Report Forecasts Impending Spectrum Crisis, Calls for More Licensed Mid-Band Capacity

On March 27, CTIA released a report by Accenture titled "Securing the Future of U.S. Wireless Networks: The Looming Spectrum Crisis." It predicts a near-term shortfall in available spectrum to meet growing demand, which could adversely impact wireless users during peak times as soon as next year. To avert that crisis, the report calls on Congress, the NTIA, and the FCC to make more mid-band spectrum between 3.3-8.5 GHz available for full-power licensed commercial use.  

The Accenture report estimates that U.S. consumers' mobile wireless data of over 100 Gigabits in 2023 was almost double data traffic volumes for 2021, and it cites a wireless industry estimate data traffic per smartphone will increase more than 250% by 2029. The FCC has not auctioned new commercial spectrum licenses since 2022. Without new spectrum inputs to support 5G services, including fixed wireless access (FWA) and emerging artificial intelligence (AI) applications, the report concludes that "[t]he U.S. will reach an available spectrum deficit of 401 MHz by 2027 and 1423 MHz by 2032." 

 

According to the Accenture report, the looming spectrum deficit means that "network capacity will meet only 77% of data demand during peak hours by 2027, and this will worsen to networks meeting only 27% of peak demand by 2035." The report finds a future deficit will cause as much as $1.4 trillion in lost U.S. gross domestic product (GDP) by 2035 – unless more spectrum is put into full-power licensed commercial use for 5G. 

 

There is a widely-recognized need that more spectrum needs to be repurposed from government use or occupancy to commercial use. However, intense disagreements exist over how much spectrum should be reallocated on a licensed basis versus an unlicensed basis. There are also diverging views over whether particular bands should be licensed on an exclusive basis to commercial licensees or on a shared basis with government users. Accenture's report provides an important contribution to the ongoing spectrum policy debate. The report's analysis and conclusions deserve thoughtful consideration.

 

Spectrum policy was also a topic of discussion and debate at the Free State Foundation's Seventeenth Annual Policy Conference – #FSFConf17 – held on March 25, in Washington DC. Be sure to check out videos featuring Senator Ted Cruz's keynote address, touching on his proposed legislation to replenish the spectrum pipeline, as well as the panel on "New Directions in Communications Policy." 

Report Shows U.S. Needs to Allocate and Harmonize More Mid-Spectrum for Wireless Use

On February 7, CTIA released a report by Accenture titled "Advancing U.S. Wireless Excellence – The Case for Global Spectrum Harmonization." The report itself is excellent in describing both the economic benefits of allocating mid-band spectrum for commercial wireless use and the benefits of harmonizing U.S. spectrum allocations in the mid-band range with other nations. 

But to reap those benefits, the U.S. needs to maintain its leading role by making more mid-band spectrum available. In its report, Accenture found that, as of 2023, the five leading countries in mid-band spectrum availability dedicated an average of 652 MHz to commercial wireless use. But the U.S. faced a 202 MHz mid-band spectrum deficit compared to those nations. Accenture projects that in the year 2027, the five leading nations will dedicate an average of 970 MHz of mid-band spectrum to commercial wireless use. But due to the lack of spectrum in the pipeline in the U.S., our nation's spectrum deficit will grow to 520 MHz in 2027.

 

Accenture identifies the 3.3-3.45 GHz band, the 4.4-4.94 GHz band, and the 7.125-8.5 GHz band as ideal for commercial use and global spectrum harmonization. As explained in the report, spectrum harmonization could benefit U.S. consumers and businesses to the tune of tens of billions of dollars: 

Spectrum harmonization can standardize network equipment and wireless device production, resulting in less market variation in radio requirements for these technologies. With more harmonization, fewer variations of network radios and wireless devices must be produced, and complex devices that support a wide range of frequencies can be simplified. These efficiencies result in cost savings for end users and drive additional downstream benefits (e.g., accelerated network deployment, earlier adoption of industry use cases, etc.) unlocking approximately $23B-$44B in value for industry and consumers over the next 10 years. Additionally, harmonization will improve network performance through minimized downtime, reduced interference, and better roaming.

And the Accenture report estimates that the overall economic benefits of industry expansion, innovation, and job creation from future U.S. leadership in a more harmonized wireless ecosystem total between $125 billion and $155 billion over a decade. 

