A New Administration Brings Renewed Hope for Renewed FCC Spectrum Auction Authority

It has been 686 days since Congress allowed the FCC's spectrum auction authority to expire on March 9, 2023. Absent additional auctions, not to mention the identification of specific spectrum bands to be auctioned for commercial use, mobile operators will struggle to satisfy consumers' insatiable demand for wireless data.

Moreover, the U.S. could risk ceding mobile broadband leadership to its global adversaries – in particular, China, the national security concerns regarding which I wrote about recently in two posts to the FSF Blog.

As Rhonda Johnson, AT&T EVP, Federal Regulatory Relations, wrote in a January 15, 2025, blog post, "AT&T stands ready to invest in the next set of 'anything-is-possible' predictions about what 'you will' be able to do in the years to come" – but "[t]he private sector cannot acquire the spectrum it needs in the U.S. until Congress reauthorizes the FCC to conduct auctions and the government allocates more full-power mid-band spectrum for licensed commercial use."

Fortunately, there is reason for optimism.

First, in his Statement on being designated FCC Chairman, Brendan Carr prioritized "unleashing new opportunities for jobs and growth through agency actions on spectrum."

Second, at today's House Committee on Energy and Commerce Subcommittee on Communications and Technology hearing titled "Strengthening American Leadership in Wireless Technology," regarding which Free State Foundation Director of Policy Studies and Senior Fellow Seth L. Cooper blogged yesterday, Subcommittee Chair Richard Hudson (R-NC) noted the following in his Opening Remarks:

Last Congress, the [FCC's] spectrum auction authority expired for the first time due to disagreements about how spectrum resources should be allocated. These auctions have historically brought in billions to our national economy, with the highest spectrum auctions raising over $80 billion from private companies. It is simple economics: there is limited supply, unlimited demand, and a willingness to pay. We need to reauthorize the FCC's spectrum auction authority immediately.

Third, Senate Commerce Committee Chairman Ted Cruz (R-TX) reportedly has described renewal of the FCC's spectrum auction authority as "his top tech policy priority for reconciliation, a process that will allow the GOP to push through budget-related legislation with its slim Senate majority."

In March 2024, Senator Cruz and Senator John Thune (R-SD), the new Senate Majority Leader, introduced the Spectrum Pipeline Act of 2024, legislation that would have renewed the FCC's spectrum auction authority and required it to auction for full-power commercial use at least 1,250 megahertz within 6 years.

T-Mobile/UScellular Transaction Likely to Benefit Wireless 5G Consumers

On September 13, T-Mobile filed a public interest statement with the FCC in support of its proposed transaction with US Cellular. If approved, the T-Mobile/UScellular transaction likely would produce pro-competitive results. The merger would benefit UScellular subscribers by giving them access to a 5G mobile wireless network with faster speeds and higher data capacity. It also would enhance residential broadband competition by expanding consumer access in UScellular's service regions, especially in rural areas. On its face, the proposed combination does not appear to pose any significant competitive harm. The Commission should conduct a timely review of the T-Mobile/UScellular transaction and issue its decision within the agency’s 180-day shot clock.

The proposed T-Mobile/UScellular deal reportedly would result in T-Mobile acquiring UScellular's wireless operations, subscribers, and about 30% of its spectrum licenses for $4.4 billion. UScellular is a multi-regional wireless provider that serves about 4.5 million subscribers – or about 1% of the nation’s mobile wireless services market. Its subscribership has been declining in recent years. Strong competition from cable hybrid wireless mobile virtual network operators (MVNOs) Spectrum Mobile and Xfinity Mobile partly account for US Cellular's declines. Moreover, UScellular has lagged behind AT&T, T-Mobile, and Verizon – the three major nationwide mobile wireless providers in 5G network deployment.

Revenue reductions resulting from subscriber losses, as well as the burdens of servicing $2.9 billion in debts, are limiting its resources for future network investment. If UScellular were to continue operating as a standalone mobile provider, its competitiveness would probably diminish further.

