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: Putting Mid-Band Spectrum into Licensed Use Adds Billions to Economy

On January 23, CTIA published a report, "The Economic Impact of Each Additional 100 MHz of Mid-band Spectrum for Mobile." 

The report, prepared by NERA, identifies the serious looming shortfall of mid-band range (1 GHz to 7 GHz bands) spectrum for licensed use in the face of sharply rising demand – and it goes on to estimate the tremendous economic benefits that result from putting more spectrum into licensed use:

[T]he wireless industry is rapidly approaching a spectrum deficit that will result in network congestion, thereby hindering the continued growth fueled by the wireless industry. Projections indicate that wireless operators will need at least 400 MHz of additional spectrum by 2027 to meet the needs of the U.S. economy, a deficit that will continue to grow to over 1400 MHz by 2032.

…

We estimate that each additional 100 MHz of mid-band spectrum to mobile will generate $264 billion of GDP, about 1.5 million new jobs, and about $388 billion in consumer surplus. The impact of 400 MHz of mid-band spectrum would be $1.1 trillion of GDP, 6.18 million new jobs, and about $1.5 trillion in consumer surplus. Beneficial effects would continue to accumulate beyond 400 MHz, and we estimate that by 2028 even 400 MHz of new 5G spectrum will not be enough to keep up with consumer demand.

The report traces the economic benefits of allocating mid-band spectrum for wireless use, including better mobile and fixed wireless access (FWA) for consumers and business employers, as well as support for industries that rely on mobile connectivity or serve the wireless industry.  

 

Reallocating spectrum occupied by federal agencies for licensed commercial use will require Congress to reauthorize the FCC's authority to conduct spectrum auctions and issue licenses to bid winners. Restoring that authority should be a top priority of the 119th Congress. Achieving this result and maximizing the economic benefits of licensed spectrum use also likely will depend on Congress and the Trump Administration finding ways to accelerate or revamp the existing National Spectrum Strategy to get lower 3 GHz and other spectrum ready on a much faster timetable.  

Survey Shows Sharp Increases in Mobile Data, Growth in 5G Home Broadband

On September 10, CTIA released its 2024 Annual Survey. The Survey Highlights report is available online. It shows the strong growth in mobile wireless connections, data usage, cell sites, and 5G Home connections during the year 2023.  

CTIA reported that wireless data traffic in the U.S. grew, as U.S. wireless networks supported 100 trillion MB of traffic last year, up from the nearly 74 trillion MB from the year before. Additionally, nearly 40% of wireless devices were 5G devices, for 216 million total active 5G devices in 2023, and the 558 million total wireless connections were up from 523 million from the year prior. Also, the total number of cell sites in the U.S. grew to 432,469 – up 24% from 2018. This continued growth was supported by annual wireless investment totaling $30 billion in 2023. Regarding 5G Home Broadband – or fixed wireless access (FWA) services – CTIA reported: "Over the past two years, 95% of net new broadband subscribers chose 5G home service—and importantly, 1 out of 5 net 5G home adds were entirely new home broadband subscribers." More stats are contained in the 2024 Annual Survey Highlights.

 

My July 30, 2023, blog post spotlighted CTIA's 2023 Annual Survey Highlights.

 

To fully realize the benefits of 5G connections, more spectrum will need to be available, especially licensed spectrum for commercial wireless uses. In January 2024, Free State Foundation President Randolph May published "Communications Law and Policy Priorities for 2024." One of those priorities is to "Reopen the Spectrum Pipeline and Act to Fill It." As FSF President May explained in a Media Advisory from March of this year, one constructive proposal for doing that is the Spectrum Pipeline Act of 2024 (S.3909).

 

Also, legislation for streamlining and speeding up permit processes for wireless infrastructure construction would help foster continued growth in wireless services and improve as well as increase connections for Americans. My blog post from August 7 identified one measure worth considering, the Accelerating Broadband Permits Act (S.4281), which is intended to help ensure the timely processing of permits for building new wireless infrastructure on federal lands. 

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. 

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."

