Future U.S. Competitiveness Requires More Licensed Spectrum

On May 6, CTIA published a report, "How Licensed Spectrum Fuels U.S. Competitiveness." CTIA's report makes a case for why more full-power licensed commercial spectrum – especially in the mid-band – is needed to ensure that the U.S. remains a competitive leader and realizes its full economic potential in the years ahead.

CTIA's report emphasizes wireless-enabled U.S. economic gains in international export-focused sectors, including agriculture, transportation, as well as pharmaceuticals, health care, and life sciences. Its overview of the economic benefits of wireless to manufacturing, machinery, and equipment is particularly insightful:

• "Wireless connectivity is a critical innovation-enhancing input that boosts productivity across several key traded sectors, while constitutive parts of the wireless industry, like equipment, components, chips, devices, and software, are also themselves exported around the world."

•  "A healthy U.S. 5G ecosystem makes for a stronger U.S. semiconductor industry" to fabricate chips used to power smartphones and other wireless devices.

• "U.S. firms enjoy over 25 percent of global handset market share and dominate smartphone operating systems worldwide" due partly to early US leadership in 4G LTE networks. 

• The U.S. is "a significant player in development of the intellectual property underlying wireless communications. With this IP, U.S. firms are major contributors to wireless communications standards, which are then used around the world."

• "Researchers estimate the global 5G value chain, including network operators, providers of underlying technology and components, device and equipment manufacturers, and 5G application developers, will contribute $3.6 trillion in economic output by 2035."

• "A significant component of this economic potential comes from efficiency-driving insights from Internet of Things (IoT) deployments… More spectrum will ensure 5G networks have the capacity to support a deeper integration of IoT sensors and devices to further enhance use cases across industries."

• "Increasing U.S. manufacturing productivity—squeezing more from each dollar invested—is essential to making American manufacturing more globally competitive, and how to do this is a key consideration for policymakers who are looking to encourage manufacturers to produce more goods in America."

• "The Manufacturing Institute surveyed manufacturing leaders on the impact of 5G on their business, finding manufacturers believe 5G can help lower costs by an estimated average of 38%, while increasing machine productivity by an estimated 42% and workforce productivity by 41%."

• "This productivity impact comes from many 5G applications, such as smart factory connectivity, real-time insights from digital twins, and enhanced training and maintenance capabilities."

However, the report cites other report findings that the U.S. faces a "spectrum crunch." According to the report: "Researchers estimate that by 2027, U.S. operators will need an additional 400 megahertz of full-powered mid-band license spectrum, even accounting for optimistic growth in infrastructure, spectral efficiency, and Wi-Fi offload." This projected deficit increases to almost 1,500 MHz by 2032. By contrast, "China has already allocated 1460 megahertz of mid-band spectrum for 5G." That amount is 3.2 times more than the U.S.  Also, "[r]esearchers estimate that China may dedicate up to a total of 1660 megahertz of mid-band spectrum for 5G in the coming years."

 

CTIA's report calls for more full-power, mid-band spectrum for wide-area commercial 5G networks to ensure strong U.S. competitiveness against leading foreign rival China. It makes a call to fast action to license suitable sections of the lower 3 GHz and 7/8 GHz bands for full-power networks. As the report states, "policymakers should rely on tried-and-true auctions to identify those entities best positioned to generate the greatest value out of the limited frequencies available."

 

Free State Foundation President Randolph May and Senior Fellow Andrew Long reiterated the need for a replenished spectrum pipeline in January 2024 public comments to the NTIA for its Implementation Plan for the National Spectrum Strategy. The importance of re-establishing the FCC's statutory authority to conduct competitive bidding spectrum license auctions as well as the importance of more spectrum availability – both licensed and unlicensed – were discussed during the "Hot Topics in Communications Law and Policy" panel at the Free State Foundation's Sixteenth Annual Policy Conference. The panel video is available online.