T-Mobile's public interest statement presents a prima facie case that its proposed transaction with UScellular will bring public interest benefits that outweigh any potential competitive concerns. Today's dynamic wireless market provides the analytical context for the proposed T-Mobile/UScellular deal. As explained in the Free State Foundation’s June 2024 public comments to the FCC for its forthcoming 2024 Communications Marketplace Competition Report, there is effective competition among the mobile wireless segment of the broadband market. In 2022 and 2023, the three nationwide wireless providers significantly upgraded and expanded their 5G network coverage. Additionally, aspiring national provider EchoStar (which recently acquired DISH Network) announced in March of this year that its 5G network covers over 70% of the U.S. population. The large footprints of Xfinity Mobile and Spectrum Mobile also support competitive 5G wireless services to at least 16 million subscribers and counting.

Moreover, the T-Mobile/UScellular transaction is unlikely to reduce wireless competition. T-Mobile faces little challenge from UScellular due to its small market share, with a footprint that spans only about 10% of the nation's geographic territory. T-Mobile is the second-largest wireless provider, with nearly 126 million total subscriptions versus UScellular's 4.5 million. T-Mobile makes its pricing and service terms on a nationwide basis, and thus UScellular's presence in a given area is unlikely to impact T-Mobile's price offerings. According to the public interest statement, T-Mobile and UScellular do not have an overlapping competitive presence in only about 37% of the Cellular Marketing Areas (CMAs) that are implicated by the proposed transaction.* If the it is approved, most consumers would continue to have choices among nationwide providers T-Mobile, Verizon, and AT&T, and many consumers also would have choices among DISH Wireless and a cable wireless MVNO. 

Furthermore, T-Mobile's analysis indicates that the proposed acquisition of 30% of UScellular's spectrum portfolio would not trigger the FCC's spectrum screen analytical trigger in any cellular marketing area. This presumes that T-Mobile completes planned sales of certain spectrum licenses that it currently holds in the 800 MHz and 3.45 GHz bands. 

Under the terms of the proposed T-Mobile/UScellular transaction, UScellular subscribers would have the option of staying on their existing rate plans. T-Mobile estimates that at least some of UScellular's subscribers would experience a price decrease by changing to comparable plans offered by T-Mobile. If correct, and given existing competition in the market, the deal would not likely cause rates to increase for consumers. 

The transfer of spectrum licenses contemplated in the proposed T-Mobile/UScellular transaction triggers the FCC's review of the transaction under its public interest standard. The Commission's merger review process includes opportunity for public comments that could shed added light on the proposed deal. The agency will undertake its examination of the representations made in the public interest statement – including information redacted from public view – and it will more closely examine the potential effects in local markets. However, at this stage of the proceeding, the T-Mobile/UScellular transaction appears to be a strong candidate for approval. 

Importantly, the Commission should complete its transaction review within the agency's informal 180-day shot clock. Delays in completing reviews can accelerate subscriber losses in small providers and have other harmful impacts.

(*12/19/2024 - a correction has been made in this post to the percentage of CMAs in which the parties have an overlapping presence)

(*02/04/2025 - further edits have been made to more accurately refer to the transaction as an acquisition of assets and not a merger between the parties)

Ookla Year-End 2023 Reports Shows Further Rise in U.S. Broadband Speeds

On January 16, Ookla released its Global Speed Index reports for December 2023, including for the United States. According to Ookla, median upload/download speeds in the U.S. for December 2023 were 227.27/26.59 Mbps for fixed broadband services and 111.01/9.68 Mbps for mobile broadband services. Those overall figures show significant improvement over Ookla's findings from March 2023 of 197.84/23.02 Mbps for fixed broadband services, and 81.26/9.44 Mbps for mobile broadband services. (For background, see my April 2023 blog post, "Ookla Reports Rising Fixed and Mobile Broadband Speeds in Early 2023.")

 

Ookla's December 2023 findings are yet another indicator of the success of the federal light-touch regulatory framework for broadband Internet access services, which encourages private market investment and innovation. That pro-free market approach was established in the FCC's 2017 Restoring Internet Freedom Order. Supporters of public utility regulation made dire predictions that the RIF Order would cause the Internet to slow to one word at a time or shuffle most Americans off into slow lanes while corporate elites enjoy fast lane privileges. The scare stories have proven totally false. 