Report Chronicles the Competitiveness of Today's Wireless Services Market

On December 11, CTIA released a report by Compass Lexecon titled "An Economic Analysis of Mobile Wireless Competition in the United States." The report provides an excellent overview of data points demonstrating that the wireless market is effectively competitive. And as the report rightly concludes, the competitive state of the wireless market means that imposing "utility regulation like that found in Title II of the Communications Act is both unnecessary andlikely to be a harmful deterrent to future investment and industry performance due to imposed costs and diverted resources."

The Compass Lexecon report cites strong capital investment in wireless network infrastructure:  $364 billion in nominal dollars invested 2010 to 2022. It also cites rapid network deployment and upgrades, with a 64% increase in cell cites activated over the prior decade and 5G deployment by 3 nationwide wireless providers to 98% of the population. Also, speeds have quadrupled over the past seven years and doubled over the past three years. The number of devices and data usage per wireless user have risen, with overall U.S. mobile traffic growing at a compound rate of about 55% between 2010 and 2022, and overall subscribership grew at a compound annual rate of about 5% during that same time span. And inflation-adjusted wireless price indices published by the Bureau of Labor Statistics declined by 18%-to-19% since 2017, with the price of wireless declining over the past 24-month period while the price of other products has risen 12%. 

 

Citations to those data points as well as to other positive indicators of wireless competition are contained in Compass Lexecon's report. It is a worthwhile read.  

 

On December 14, the Free State Foundation filed public comments with the FCC in its Safeguarding and Securing the Open Internet proceeding. In those comments, we cite the strong competitive conditions of the wireless and overall broadband markets and make the case that imposing public utility regulation on broadband Internet access services is unjustified and harmful to investment and innovation. Wireless services have thrived in a light-touch regulatory environment and wireless competition is an important check on anticompetitive conduct. Wireless consumers are not facing any actual or likely harm that warrants public utility regulation, and regulating wireless services as a public utility would not expand or increase deployment of those services to anyone who does not already have it. 

Research on 5G and Radar in Lower 3 GHz Spectrum Band Supports Commercial Use

Today, August 15, CTIA released a fascinating short paper that makes the case for authorizing commercial use of the 3.3-3.45 GHz band at full power and on an exclusive licensed basis. The paper, "Successful Military Radar and 5G Coexistence in the Lower 3 GHz Band: Evidence from Around the World," summarizes research from GSMA, CCS Insight, and DLA Piper regarding the co-existence of 5G services with U.S. military radars in the lower 3 GHz band in foreign countries such as Germany, Japan, Mexico, South Korea, and Taiwan.

According to CTIA's paper:

This real-world evidence demonstrates how proven coordination methods are already facilitating simultaneous use of the band by 5G and military radars. Segmenting the band at 3.3 GHz with commercial wireless operating above and military radars tuning below can facilitate near-term coexistence. Coordination techniques—such as retuning, compression, and frequency coordination—provide assurance that 5G networks can be deployed in the U.S. at full power in lower 3 GHz spectrum while maintaining the ability to meet critical government missions that depend on radar systems.

The U.S. needs more mid-band spectrum for commercial use, particularly on an exclusive licensed basis, and to help meet those needs, Congress and the NTIA should prioritize the repurposing spectrum in the lower 3 GHz band. For more on this, see my February 2021 Perspectives from FSF Scholars, "Fast Action on the Lower 3 GHz Band Will Secure America's 5G Future." The coexistence of 5G and U.S. military radar operations in foreign countries identified in CTIA's paper persuasively favors repurposing the 3.3-3.45 GHz band for private commercial use. If 5G and military radar coexist in other countries, they can and should be made to coexist in the U.S. 

 

Also, in order to put lower 3 GHz band spectrum into the hands of private commercial providers of 5G services, the FCC's authority to conduct spectrum license auctions needs to be restored. The House of Representatives should promptly pass H.R. 3565 – the Spectrum Auction Reauthorization Act of 2023. If it becomes law, H.R. 3565 would restore that authority to the Commission. 

