characteristics of 4G, it’s a safe bet that 4G will lay the foundation for another generation of breakthrough innovations.

In terms of enhanced capabilities, the report points out that, "[f]rom a technical standpoint, 4G promises three benefits over 3G: increased throughput, lower latency, and stronger security.One result is a reduced cost per megabit." Moreover, "4G networks combined with cloud computing and other advanced technologies have the potential to facilitate interactions among all components of the ecosystem, and thereby accelerate the process through which supply and demand signals interact and create new economic activity."

We have been consistently urging Congress, NTIA, and the FCC on in their efforts to locate and auction more unencumbered spectrum for flexible commercial use. And the report similarly deems it a U.S. policymaking priority to ensure sufficient spectrum supply allocated by free market mechanisms. The report gives a nod to the NTIA/FCC joint effort to free up 500MHz of additional spectrum in the next decade. But it warns that 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." Thus, "there is a need to find additional ways to make better use of available spectrum and to unlock more."