 

On December 14, the Free State Foundation filed comments in the Securing and Safeguarding the Open Internet proceeding, recommending that the FCC stick to the pro-market policy of the RIF Order as the best way to promote continued advancements in broadband access for all Americans. The RIF Order's repeal of the agency's short-lived public utility regulation did not slow anyone’s speeds, and Ookla’s reports instead show that broadband speeds have continued to increase. FSF's comments urged the Commission to not reimpose public utility regulation on broadband Internet access services. 

Cable MVNOs Subscribership Continues to Climb in 2023

Cable wireless mobile virtual network operators (MVNOs) are effective intermodal competitors in today's communications marketplace. An article published in Fierce Wireless on October 27 of this year summarizes third quarter growth in cable MVNO services by the two largest services, Comcast's Xfinity Mobile and Charter's Spectrum Mobile:

Comcast yesterday reported the company added 294,000 wireless lines in Q3 2023. Comcast now has 6.2 million wireless lines in total. In contrast, Charter today reported it added 594,000 wireless lines in Q3, bringing its total wireless lines to 7.2 million.

My August 1 blog post observed that in the second quarter of 2023, Xfinity Mobile gained 316,000 lines and Spectrum Mobile gained 648,000 lines. 

 

Significant growth potential remains for both cable MVNO services within their respective geographic footprints. And as noted in the Fierce Wireless article, the cost-efficiency and competitiveness of those services is likely to improve in the near future as a result of buildouts of their own wireless infrastructure using small cells and licensed CBRS spectrum. Deployment of such networks as well as increased offloading of mobile traffic onto cable MVNO wi-fi networks, will make hybrid cable MVNOs less and less "virtual" and make their services less costly to provide by reducing their reliance on leasing wholesale access to mobile cellular networks. 

 

Importantly, the mobile broadband choices offered by cable MVNO services did not exist when the FCC imposed public utility regulation on mobile broadband Internet access services in the 2015 Title II Order. That order proffered "switching costs" for mobile broadband consumers and supposed incentives and ability by mobile providers to unreasonably discriminate against their own subscribers as supposed justifications for imposing public utility regulation. Commentsfiled with the FCC by the Free State Foundation in July 2017 explained that those rationales were not persuasive. In late 2023, competition from cable MVNOs further undermines those rationales for imposing public utility regulation. Any wireless provider that blocks or throttles their own subscribers' access to legal content via the Internet or otherwise unreasonably discriminates against their own subscribers risks massive loss of subscribership. Instead of foisting new regulatory restrictions on mobile broadband providers to address non-existent harms, the Commission should maintain the pro-market, pro-investment, and pro-innovation federal light-touch policy set forth in the 2018 Restoring Internet Freedom Order. 

AT&T Launches 5G Fixed Wireless Access Service

On Tuesday, AT&T announced the introduction of AT&T Internet Air, its 5G fixed wireless access (FWA) home Internet service, in 16 markets including Los Angeles, Philadelphia, and Detroit. Previously offered only to existing digital subscriber line (DSL) customers in certain areas, the expanded offering of AT&T Internet Air represents yet another milestone in the rapid rise of FWA as a viable competitive alternative to traditional wireline high-speed home Internet access.

In "Fixed Wireless Access Is Boosting Rural Broadband and Consumer Choice," an April 2022 Perspectives from FSF Scholars, FSF Director of Policy Studies and Senior Fellow Seth L. Cooper touted not only FWA's ability "to connect several million Americans in rural and small markets," but also to compete with wireline providers for home Internet customers in more populated markets. This announcement that AT&T is targeting major cities with its FWA service, along with the rapid FWA subscriber gains of T-Mobile, Verizon, and U.S. Cellular, confirm both of those predictions.

Source: AT&T Blog

In a blog post earlier this month, Mr. Cooper highlighted second-quarter FWA subscriber numbers from T-Mobile (509,000 net additions, for a total of 3.7 million), Verizon (384,000 net additions, for a total of 2.3 million, and U.S. Cellular (over 100,000 total subscribers). Notably, these services did not exist prior to 2021.

According to the Leichtman Research Group, T-Mobile and Verizon combined have added over 800,000 FWA subscribers for 5 quarters in a row. In the second quarter of 2023 alone, they added almost 900,000 subscribers – compared to less than 10,000 new cable broadband subscribers and a loss of nearly 62,000 by the top wireline phone companies.

