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.  

CSIS Reiterates Importance of Spectrum to National Security

Recently published commentary from the Center for Strategic & International Studies (CSIS) makes familiar points regarding America's pressing need for additional, globally harmonized commercial spectrum – but also places the continuing spectrum-allocation impasse in a broader, geopolitical context characterized by serious national security and intelligence implications.

"Spectrum Allocations and Twenty-First-Century National Security," by James Andrew Lewis, echoes arguments raised by another CSIS scholar, Clete Johnson, that I summarized in an October 2024 post to the FSF Blog. Namely, that Congress must act quickly to renew the FCC's spectrum auction authority and work with the Department of Defense and other federal agencies to ensure that the same bands used in other parts of the world are made available for commercial use in the U.S.

The concern, according to Mr. Lewis, is China:

The United States is in a global competition with China over markets, rule setting, and technological leadership…. To remain competitive, the United States will need to adjust how it has allocated radio spectrum to emphasize commercial innovation. The government-centric spectrum allocations of the last century will need to change if we are not to fall behind. 

Specifically, U.S. policymakers must appreciate that, going forward, technological innovation by the commercial, rather than the government, sector is the key to national security in the twenty-first century: "[c]ommercial technologies underpin modern military strength." And that to facilitate that technological innovation, domestic commercial interests must have access to the same spectrum bands used in the rest of the world:

If the United States does not use a harmonized spectrum, it shrinks the economies of scale that trusted vendors need to compete with Huawei…. In simple terms, people will build devices to use specific spectrum bands for commercial purposes designated by the WRC. Essentially, if the United States does not use spectrum allocated everywhere else for commercial purposes, it will be handicapped in any competition.

In other words, U.S. policymakers must move beyond the antiquated notion that government control of certain bands, in and of itself, enhances our national security – and instead recognize that military might today hinges in large part upon America's ability to dictate the technological standards for mobile networks used worldwide. Commercial access to globally harmonized spectrum bands is critical to achieving that objective.

Mr. Lewis concludes with a warning: "[t]he timing for action is short, perhaps a year or two since a failure to act puts the United States at the cusp of a great strategic blunder that will let an ambitious China build the network that forms the backbone of the global economy."

Report Highlights Link Between Spectrum Policy and National Security

A new report published by the Center for Strategic & International Studies (CSIS) warns that absent a heightened focus on our national spectrum policy, "[t]he security of the United States as a market democracy is at stake." In the simplest of terms, online activity is only as secure as the underlying apps and network infrastructure over which it occurs. If that software and hardware is to come from trusted sources, policymakers must foster an environment in which America's mobile marketplace maintains a powerful say in global technology development, "especially as autocratic nations seek to dominate."

In Part 1 of "Concrete National Security Benefits of Spectrum Allocation for Commercial 5G," CSIS Strategic Technologies Program Senior Fellow Clete Johnson identifies two "difficult technical feats" that the U.S. must and can accomplish if it is to achieve the scale necessary to drive technology development down a secure and trusted path. The first is to better harmonize frequency use, as "[t]he more that U.S. spectrum use is harmonized with that of allies and global markets, the more scale trusted suppliers have for secure technology development." The second is to allocate sufficient spectrum so that capacity does not constrain the economic might of American consumers.

Harmonizing the frequencies allocated to 5G (and successor standards) is essential to achieving economies of scale because technology development is frequency specific: equipment developed for one band typically cannot be used in other bands. As the report points out, however, "the United States is becoming a mid-band spectrum 'island,' operating largely outside the core globally harmonized spectrum bands. If this trajectory continues, the U.S. technology ecosystem will be confined to a U.S.-only spectrum 'dialect' that lacks global influence and scale."