Survey Shows Big-Time Growth in 2022 for 5G Devices and Home Broadband

On July 25, CTIA released its 2023 Annual Survey. Survey highlights are posted on CTIA's website. It shows the remarkable growth in wireless services that took place in the U.S. during 2022.  

The survey highlights show that 2022 was a record-breaking year for wireless data traffic growth, as U.S. wireless networks supported 73.7 billion MB of traffic last year. That total was 20 trillion MB – or 38% more – than in 2021. Total wireless traffic for 2017 was 15.7 trillion MB. Additionally, annual wireless investment climbed to an industry record $39 billion in 2022, up from $35 billion in 2021. This marks the continuation of a series of annual increases in capital investment, going back to 2017, when annual investment totaled $26 billion. According to CTIA, over its history (presumably dating back to the early 1990s), the wireless industry has invested over $675 billion.

CTIA's 2023 Survey Highlights also revealed stunning growth in wireless connectivity, especially for 5G devices. At year's-end 2022, there were about 523 million connected wireless devices and 162 million active 5G devices. Those numbers are up significantly from 2021, when connected wireless devices totaled 499 million and active 5G devices totaled 86 million. Between the end of 2021 and 2022, here was a near doubling of 5G connected devices. 

The survey also shows that 2022 was a huge year for 5G home broadband. According to the survey highlights, 5G home broadband now covers more than 94 million U.S. households, and that 5G home broadband accounted for 90% of net broadband additions last year. The survey also contains 2022 figures regarding small cells, price per MB, and text. 

The continuing success of wireless services in the U.S. owes, in significant part, to a pro-investment, pro-competition, light-touch regulatory policy that dates back to the early 1990s.  Thirty years ago, Congress authorized competitive bidding spectrum license auctions and preempted state regulation of rates and entry as well as state and local government permit and zoning decisions on infrastructure citing that have the "effect of prohibiting" wireless services. To ensure the continued success of 5G services in the U.S. Congress should take action in 2023 to advance legislation such as H.R. 3557, the American Broadband Deployment Act of 2023, to clear away obstacles to timely infrastructure. Also helpful to promoting broadband deployment, including wireless broadband, are a slate of bipartisan bills for streamlining infrastructure deployment that were passed by the House Energy and Commerce Committee in May of this year and highlighted in a May 24 blog post. And as FSF Senior Fellow Andrew Long explained in a July 21 blog post, "Congress Should Reinstate the FCC's Spectrum Auction Authority" by passing H.R. 3565, the Spectrum Reauthorization Act of 2023. 

A Strong Future for 5G Requires More Mid-Band Spectrum

On July 13, CTIA released a report titled, "The State of 5G: Evaluating Progress and Charting the Path Forward." The State of 5G Report highlights the rapid speed of 5G network deployment – outpacing deployment of 4G LTE networks – strong consumer adoption of 5G by U.S. consumers, the benefits of fixed wireless access (FWA) in providing residential broadband and closing the digital divide, innovative uses cases for 5G for medical, agricultural and other industries, 5G network reliability and security, and job creation enabled by 5G networks.

Additionally, the State of 5G Report states that "5G is at an inflection point: While initial deployments have achieved a solid footing, attention now turns to the scaling-up of applications and ensuring capacity is available to meet growing demand." Moreover, 5G home broadband service "requires more spectrum to scale up to its potential as a nationwide home broadband competitor. Today operators only offer this service in areas with sufficient capacity to provide reliable quality of service. Without more spectrum, the opportunity for FWA to scale and meet demand for a home broadband alternative to cable will likely be foregone."

 

The report cites estimates that the U.S. will need at least 400 MHz of additional mid-band spectrum to supply projected demand in 5 years, and also need nearly 1,500 MHz in 10 years. Yet the report also observes, correctly, that there are no planned spectrum auctions in the works. The FCC already has allocated significant amounts of spectrum for unlicensed uses, including Wi-Fi. But significant amounts of spectrum remain under federal agency control, and action is needed to put more spectrum into commercial use on an exclusive licensed basis. As Free State Foundation President Randolph May and Senior Fellow Andrew Long have written about on several occasions, the Commission's authority to conduct spectrum license auctions has lapsed and it needs to be restored. To date, Congress has not succeeded in passing legislation to restore the FCC's spectrum license auction authority.  