In Comments filed in the FCC's 2022 Communications Marketplace Report proceeding, Free State Foundation scholars argued that the Commission should:

[C]ease its exclusively piecemeal evaluation of broadband marketplace competition that continues to rely on "siloed" service definitions. Instead, it should evaluate competition with a broader "broadband market" definition that takes into account fiber, cable, mobile, FWA, and satellite platforms. This broader outlook would more accurately reflect market realities and be a better guide to formulating Commission policy.

Ericsson Reports on Present and Future Growth of Mobile Services

The June 2023 edition of the "Ericsson Mobility Report" was released on June 23. The updated report features high-level view of global and regional developments and trends in mobile data services as well as projected growth forecasts. Although the June 2023 report does not include any figures specific to the United States, it does contain many useful insights regarding mobile data traffic increases, progress in 5G deployment, and potential growth in fixed wireless access (FWA) for the globe and for North America.

Among the report's findings, "[t]he uptake of 5G subscriptions in North America has been stronger than expected," and year's-end 2022 it had the highest 5G subscription penetration at 41%. Included in the report is a chart showing the disappearance of legacy 3G services in North America and strong growth in 4G LTE as well as 5G. Yet although 4G subscriptions increased in 2022, the report expects those numbers to decline starting this year. According to the report's projection, in 2028, North America will have the highest 5G penetration at 91%.

The report credits the use of mid-band spectrum in North American for strong 5G services growth, and it expects there to be over 250 million subscriptions by the end of this year. And the report projects there to be about 410 million 5G subscriptions by 2028. Important to this 5G growth is FWA services. The report observes that "FWA, providing high-speed internet to homes and small businesses, has become the primary technology fueling fixed broadband growth in North America." 

 

Moreover, the report projects that average monthly mobile data usage per smartphone in North American will rise to 58 GB in 2029, and it credits this to unlimited data plans and improved 5G network capacity supporting new mobile and FWA 5G subscribers. 

 

Notably, the report also found that monthly global mobile data traffic reached 126 exabytes (EB) by the first quarter of this year – nearly double what it was just two years prior.  

 

But in order to fully support projected future increases in mobile data traffic in the U.S. – as well as support potential stronger-than-expected growth in 5G services – more spectrum will need to be made available for private commercial use. Now that the U.S. spectrum pipeline for commercial wireless services has run empty and the FCC's authority for conducting competitive bidding spectrum license auctions has lapsed, the clear policy priority should be to replenish the pipeline with more mid-band spectrum from commercial licensing and to renew the Commission's authority conduct auctions and license spectrum use on an exclusive basis. 

FCC Set to Vote on Future Spectrum Use in the 12.2 GHz and 12.7 GHz Bands

At its May 18 public hearing, the FCC will be voting on a Report and Order and Further Notice of Proposed Rulemaking regarding use of spectrum in the 12.-12-7 GHz (12.2 GHz) band. The draft Report and Order, if approved by the Commission, would not authorize high-powered terrestrial mobile broadband services to operate in the 12.2 GHz band. The Report and Order cites apparent concerns about significant risk of harmful interference with existing and emergent services that use the 12.2 GHz band, including satellite services, as the basis for that policy conclusion. However, the Report and Order would continue investigation into the potential for terrestrial fixed use or unlicensed use in the 12.2 GHz band.  

The 12.2 GHz item now teed up for the Commission's May 18 public meeting also includes a Notice of Proposed Rulemaking and Order regarding expanded use of the 12.7-13.25 GHz (12.7 GHz) band for mobile broadband or other use. In its draft NPRM and Order, the Commission states:

[W]e propose to repurpose some or all of the 550 megahertz of mid-band spectrum for mobile broadband or other expanded use. The record demonstrates substantial support for repurposing these mid-band frequencies for next-generation wireless technologies including 5G, 5G Advanced, and 6G services that will depend on extremely high data rates, and the reliability, low latency, and capacity that the 12.7 GHz band spectrum can provide.