But the U.S. will miss out if it fails to promptly replenish the spectrum pipeline with mid-band spectrum for licensed commercial wireless use. On January 2 of this year, Free State Foundation Randolph May and Senior Fellow Andrew Long submitted public comments to the NTIA regarding the agency's implementation of the National Spectrum Strategy. As explained in FSF's comments, although the NTIA's November 13, 2023 Strategy identifies 2,786 MHz of spectrum for study, that is no guarantee that a single megahertz actually will be dedicated for commercial wireless use and the Strategy "fails to tackle the difficult work necessary to rationally balance government and commercial demands for this high-value, limited resource." FSF's comments conclude: "The reality… is that NTIA must embrace the challenging work required to identify – and in fact repurpose – government-held spectrum that would better serve our nation's interests were it put to commercial use, whether on a licensed or unlicensed basis. And do so in a timely manner." 

For more, see my November 2023 blog post, "NTIA Releases National Spectrum Strategy, But Pipeline Remains Empty."

Accenture: Repurposing Three Bands Will Solve Spectrum Deficit for Wireless

In an insightful report released today and titled "Spectrum Allocation in the United States," Accenture examined current use and future demands for spectrum. Accenture called attention to the small amount of mid-band spectrum dedicated to commercial wireless use compared to the amount being used by the federal government. As 5G networks grow and mobile data usage continues to sharply increase, a larger stock of spectrum will be needed for licensed commercial wireless use. Notably, Accenture identifies three band candidates for spectrum repurposing – the lower 3 GHz band, the 4 GHz band, and the 7/8 GHz band – that could supply needed for licensed use by 5G wireless services.  

Among the most eye-opening aspects of Accenture's report is massive amount of spectrum that currently under the control of the federal government and the comparatively small amount that is available for licensed commercia wireless use. Accenture found that 61% of all lower mid-band spectrum – located between 3 GHz and 8.4 GHz – or 3,300 MHz is dedicated to government use. By comparison, 1,910 MHz is available for unlicensed use and just 270 MHz (about 5% at present) is available for licensed commercial wireless use. In its report, Accenture found that the federal government has access to about 12 times more lower mid-band spectrum than commercial wireless services. 

Spectrum in the 3-to-8.4 GHz range is particularly ideal for 5G services. Yet the supply of that spectrum for licensed commercial wireless use is lagging. Accenture rightly calls it a "deficit" in spectrum allocation for commercial wireless services, as GSMA has projected that mobile data traffic per smartphone user will increase 3.6 times in North America by 2027. That is an increase from about 15GB per smartphone user per month in 2021 to 52GB per user in 2027. Significantly increased spectrum supply is needed to accommodate 5G services, including Fixed wireless access (FWA) services that can help close up the digital divide and industrial connections. 

 

Accenture's report hones in on three promising bands that can be repurposed to furnish spectrum resources that will enable Americans to realize the full potential of 5G: the 3.1 to 3.45 GHz band, the 4.4 to 4.49 GHz band, and the 7.125 to 8.46 GHz band. When combined with about 180 MHz of C-band spectrum that is expected to go into commercial wireless services at the end of 2023, those bands could yield upwards of 1,600 MHz of spectrum for licensed commercial wireless services. 

 

Be sure to check out Accenture's report on U.S. spectrum allocation. 

Accenture Reports on the Potential for 5G Fixed Wireless Access in Rural America

A report released on November 18 by Accenture titled "5G Fixed Wireless Broadband: Helping Close the Digital Divide in Rural America." The report identifies the potential of next-generation fixed wireless services to provide capacious and high-speed broadband Internet services in hard-to-reach geographical areas. According to the report: "By leveraging advances in wireless network technologies like 5G, an FWA connection can potentially deliver sustained download speeds, through the air, of 1 Gbps up to four miles." Also, “[a]s advanced 5G technology rolls out with high-band spectrum, FWA will have 10 to 100 times more capacity than 4G" and "future 5G-enabled FWA services will provide ultra-reliable service with under 10 millisecond latencies that are critical to many emerging 5G use cases." Accenture estimates that 8.4 million households – that is, 43% of rural households – could be served by at least one 5G fixed wireless access provider in the near-term future. 

To obtain the benefits of fast 5G deployment, Accenture's report recommends more mid-band spectrum in the lower 3 GHz band be repurposed for commercial use. And it recommends additional streamlining of regulatory processes such as zoning for infrastructure permit approvals. Those are sound recommendations that Congress and the FCC ought to take seriously if they are truly serious about reaching underserved Americans. 

For further insights on policy actions needed to expand broadband access to all Americans, see my Perspectives from FSF Scholars from February of this year titled "Fast Action on the Lower 3 GHz Band Will Secure Americas 5G Future." And also check out "Real Infrastructure Opportunity for Congress: Speed Deployment of 5G Network," a Perspectives that I co-authored by Free State Foundation President Randolph May.