 

The report identifies things that must be done in order to ensure that the U.S. maintains its economic competitiveness and national security when it comes to 5G services. It cites estimates that the U.S. will need at least 400 MHz of additional mid-band spectrum to supply projected demand in 5 years, and also need nearly 1,500 MHz in 10 years. But as the report observes, today there are no planned spectrum auctions for spectrum licenses. 

 

The report also states that U.S. support for proposals to new mobile allocations for 1,490 MHz of spectrum located between 4.8 GHz and 10.5 GHz, both at the November 2023 World Radio Conference and domestically, would put the U.S. in prime position for the 5G future. 

As I have written in prior blog posts, Congress can do its part in securing a strong 5G future for the U.S. by taking up and passing the Spectrum Auction Reauthorization Act of 2023 – H.R. 3565. The Act, if passed into law, would restore the FCC's statutory authority to hold spectrum license auctions. Additionally, the Act would authorize the NTIA to study the feasibility of making 4 GHz band and 7/8 GHz band available for commercial use on an exclusive or shared basis. 

Report: Wireless Benefits U.S. Economy

On December 7, CTIA published a report by Compass Lexecon titled "The Importance of Licensed Spectrum and Wireless Telecommunications to the American Economy." The report spotlights the economic output and job creation enabled by wireless services between 2011 and 2020:

The substantial investments in licensed spectrum and infrastructure during the past decade have allowed the industry to deliver wireless services to hundreds of millions of consumers throughout the U.S., contributing nearly $9.5 trillion in gross output and $5.4 trillion in GDP to the American economy, and employing an annual average of more than three million people… In 2020 alone, the wireless industry contributed over $1.3 trillion in gross output, $825 billion in GDP, and nearly 4.5 million jobs to the American economy. 

These trillions in output and millions of jobs include the direct effects of the core wireless industry (mobile network operators and resellers) on the economy, as well as the secondary effects of the wireless supply chain and select downstream market segments that rely heavily upon wireless and mobile broadband services (including smartphone app developers, search engines, digital advertising agencies, mobile gaming, and social networking sites). It does not take into account the contributions made by other sectors that also depend on and use wireless services that could represent hundreds of billions in additional gross output and GDP, as well as millions of workers. Therefore, the estimates presented in this study are a baseline, or lower bound, for the contributions made by wireless- related sectors to the American economy. 

The decade's impressive economic output and job creation spurred by the wireless industry depended upon wireless network operator investment of $265 billion in infrastructure during that same period of time. Moreover, "[b]etween 2011 and 2020, spectrum auctions pertaining to wireless services have raised $155 billion in auction revenues."  

Compass Lexecon's report cites many other pro-consumer results from the strong private sector investments made in wireless networks between 2011 and 2020, including significantly expanded competing network coverage, mobile wireless download speed increases, mobile data traffic growth, and downward pricing trends. The report thus provides a reminder of the importance of maintaining a free market-oriented light-touch regulatory framework for wireless broadband services that promotes private investment and innovation. 

Acknowledging that demands for mobile wireless services is expected to increase significantly in the years ahead, the report presents a key policy takeaway for ensuring that wireless providers can meet those future demands: 

For the wireless industry to continue to provide these considerable, widespread positive effects to the American economy, it is necessary to provide mobile network operators access to dedicated, licensed spectrum. It is also important to allow potential licensees to compete to acquire the spectrum licenses, and, once acquired, to allow the licensees to determine the optimal allocation and usage of that spectrum in the economy based on economic market forces. 

The report doesn't analyze any specific bands. But as public debate continues regarding whether exclusive licensed and shared spectrum frameworks ought to be established by Congress or by the FCC for future commercial spectrum allocations, the findings contained in Compass Lexecon's report deserve careful consideration alongside facts, data, and analysis offered by parties with other viewpoints. 