Without expressing any view on the merits of the Commission's determinations about potential significant harmful signal interference in the 12.2 GHz band or on any specific proposals for future use in the 12.7 GHz band, the Commission's forthcoming vote on the 12.2 GHz and 12.7 GHz bands is important because it is a step toward maximizing use of those valuable mid-band spectrum resources. The NPRM and Order on the 12.7 GHz rightly recognizes the significance of mid-band spectrum for the future of commercial wireless services in the U.S. And with the 12.2 GHz/12.7 GHz item scheduled for a vote on May 18, Commission appears to making a good faith effort to fulfill its public trust to promote valuable use of spectrum. 

Ookla Reports Rising Fixed and Mobile Broadband Speeds in Early 2023

On April 17, Ookla released its Market Report for the United States for the first quarter of 2023. According to Ookla, during the first quarter of the year, Charter Communications' Spectrum was ranked highest among fixed broadband services with download speeds of 234.8 Mbps. Comcast was a close second for fixed providers with speeds of 232.85 Mbps. For mobile providers, T-Mobile ranked first with download speeds of 165.22 Mbps, and Verizon Wireless was second at 74.5 Mbps. Oookla's Market Report provides additional breakdowns for both fixed and mobile services for consistency and latency and performance in supporting video services. The report also includes rankings for fixed broadband by region and for major cities as well as separate ranking among mobile providers for 5G performance and availability.

Coinciding with the release of its U.S. Market Report for Q1 2023, Ookla also released updated findings for March 2023. Ookla found that median upload/download speeds in the U.S. for last month were 197.84/23.02 Mbps for fixed broadband services, and 81.26/9.44 Mbps for mobile broadband services.

The Ookla report's speed findings for early 2023 are an indicator of continuing improvements in broadband service capabilities and network deployment in the United States. The report's findings also are a reflection of the federal light-touch regulatory framework for broadband Internet access services, which encourages private market investment and innovation. Future improvements in broadband access are best achievable by maintaining the pro-free market approach embodied in the FCC's 2017 Restoring Internet Freedom Order. Additionally, Congress and the Commission take further steps to build on the progress being made in this space. My January 2023 Perspectives from FSF Scholars, "The 2022 Communications Marketplace Report: Timely FCC Action Could Accelerate Next-Gen Broadband Deployment," identified three such steps: (1) prioritize the lower 3 GHz band and other spectrum bands for repurposing for commercial services; (2) adopt fee caps and "shot clocks" on deployments of wireline facilities in state and local rights-of-way; and (3) ensure equitable access to broadband by prohibiting intentional discrimination, and not by imposing disparate impact liability. 

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. 

Ookla Report Shows U.S. Progress in 5G Mobile Wireless Speeds

The boost to mobile wireless speeds from 5G networks – and increasing use of C-band spectrum for 5G – are reflected in Ookla's Speedtest Global Index for the United States for the third quarter of 2022. According to Ookla: 

T-Mobile had the fastest median 5G download speed in the U.S. at 193.06 Mbps during Q3 2022, a slight increase over Q2 2022. Verizon Wireless remained second, and saw a slight increase to 119.80 Mbps in Q3 2022. AT&T remained third at 81.22 Mbps — a slight increase from Q2 2022.

For the third quarter of this year, Ookla found that the median download/upload speeds for mobile wireless broadband in the U.S. – encompassing 5G as well as earlier generation networks – was 68.34 Mbps/8.56 Mbps and the mean speeds were 141.54 Mbps/15.48 Mbps. Ookla's report also includes comparative evaluations of latency and video support capabilities by the three competing nationwide mobile wireless providers.

 

Again, speed and other performance figures can be expected to continue to improve by the end of this year and well into 2023 – particularly for 5G – as AT&T and Verizon continue to phase-in their licensed C-band spectrum for 5G services and T-Mobile brings online additional licensed spectrum in the 2.5 GHz band that it has acquired through the FCC's Auction 108. 

Growing Mobile App Economy Depends on Healthy Broadband Infrastructure Market

For a roundup of mobile app consumer trends among different countries, look no further than App Annie Research's "State of Mobile in 2022" report. Among other things, the report observes continuing increases in the amount of time consumers spend using on their mobile devices. The global average climbed to 4.8 hours per day, and the U.S. average rose to about 4.5 hours per day. The report ranks the most popular apps for games, news, ridesharing and travel, shopping, social media and more. And it highlights the lucrative market for mobile advertising.

