Report IDs Key Stats on Wireless Infrastructure, But Regulatory Threat Looms

On April 16, the Wireless Industry Association (WIA) released its report, "Wireless Infrastructure By The Numbers: 2023 Key Industry Statistics." As the title indicates, WIA's report provides a high-level look at the overall number of cell towers, macro sites, and small cell facilities that mobile service providers use to offer mobile broadband Internet access services. According to WIA's report, as of 2023, there were 153,400 cellular towers in operation in the U.S., in addition to nearly 245,000 macrocell sites and 202,100 outdoor small cells in operation. The report found that there also were nearly 776,000 indoor small cell nodes in use as of last year. These figures surely have grown since 2023.  

Moreover, WIA's report found that "[t]he U.S. cellular industry spent $11.6 billion building additional capacity and coverage into the nation’s wireless networks in 2023." Another interesting observation in the report is that "[m]ore towers and cell sites are being deployed but the amount spent building networks is flat" because "[a]s wireless network technologies mature and evolve, network equipment becomes more efficient and cost effective." Also, "[t]he amount spent on maintaining and operating the cellular networks increased but build spending dropped" due to larger networks increasing the necessary maintenance costs.

 

The deployment and operation of 4G LTE and 5G wireless networks depends on private market investment remaining strong. Subjecting mobile broadband networks to public utility regulation – as the FCC proposes in its Draft Order to be considered for a vote at the agency’s April 25 meeting – would undermine the ability of wireless infrastructure owners and operators to use their property and generate returns. This would reduce incentives to build and upgrade such infrastructure. The 2018 Restoring Internet Freedom Order found that the imposition of public utility regulation under the now-repealed 2015 Title II Order inhibited investment: 

The Commission has long recognized that regulatory burdens and uncertainty, such as those inherent in Title II, can deter investment by regulated entities and, until the Title II Order, its regulatory framework for cable, wireline, and wireless broadband Internet access services reflected that reality. This concern is well-documented in the economics literature on regulatory theory, and the record also supports the theory that the regulation imposed by Title II will negatively impact investment. The balance of the evidence in the record suggests that Title II classification has reduced ISP investment in broadband networks, as well as hampered innovation, because of regulatory uncertainty. The record also demonstrates that small ISPs, many of which serve rural consumers, have been particularly harmed by Title II. And there is no convincing evidence of increased investment in the edge that would compensate for the reduction in network investment.  

Imposing restrictions on 5G network slicing – either by outright prohibitions or by regulatory uncertainty under the vague "general conduct" standard contained in the Draft Order – also would be detrimental to wireless innovation and investment, including investment in the physical infrastructure that supports 5G uses. For more on this topic, see Free State President Randolph May's and Senior Fellow Andrew Long's April 2 Perspectives from FSF Scholars, "The 'Network Slicing' Debate Exposes How Title II Will Kill Innovation." Also, check out FSF President May's FSF Blog post from April 18: "Don't."

New Report Highlights the Economic Impact of the "4G Decade"

If you're old enough to remember a time before cellphones, you likely have a general appreciation of the transformative role that mobile connectivity has played in American life. But have you ever tried to express that impact in economic terms? A July 29 study, prepared by CTIA — The Wireless Association and Recon Analytics, does just that. And the takeaways are impressive.

"The 4G Decade: Quantifying the Benefits," as its name suggests, details the impact of 4G wireless technology on investment, Gross Domestic Product (GDP), jobs, and consumer welfare during the ten-year period that began in 2010. One data point, in particular, drives home the overarching theme: based upon contributions to GDP ($690.5 billion in 2019 alone), were the U.S. wireless industry its own country, it would rank as the 21st largest economy in the world.

Some additional conclusions worth noting:

• Wireless providers invested $261 billion in 4G networks over the last ten years;
• During that same timeframe, wireless GDP grew by 253 percent — and was responsible for nearly 10 percent of the total increase in U.S. GDP;
• 4G networks support 20 million American jobs — one out of every six — making wireless the top industry in terms of job contribution; and
• Prices have dropped significantly, saving consumers $130 billion annually. The same unlimited plan that cost on average $114 in 2010 today can be purchased for just $65 — while speeds, coverage, and device capabilities all have improved substantially.