Allocating sufficient spectrum to satisfy growing mobile broadband demand, meanwhile, maximizes the economic ability of 350 million American consumers to shape global technology decisions. As the report explains:

U.S. wireless companies need sufficient spectrum resources to collaborate with like-minded nations in innovating and manufacturing advanced wireless technologies and components – including chipsets, software, radios, and more – for use in both the commercial and federal sectors…. The existing disparity between U.S. licensed mid-band spectrum allocations as compared to the rest of the world has become a major national security challenge, as it has created a platform for China to shape the near-term and future technology environment to its strategic advantage.

The report proposes several ways to address this situation. They include:

• Reframing the spectrum deficit as "an optimization challenge, not a scarcity problem."
• Moving from a "zero-sum" mindset that pits government and commercial uses against each other to a collaborative environment that promotes "static" and, in the longer term, "dynamic" spectrum sharing solutions.
• Restoring the FCC's spectrum auction authority.
• Aggressively pursuing harmonization opportunities, which may include the 7/8 GHz band, so that America speaks the same "frequency 'language'" as its allies.

The report's forthcoming Part 2 primarily will focus "on the importance of agile spectrum management capabilities in the context of electronic warfare."

NTIA Spectrum Strategy Implementation Plan Announced at FSF Policy Conference

At Free State Foundation's 16th Annual Policy Conference held on March 12, the NTIA's Senior Spectrum Advisor Scott Blake Harris announced the release of the its National Spectrum Strategy Implementation Plan.

The Plan and an accompanying press release briefly summarizing it are available at the NTIA's website. Video of Mr. Blake's keynote address is available online. If Mr. Blake's prepared remarks at FSF's Annual Policy Conference become available, we will post them. FSF appreciates Mr. Blake's appearance at the Conference.

 

On January 2 of this year, FSF President Randolph May and Senior Fellow Andrew Long filed comments with the NTIA on the implementation of the National Spectrum Strategy. In those comments, FSF President May and Mr. Long emphasized the crisis of the empty spectrum pipeline and the need to take action to repurpose mid-band spectrum for commercial use. Stay tuned for more from FSF Scholars on the NTIA's Implementation Plan, spectrum policy, and the 17th Annual Policy Conference.
 

(*This post was updated on 3/15/2024 with information and links to the video of Mr. Blake's address at #FSFConf16.)

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."

Press Release: FSF Comments – Implementation of the National Spectrum Strategy

On January 2, 2024, Free State Foundation President Randolph May and Senior Fellow Andrew Long filed comments in response to the National Telecommunications and Information Administration's Notice of Opportunity for Public Input on the Implementation of the National Spectrum Strategy.

Below are the first three paragraphs and the concluding paragraph of FSF's Comments:

These comments are submitted by the Free State Foundation (FSF) to the National Telecommunications and Information Administration (NTIA) in response to its Notice of Opportunity for Public Input (Notice) on the National Spectrum Strategy (Strategy) dated November 13, 2023. Simply put, the Strategy fails to tackle the difficult work necessary to rationally balance government and commercial demands for this high-value, limited resource. Consequently, while the headline – "this Strategy identifies five spectrum bands totaling 2,786 megahertz of spectrum for in-depth, near-term study to determine suitability for potential repurposing to address the nation's ever-evolving needs" (emphasis added) – at first glance may appear to represent real progress, the bottom line is that there is no guarantee that a single megahertz of that total will be repurposed. While making available sufficient unlicensed spectrum is an important objective, what is perhaps immediately concerning is the fact that the Strategy fails to identify sufficient mid-band spectrum that could be licensed on an exclusive basis, thereby jeopardizing our nation's ability to compete effectively in the global race to 5G.

It has been nearly ten months since NTIA requested comments from the public "on the development and implementation of a National Spectrum Strategy for the United States." In the interim, no new spectrum has been added to the pipeline – and Congress has failed to reinstate the Federal Communications Commission's (FCC or Commission) spectrum auction authority. All told, what was a pressing need in March 2023 is now a crisis.