Although the "State of Mobile in 2022" report focuses on app content and consumer preferences, the heavy-volume use of streaming mobile apps and mobile downloads depends on a pro-investment and pro-innovation environment for fixed and mobile broadband network facilities that can supply ever-growing demands. As Free State Foundation scholars have explained, such an environment can be secured by making more spectrum available for commercial services, removing regulatory cost barriers to fiber deployment (because mobile traffic also relies heavily on wireline networks), and avoiding regulatory obstacles to 3G to 5G transitions. 

T-Mobile’s Education Initiative Connects 3 Million Students

T-Mobile just announced that it connected over 3 million students in a single year through its free Internet program for school-age kids. This is a significant benchmark for such a recent educational initiative. 

Responding to the struggles many students faced with staying connected for remote learning, T-Mobile launched “Project 10Million” in September 2020, near the height of pandemic school closures. Project 10Million provides students enrolled in the National School Lunch Program with free high-speed data, free wireless hotspots, and at-cost devices. School administrators apply on behalf of their students, which helps maximize the program’s reach. In total, T-Mobile committed $10.7 billion towards its goal of connecting at least 10 million students by 2025.

Now with 3 million students connected in Project 10Million’s first year, T-Mobile’s investment is paying off, and it’s well on pace to reach 10 million students. This makes Project 10Million one of the largest and most successful private programs ensuring low-income persons get and stay connected.

Free State Foundation scholars support private initiatives by our nation’s broadband providers that boost adoption and narrow the digital divide. T-Mobile’s initiative is commendable, especially with the COVID-19 pandemic still impacting everyday life.

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.

FCC Should Boost 5G Backhaul by Updating Rules in 70/80/90 GHz Bands

American success in the race to 5G depends on a strong supply of backhaul for transmitting ever-increasing volumes of mobile and fixed wireless data. To help enhance wireless backhaul capacity, the Commission should modernize its antenna rules so that small cells can provide backhaul in the 70/80/90 GHz spectrum bands. 

Backhaul connections route voice and data traffic from mobile and fixed wireless providers' cell sites to mobile switching centers that link to the providers' core networks, the public switched telephone network, and the Internet. Wireless spectrum provides a vitally important transmission medium for backhaul. In its Sixteenth Wireless Competition Report (2013), the FCC recognized that "[m]obile backhaul needs will keep increasing as wireless carriers continue to deploy LTE technology in their networks." This was undoubtedly true as mobile networks transitioned to 4G, and it remains equally true now that 5G networks are being deployed. According to Cisco's 2021 Annual Internet Report, there will be 299 million mobile wireless users in the U.S. in 2023, up from 285.3 million in 2018, and there will be 3.4 connected mobile devices per capita in 2023 compared to 1.7 devices in 2018. Additional backhaul capacity is needed to help support data traffic increases resulting from anticipated future demand, including continuing growth in wireless viewing of HD and even 4K video.

But the Commission's old antenna rules were not established with small cells in mind. Technical changes made to those rules back in 2005 long predate 5G technological advances. In its June 2020 rulemaking notice, the Commission stated that the 70/80/90 GHz millimeter wave bands have been underutilized. Recognizing these facts, the Commission proposed to update its antenna rules for the 70/80 GHz band, and it sought comment on whether to make similar updates to its rules for the 90 GHz band. 

 

Modernization of the Commission's antenna rules requires harmonization between federal and non-federal users of the 70/80/90 GHz bands. Fortunately, there appears to be an industry consensus that antenna rule updates to accommodate small cells won't interfere with other uses of that spectrum. A prime opportunity now exists to boost 5G backhaul in those bands, and that opportunity needs to be seized without delay.

 

A February 2021 report by the Boston Consulting Group (BCG) estimates that 5G infrastructure buildout will directly contribute $400-500 billion to U.S. GDP and create up to 1 million jobs over the next ten years. But BCG also estimates nationwide losses of $25 billion in potential benefits for every 6-month stall in 5G deployment. Given the importance of backhaul to next-generation wireless networks as well as the sizable economic benefits to Americans resulting from timely deployment of 5G, the Commission should take prompt action to update its rules for the 70/80/90 GHz bands. 