As noted by Roger Entner, Analyst and Founder of Recon Analytics, "[t]he trajectory of U.S. 4G development should serve as a guide to consider — and to enable — the full transformational power of the coming 5G decade."

On the topic of 5G's potential economic impact, James E. Prieger, Professor of Economics and Public Policy at the Pepperdine University School of Public Policy and a Member of the Free State Foundation's Board of Academic Advisors, recently weighed in. In a June 1 Perspectives from FSF Scholars, "An Economic Analysis of 5G Wireless Deployment: Impact on the U.S. and Local Economies," he concluded that:

8.5 million jobs will be created over 2019-2025 compared to a counterfactual 4G-only world, with an average of 1.2 million new jobs each year. The workers filling these new jobs will earn more than $560 billion during that time, create $1.7 trillion in additional output, and add over $900 billion to U.S. GDP.

Report Highlights Mobile Wireless Advancements and the Future of 5G

For info-rich insight into the current state of the mobile wireless market as well as a glimpse at the 5G future, check out GMSA's report, "The Mobile Economy, North America 2019." The report identifies ongoing subscriber migration from 2G and 3G to 4G and, increasingly, to 5G, and the immediate economic opportunities offered by 5G fixed wireless residential broadband and 5G enterprise services. Additionally, the report charts recent and projected capital expenditures and job creation directly as well as indirectly related to wireless services. 

Opensignal Report Shows Mobile Broadband is Ramping Up in Rural America

My Perspectives from FSF Scholars paper, "Resurgence in Broadband Deployment Vindicates FCC's Pro-Investment Policies," focused on data cited in the FCC's 2019 Section 706 report and the Commission's policy focus on closing the digital divide. To that end, encouraging broadband deployment progress in un-served and underserved rural areas is particularly important. In "Mobile Experience in Rural USA– An Operator Comparison," Opensignal's Francesco Rizzato assesses rural broadband availability by mobile broadband provider and according to different geographic and performance metrics. The March-to-June 2019 data cited in this Opensignal report provides another indicator that 4G mobile broadband (including service with 10 mbps/3 mbps speeds) is continuing to be reasonably and timely deployed to all Americans. 

For more, check out Opensignal's report.

The Commission can continue to encourage investment in broadband infrastructure to rural areas by following through on policy initiatives identified in that Perspectivespaper. Additionally, the Commission ought to clarify the law regarding collocations and modifications to existing cell sites. For more on that, see my Perspectives paper, published today, titled "FCC Should Clear Legal Obstacles to Wireless Infrastructure Upgrades."

Advanced 4G LTE Services Still Growing in America

A press release by 5G Americas summarizes recent deployment data for 4G LTE and 5G networks worldwide, including in North America. Although 5G deployment rightly deserves attention, 4G LTE mobile broadband networks still are still growing. According to 5G Americas, LTE represents 88% of mobile connections in North America as of June 2019, up 82% from the year before. The U.S. and Canada had 459 million LTE connections by the second quarter of this year. Additionally, "[t]he United States alone had 130 percent LTE market penetration in June – up from 126 percent in March." In addition to serving consumers, LTE networks provide low-powered Internet-of-Things connectivity for business enterprises. According to 5G Americas President Pearson: "LTE continues to increase the number of new connections while networks are continuously being enhanced with new technology… The innovative technologies which underpin 5G performance will also improve 4G LTE networks through the foreseeable future."

My Perspectives from FSF Scholars paper, "Resurgence in Broadband Deployment Vindicates FCC's Pro-Investment Policies," cited data points from several reports indicating that broadband, including mobile broadband, continues to be reasonably and timely deployed to all Americans. The early 2019 data cited by 5G Americas also appears to indicate a continuing positive deployment trajectory, as more Americans gain access to 4G LTE services, and at higher speeds. A projected surge in 5G connections will follow.