Commercial applications demand more spectrum without further delay. Domestic mobile carriers require additional licensed capacity, particularly mid-band spectrum, to maintain their economically essential global leadership in the rollout of 5G. And even as substantial amounts of additional unlicensed spectrum have been made available in recent years, consumer demand for Wi-Fi and other unlicensed uses continues to explode. The Notice, and especially the "Memorandum on Modernizing United States Spectrum Policy and Establishing a National Spectrum Strategy" issued contemporaneously by the White House (Spectrum Policy Memorandum), arguably represent an incremental step forward to address these spectrum deficits. However, far bolder and more timely action is needed.

*****

The reality, however, 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. The Spectrum Policy Memorandum issued by the White House, by establishing hard deadlines and clear processes to resolve interagency disputes, acknowledges the need for decisive action. Unfortunately, the Strategy itself may create the illusion of progress, while merely kicking the can further down the road.

A PDF of the complete set of Free State Foundation Comments, with footnotes, is here.

NTIA Releases National Spectrum Strategy, But Pipeline Remains Empty

On November 13, the NTIA released its National Spectrum Strategy (NSS). The document's release in advance of the December 31, 2023 deadline set by the White House is welcome as far as it goes. However, at the same time, the NSS doesn't appear to move the ball forward in any practical sense because it doesn't actually designate any spectrum for repurposing but instead simply identifies five bands for future studying – of up to two years – for "potential repurposing." There is a widely-acknowledged pressing need to dedicate more spectrum for commercial wireless services, but from a reading of the NSS it appears that the empty spectrum pipeline won't be replenished anytime soon.

The matter of most immediate importance covered in the National Spectrum Strategy is its first "pillar": "A Spectrum Pipeline to Ensure U.S. Leadership in Advanced and Emerging Technologies." The NSS selected five different spectrum bands totaling 2,786 megahertz (MHz) of spectrum for "in-depth near term study to determine suitability for potential repurposing to address the nation's ever-evolving needs." According to the NSS, "[t]hese spectrum bands are a mix of Federal and shared Federal/non-Federal bands—with an emphasis on mid-band frequencies—that will be studied for a variety of uses, including terrestrial wireless broadband, innovative space services, and unmanned aviation and other autonomous vehicle operations." Those five bands are: (1) Lower 3 GHz (3.1-3.45 GHz); (2) 5030-5091 MHz; (3) 7125-8400 MHz; (4) 18.1-18.6 GHz; and (5) 37.0-37.6 GHz. 

 

Additional "pillars" in the NSS address long-term planning for supporting spectrum use, improving spectrum access and efficiency through innovation and emerging technologies, and future spectrum-related workforce development. The NSS states that the NTIA's next step is to develop an Implementation Plan for carrying out the objectives identified in the report. That Implementation Plan reportedly will be completed within 120 days of the release of the NSS. A Presidential Memorandum issued on November 13 states that the Plan will include a schedule for detailed studies of the selected bands to be completed within 2 years of the submission of the NSS or within 2 years of receipt of funding for agency studies under the Spectrum Pipeline Act of 2015.

 

The 2015 Act ought to serve as a reminder that spectrum resource needs have long been recognized, but the federal progress on actually addressing those needs, across multiple Administrations, has been slow. Hopefully, the Implementation Plan will likewise be submitted ahead of schedule and the spectrum band studies also are completed rapidly so that significant progress finally becomes discernable and spectrum is actually repurposed to support 5G and future 6G services. Until then, the spectrum pipeline remains empty.

 

In April of this year, Free State Foundation President Randolph May and I submitted comments to the NTIA in its Development of a National Spectrum Strategy proceeding. See also my April 18 blog post, "FSF Calls for Fast Action on Mid-Band Spectrum." FSF scholars will have more to say in the near future on the NSS and spectrum policy. 

Commissioner Carr to Congress: Renew FCC's Auction Authority

As reported by Christopher Cole in Law360 (subscription required), Commissioner Brendan Carr seized the moment at the FCC's August Open Meeting and urged Congress to renew the agency's spectrum auction authority.