New Study Touts the Affordability of Mobile Broadband in America

On November 30, CTIA announced the publication of "Unpacking the Cost of Mobile Broadband Across Countries," a study by Oxford Economics. The study examines consumer prices for mobile broadband services in different countries and analyzes the affordability of those services in the U.S. and other countries. According to Oxford Economics:

We find that, across all plans, the United States consistently ranks in the most affordable half of the distribution when accounting for the incomes earned by the average household. This is especially true for entry-level plans, with the US ranking as the 3rd most affordable for this mobile service category among the 20 benchmark countries, with an annual cost equivalent to 0.3% of the average household personal disposable income… 

 

Furthermore, our analysis shows US affordability has improved substantially between 2018 and 2021, with entry-level plans falling by 44% as a proportion of household disposable income. 

The study is worth reading in full, and it can be found online at CTIA's website. 

 

Free State Foundation scholars previously have highlighted the pro-consumer pricing performance of broadband Internet services over the last few years – and particularly in the face of harsh inflation. The affordability of mobile broadband services in the U.S. is a fortunate result of the strong private network investment, innovation, and competition in the U.S. wireless market. Preserving the existing federal light-touch policy framework for regulating communications services – including mobile broadband services – is essential to ensuring that mobile services remain affordable for Americans. 

CTIA Annual Survey: Record-Breaking Investment Benefits Consumers

On Tuesday, CTIA released the 2022 edition of its annual wireless industry survey. Among other milestones, it documents an unprecedented level of investment, accelerated cell-site deployments enabled by regulatory reforms, the explosive adoption by consumers of 5G devices, inflation-defying price decreases, and the rapid rise of fixed wireless as a viable home broadband alternative.

Specific findings from the survey include the following:

In 2021 alone, U.S. wireless carriers spent almost $35 billion "to grow, improve and run their networks." As the following chart illustrates, that record-breaking total represents the fourth straight year of increased annual investment.

Thanks to efforts by the FCC and the states to streamline siting regulations, 69,543 cell sites – 62 percent of the post-2016 total – were constructed in the two years between 2019 and 2021.

5G service today is available to 315 million Americans. And consumers are adopting this mobile broadband technology at a brisk pace: the total number of deployed 5G-capable devices grew by over 500 percent during just the past year. Consequently, one in three adults now have a 5G-capable smartphone or other device.

While consumer prices overall have increased by 94 percent thanks to "historic" levels of inflation, prices for unlimited data plans have fallen by nearly half since 2010.

5G fixed wireless quickly has emerged as a viable competitive alternative for home broadband service: over 40 million households already have access to this option.

Highlights from CTIA's 2022 Annual Survey are available here.

Latest Wireless Industry Survey Reveals Continued Growth in Investment, 5G Deployments, and More

The 2021 annual survey of the wireless industry conducted by CTIA details steadily increasing investment, rapidly expanding 5G deployments, and a robust response to the spike in demand driven by COVID-19.

Released by CTIA on July 27, 2021, the 2021 Annual Survey Highlights present a compelling portrayal of progress and performance during a year over which the pandemic cast a heavy shadow.

A few highlights:

• Private investment in mobile networks increased for the third consecutive year, reaching a five-year high of $30 billion. Capital expenditures to date exceed $600 billion.
• 5G networks were deployed at a pace exceeding that achieved by 4G networks and in 2020 covered 300 million Americans, compared to only 200 million twelve months prior. First launched in 2019, 5G already is available to 90 percent of the country.
• In the last two years, mobile carriers constructed nearly 68,000 new cell sites, an achievement facilitated by wireless infrastructure reforms implemented by the FCC.
• Total mobile data consumption exceeded 42 trillion megabytes in 2020, an increase of more than 200 percent since 2016. Over the past decade, mobile data traffic has grown by a factor of 108.

Broadband Organizations Join Together to Form America's Broadband Future

On May 14, seven broadband providers and trade associations announced the formation of America's Broadband Future, a coalition that "will urge lawmakers to bridge the digital divide by expanding access in rural America, equipping vulnerable communities with resources needed to get connected, and investing in digital literacy initiatives to empower all Americans to thrive in the digital age."