Consumer Survey Reveals That the Number of U.S. Homes with Broadband Access Continues to Rise

Consumer research conducted recently by the Leichtman Research Group (LRG) confirms two trends: one, that the number of Americans with broadband Internet access at home continues to grow; and two, that in 2020 the amount of time spent online has increased dramatically.

The FCC in April released the 2020 Broadband Deployment Report. As Free State Foundation Director of Policy Studies and Senior Fellow Seth L. Cooper highlighted in a May 11 Perspectives from FSF Scholars, the report showed that 94.4 percent of the U.S. population had access to broadband at the end of 2018. A recent telephone survey demonstrates that the number of consumers subscribing to broadband is similarly large and still expanding.

In a December 28 press release, LRG reports that 86 percent of U.S. households currently subscribe to Internet access service, the vast majority of which – 97 percent – meets or exceeds the FCC's definition of "broadband" (that is, 25 Mbps downstream and 3 Mbps upstream). That is a 5 percent increase over just 5 years. An additional 7 percent access the Internet on a smartphone.

LRG also found that, no doubt in response to the COVID-19 public health crisis, Americans are spending substantially more time online: 5.3 hours per day in 2020 versus 3.7 hours a day in 2019. Fortunately, U.S. broadband infrastructure has taken this heightened demand in stride. Thanks to the FCC's light-touch regulatory oversight, broadband network operators have made the private investments required to respond to competitive challenges and unforeseeable increases in demand.

Senators Reaffirm the Free-Market Path to 5G

On September 30, Sen. John Thune and several Senate colleagues sent a letter to President Donald Trump, commending his support for a private-sector driven approach to 5G. The letter raises valid concerns about a recent Request For Information (RFI) released by Department of Defense that "contradicts the successful free-market strategy" the President has embraced for 5G. According to the letter, "[r]ather than rely on private industry and market forces to foster multiple, facilities-based 5G networks, the RFI seeks information on a government-managed process for 5G networks." The letter continues: "Nationalizing 5G and experimenting with untested models for 5G deployment is not the way the United States will win the 5G race." Sen. Thune and his colleagues urge the President "to remain on the free-market path you have articulated, a path that will enable the United States to win the global 5G race."

Below is a tweet from Free State Foundation President Randolph May:

I agree with the sentiments expressed in this letter to @WhiteHouse by @SenJohnThune and his @Senate colleagues that private sector leadership is essential to #5G U.S. leadership. https://t.co/0Oof27LGUv #5GForEveryone #5GFAST pic.twitter.com/nY6v3QHcUI

— Free State Foundation (@FSFthinktank) September 30, 2020

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.

Cable Wireless Service Entrants Poised to Increase Market's Competitiveness

Yesterday, Free State Foundation President Randolph May and I filed public comments with the U.S. Department of Justice regarding its proposed settlement for the T-Mobile/Sprint merger. Our comments addressed the dynamic communications market context of the proposed merger, including existing and potential competition to wireless carriers: 

Wireless market entry by Comcast and Charter Communications using hybrid Wi- Fi/cellular mobile wireless networks further diminish the likelihood of significant price increases or other anti-competitive conduct post-merger. Traditional cable operators are established providers of bundled voice, video, and data services. They are well suited to provide competitive mobile wireless services by leveraging their existing broadband network capacity and nationwide deployment of Wi-Fi hotspots and leasing network capacity for out-of-area voice and data transmission. As of the second quarter of 2019, Xfinity Mobile reportedly served 1.6 million subscribers and Spectrum Mobile reportedly served 518,000 subscribers. Those subscriber numbers are widely expected to increase. 

Close attention ought to be paid to future subscriber numbers for both cable wireless entrants. But there are other indications that these new entrants will further increase the market's competitiveness for mobile wireless services. According to reports, Xfinity Mobile and Spectrum Mobile are both increasing mobile data traffic offloads from leased Verizon network capacity onto their cable Wi-Fi networks. This competitive strategy reduces their lease payments. Also, both Xfinity Mobile and Spectrum Mobile reportedly have plans in the works to offer 5G wireless network services in future. And the largest multi-regional wireless carrier has reportedly acknowledged publicly competitive pressures by cable wireless entrants. 

(H/T to LightReading's Mike Dano for his incisive reporting and analysis.)