In a recent post to the Free State Foundation's blog, I once again noted the importance of the FCC's auction authority, which was allowed to lapse in March of this year. (I first addressed this topic in "Extending FCC Spectrum Auction Authority Is Essential to the 5G Race," a February 2023 Perspectives from FSF Scholars.)

Before voting to approve a Notice of Inquiry regarding non-federal spectrum usage, Commissioner Carr made a similar plea:

I'd be remiss if I didn't note today, while we have a number of some of the top congressional staffers in the room, to reiterate the call for Congress to reauthorize the FCC's spectrum auction authority. So I know it's August recess, Congress isn't in session, but if, over the August recess, you happen to find some good spectrum auction authority somewhere, we would be happy to put it to good use.

Chairwoman Rosenworcel responded by thanking him for "the shameless plug."

To view this interaction, please click here.

Congress Should Reinstate the FCC's Spectrum Auction Authority

On Monday, four members of the House Energy and Commerce Committee, including Chair Cathy McMorris Rodgers (R-WA), issued a statement indicating that they are "extremely disappointed" that Congress has not yet passed the Spectrum Auction Reauthorization Act of 2023 (H.R. 3565).

In "Extending FCC Spectrum Auction Authority Is Essential to the 5G Race," a February 2023 Perspectives from FSF Scholars, I warned that, absent congressional action, the FCC's auction authority soon would expire – thereby shutting off the spectrum pipeline that is essential not only to our nation's continued global leadership in the mobile space, but also to our overall economic growth. On March 9, 2023, that concern became reality. And over four months later, the wait for a legislative solution drags on.

H.R. 3565 would reinstate the Commission's auction authority through September 30, 2026. It also would appropriate an additional $3.08 billion for the FCC's "rip-and-replace" program, which provides funds to remove from American communications networks suspect hardware manufactured by Huawei, ZTE and other untrustworthy sources.

As Free State Foundation President Randolph J. May noted in a May 25, 2023 post to the FSF Blog, the day prior H.R. 3565 advanced out of committee on a unanimous 50-0 vote. Unfortunately, it has not yet reached the House floor.

The expiration of the Commission's auction authority impacts more than just future auctions. FCC Chairwoman Jessica Rosenworcel has taken the position that the agency can neither grant to T-Mobile the licenses in the 2.5 GHz band for which it paid $304 million nor approve its request for special temporary authority (STA) to use that spectrum in the interim.

In a statement to Fierce Wireless, the FCC's press secretary wrote that subsection 11 of Section 309 of the Communications Act "clearly states that 'The authority of the Commission to grant a license or permit under this subsection shall expire March 9, 2023'; so, any special temporary authority the FCC could have would flow from this section of the statute, which as you know is still currently expired."

T-Mobile and others, including a group of former FCC General Counsels, interpret the relevant statutes and agency precedents quite differently.

Big picture, the path out of this situation is clear: Congress should act expeditiously to reinstate on a long-term basis the Commission's auction authority. In the meantime, the agency can and should consider seriously the legal arguments referenced above that would allow T-Mobile to put to its highest and best use – whether on a licensed or STA basis – the spectrum for which it already has paid.

In Early 2023, Fixed Wireless Access Services Are Still Going Strong

On April 24 and 25, T-Mobile and Verizon Wireless released their respective first quarter results for 2023. Once again, both nationwide mobile providers reportedly had strong net subscriber additions to their fixed wireless access (FWA) broadband services.  

T-Mobile reportedly added 523,000 net subscribers to its FWA services. According to a May 17 article in FierceWireless,T-Mobile "has a goal to grow its existing 3.2 million FWA customers to around 7 million to 8 million FWA customers by the end of 2025" and that "it is looking at various options that may allow it to grow beyond that 7 million or 8 million figure."