On its home page, America's Broadband Future asserts that:

Unfortunately, some of the broadband policy plans being discussed in Washington, D.C. fall short. They fail to provide the resources necessary to empower and enable vulnerable communities to get connected quickly. And they fail to prioritize those unserved areas of the country that are most in need of major broadband investment. 

Free State Foundation scholars have addressed various shortcomings of the broadband-specific provisions in President Biden's American Jobs Plan in the following Perspectives from FSF Scholars and blog post:

• "Biden Broadband Plan Favoring Government-Owned Networks Lacks a Constitutional Foundation"
• "Biden Broadband Plan: Claims That Broadband Is 'Too Expensive' Are Unfounded"
• "Biden Broadband Plan: Misdirected Broadband Subsidies Hurt Competition and Consumers"
• "'Future Proofing' Subsidized Broadband Would Inflate Consumer Prices"

The founding members of America's Broadband Future are AT&T, Charter Communications, Comcast, Verizon, CTIA, NCTA – The Internet & Television Association, and USTelecom.

Court Rules that Berkeley's "Overwarning" Ordinance on RF Emissions is Preempted

On September 17, the U.S. District Court for the Northern District of California ruled that a 2015 City of Berkeley ordinance requiring retailers to provide specific warning labels regarding cellphone radio frequency (RF) emissions for point-of-sale purchases is preempted by the FCC's regulatory actions. 

After analyzing the Commission's 2019 RF Order as well as the agency's Statement of Interest filed in the case, the District Court concluded:  

Given the specificity of the warning required by the Berkeley ordinance, the implied risk to safety if the warning is not followed (a risk the FCC has concluded does not exist), and the acknowledged 'controversy concerning whether radio-frequency radiation from cell phones can be dangerous if the phones are kept too close to a user's body over a sustained period,'… the FCC could properly conclude that the Berkeley ordinance – as worded – overwarns and stands as an obstacle to the accomplishment of balancing federal objectives by the FCC.

The District Court's ruling in Berkeley v. CTIA applied Skidmore deference rather than Chevron deference to both the 2019 RF Order and the Statement of Interest. The court held that even by according to the less deferential standard the Berkeley ordinance conflicted with federal policy articulated by the Commission. Along the way, the court provided an insightful analysis of conflict preemption doctrine, savings provisions, and the Third Circuit's 2010 decision in Farina v. Nokia. For more on this case, see my blog post from June.  

Report Emphasizes Building Blocks for the US 5G Economy

A report by Boston Consulting Group titled "Building the US 5G Economy" gives a fresh perspective on next-generation wireless network deployment and the most critical focus areas for policymaking to ensure that our nation thrives. The report was released on September 13. A primary factor for future US 5G success that the report identifies is:

Spectrum Availability. A transparent, market-based auction schedule for 5G spectrum, with an emphasis on cleared, licensed midband airwaves, will allow spectrum to be made available to service providers as soon as possible.

Additionally, the report identifies streamlined permit processes to speed wireless infrastructure build-out as well as subsidies targeted to 5G network expansion in rural areas. The report is available at CTIA's website.

Strong U.S. Wireless Investment in 2019 Enabled Solid Performance Amidst Lockdowns

Today, CTIA released its 2020 Annual Survey. The survey highlights show stunning growth in mobile wireless networks and performance in 2019, including $29.1B in U.S. capex in wireless networks, about 46,000 new cell sites built, over 20 million new U.S. wireless subscriptions for a total of 442.5 million subscriptions, and 37.1 trillion megabytes of wireless data consumption. Importantly, the tremendous investment by the U.S. wireless industry in 2019 helped ensure that mobile wireless networks successfully accommodated surging data and wireless traffic in early 2020 amidst the first several weeks of lockdowns. That accomplishment sets U.S. networks apart from other nations in which speeds declined when faced with rising traffic. Be sure to check out the wireless industry's 2020 Annual Survey Highlights at CTIA's website. 

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 Shows U.S. Needs Licensed Mid-Band Spectrum to Support 5G

A June 2020 report by research firm Analysys Mason titled "Comparison of Total Mobile Spectrum in Different Markets" shows the pressing need in the U.S. for more mid-band spectrum to support commercial 5G services. The report assesses total mobile spectrum availability in different countries for low mid and high bands and compares them to the U.S. Key report findings include the following: 

• Low Band: "Several countries are planning to make further licensed low-band spectrum available: future low-band assignments for these countries, on average, will total 90MHz. This means that commercial access to the 1.3GHz and 1.7GHz bands will be an important element of continued US low-band leadership."

• Mid Band: "In a key range of global 5G spectrum (3.3–3.6GHz), the US today has no licensed spectrum available, while other benchmark countries that have made these airwaves available average nearly 200MHz. However, the US would become one of the leading benchmark countries if it made 250MHz (or more) of spectrum available in the lower 3GHz band, as some have proposed, and the FCC and NTIA are exploring with commercial providers." (emphasis added)

• High Band: "The US currently leads the world in terms of the amount of licensed high-band spectrum, though China may catch up. In the next few years, China could make 8250MHz of licensed high-band spectrum available, just below the 8300MHz the US could make available. 

These findings reveal the policy imperative of repurposing lower 3 GHz band spectrum for commercial use. It is reported that federal government agencies are the primary users for all spectrum from 3.1-3.55 GHz. Other nations have recognized the importance of licensing that spectrum for 5G services in their territories and the U.S. needs to catch up. No one should expect the relocation of federal agencies in the lower 3 GHz band will be an easy or quick task. Efforts to make this mid-band spectrum available need to be prioritized and fast-tracked now. 

Importantly, clearing spectrum for licensed commercial use in the lower 3 GHz band will be critical. Recent initiatives to allocate spectrum for unlicensed use are sufficient and need not be expanded at the expense of licensed use. As Analsys Mason explains, the U.S. has now allocated significant spectrum resources to unlicensed usage. With respect to mid-band spectrum, the report observes: "The recent US addition of 1200MHz of unlicensed spectrum in the 6GHz band is 2.4 times more than the average amount of additional unlicensed mid-band spectrum other countries are considering making available in the next few years." And regarding mid/high band spectrum in the U.S., the report states: "policymakers have made around three times as much unlicensed spectrum as licensed spectrum available." 

It is generally recognized that a mix of unlicensed spectrum and licensed spectrum is needed to support next generation wireless networks. Critical to a healthy mix – and to U.S. competitiveness in the global 5G race – is a supply of licensed commercial spectrum in the lower 3 GHz band.  

U.S. Needs More Mid-Band Spectrum

CTIA has released a new report by Analysys Mason that demonstrates that the U.S. needs to make available more mid-band spectrum as quickly as possible if we are not going to fall behind other countries in the race for 5G leadership. The new report offers further support for what Free State Foundation scholars have been saying for many months.

First, it should be acknowledged that FCC Chairman Ajit Pai's "5G Fast Plan," which includes freeing up spectrum, already has played a very constructive role and will continue to do so with regard to speeding 5G deployment. If you haven't seen it already, I urge you to watch the video of Chairman Pai's remarks at the Free State Foundation's Twelfth Annual Telecom Policy Conference on March 10.

Nevertheless, the Analysys Mason report shows the case for making more mid-band spectrum available for licensed use remains pressing. Here are some key Analysys Mason findings.

• On average, other countries will have 5X more licensed mid-band than the U.S. by end of year.
• On average, other countries will have 5X more licensed mid-band than the U.S. by end of year.
• 310 MHz is the amount of mid-band spectrum needed to close the gap.

We shouldn't need a wake-up call, and I am cautious about invoking the COVID-19 pandemic gratuitously or wantonly as a basis for public policy actions. But I do think there is widespread agreement that the current coronavirus crisis has made all Americans more aware of the importance to the country's general welfare and security of having in place robust, ubiquitous broadcast networks. And there should be widespread agreement as well that the availability -- in a timely fashion -- of more mid-band licensed spectrum has an important role to play.