 

An April 25 article in FierceWireless by Sue Marek states that Verizon "reported 393,000 FWA net adds in the quarter, bringing its total FWA subscriber base to 1.9 million. Of those 393,000 FWA net adds, 137,000 came from the company's Business group." Additionally, an April 25 article in FierceWireless by Diana Goovaerts notes that Verizon "stands to gain 100MHz of additional C-Band spectrum later this year which it plans to deploy in urban areas to benefit FWA and wireless customers who are currently being served with 60MHz of C-Band."

 

With increased access to C-band spectrum, continued expansion of 5G network coverage, and growth of fiber for backhaul support, FWA is likely to be an attractive option for more Americans by the end of the year. And, as observed in a November 1, 2022 blog post, FWA is a particularly attractive option for those residing in areas with geographical terrain that are difficult-to-reach as well as in areas with lower population densities. These benefits of FWA are the subject of my April 2022 Perspectives from FSF Scholars, "Fixed Wireless Access is Boosting Rural Broadband and Consumer Choice." 

 

However, a replenished spectrum pipeline is a necessary condition for realizing the full potential of FWA and for maximizing the competitiveness of the broadband services marketplace. My blog post from March 9 of this year called attention to the lapsing of the FCC's authority to conduct spectrum license auctions. And the Free State Foundation's April 17 public comments to the NTIA urged the timely adoption and implementation of a National Spectrum Strategy that will boost the supply of spectrum for commercial and other private uses, particularly for licensed commercial use. Congress should promptly act to restore the FCC's spectrum auction authority, and the NTIA should act timely in adopting the implementation plan for the long-awaited National Spectrum Strategy.  

Spectrum Management Working Group Proposals Target Roles of FCC, NTIA

On July 30, the Commerce Spectrum Management Advisory Committee (CSMAC) Working Group 1 released its Final Report (along with a Presentation) on the topic of governance. That report includes a number of proposals to improve the spectrum-management process that involve reassigning, consolidating, and/or transferring to a new federal agency functions currently performed by the FCC (for commercial spectrum) and NTIA (for federal spectrum).

In October 2018, the White House issued the "Presidential Memorandum on Developing a Sustainable Spectrum Strategy for America's Future."

CSMAC Working Group 1's mission was to evaluate whether the existing spectrum governance model is optimized to implement that (still under development) National Spectrum Strategy — and if not, to propose alternatives.

In its Final Report, Working Group 1 concludes that "the United States’ current approach for managing the use of spectrum is no longer effectively serving the needs of the entire stakeholder community and would benefit from reform." It therefore proposes a number of possible changes. They include:

• Creating a new "Full-Service Spectrum Agency" that would assume all spectrum-related responsibilities currently handled by the FCC and NTIA;
• Combining the two into a single, independent "Unity Agency," of which the FCC and NTIA would serve as subsidiary "offices," and empowering a single administrator with decision-making authority (thereby eliminating the need for FCC commissioners);
• Establishing a "Spectrum Resource Agency" that would be responsible for only a subset of the spectrum-related actions that the FCC and NTIA currently perform (that is, planning and allocation, international policy, R&D, and forecasting), with those agencies continuing to carry out spectrum assignments (including auctions), licensing, equipment authorization, and similar functions; and
• Transferring to a "New FCC" the spectrum management responsibilities of the NTIA — or, in the alternative, to a "New NTIA" the spectrum management responsibilities of the FCC.

In addition, Working Group 1's Final Report proposes several options to improve spectrum management, whether in combination with one of the reforms noted above or on their own. They include:

• An expanded focus on R&D;
• Revisions to the 2003 Memorandum of Understanding (MOU) between the FCC and NTIA; and
• A periodic review of spectrum governance models (that is, every 3-5 years).

For a summary of recent breakdowns in the intergovernmental spectrum coordination process, along with suggestions to revitalize such efforts moving forward, please take a look at Free State Foundation Visiting Fellow Gregory J. Vogt's June 15 Perspectives from FSF Scholars, "Coordinated Government Decisionmaking on Spectrum Issues: It's Vital to Locating More Spectrum for 5G Use."