Will Congress set aside additional wireless spectrum for unlicensed use? Not if the House of Representatives has its way. House legislation authorizing wireless spectrum auctions has been rolled into the payroll tax extension measure currently being debated on Capitol Hill. The House bill, which former FCC Chairman Reed Hundt called the “single worst telecom bill” he’d ever seen, would prohibit the FCC from granting unlicensed spectrum.
At a hearing yesterday, Sens. John Kerry (D-Mass.) and Jerry Moran (R-Kan.) urged the House not to focus solely on the revenue side of the spectrum equation. “Maximizing efficiencies, innovation, competition, and the public interest are goals that ought to guide our spectrum policy,” said Kerry. “Revenue is not the highest goal.”
“The next generation of Wi-Fi is really critical,” Kerry added, noting 65 percent of all tablet users use those devices exclusively on Wi-Fi, up 5 percent from a year ago; and close to 50 percent of all IP traffic by 2014-15 is estimated to be delivered over Wi-Fi. “There will be an explosion in use,” adding that it would be “self-defeating” and “extremely short-sighted” not to plan for this growth.
Sen. Moran noted that the way to maximize revenue is to “leave some unlicensed spectrum available to allow competition.”
“The companies that grow up out of that unlicensed spectrum create jobs and pay taxes, and then we have a growing economy,” Moran noted. “It’s an incredible opportunity to enable innovation, increase competition and expand broadband.”
Is Unlicensed Spectrum Really Free?
Consumer advocate Mark Cooper, director of research at the Consumer Federation of America, argued that unlicensed spectrum generates significant economic value. “By every measure of economic performance, the unlicensed model performed as well as the exclusive licensed model. The number of unlicensed spectrum users exceeds licensed users by 30 percent.”
He also said unlicensed activity generates $50 billion of economic value: “The unlicensed model succeeds because it is not free. In order to use the unlicensed spectrum, vendors must design devices that consumers buy. Applications must be written and deployed. Base stations must be deployed. All of that is paid for. The unlicensed model succeeds because it’s decentralized.”
James Assey, executive vice president at the National Cable and Telecommunications Association, noted Wi-Fi and its use of unlicensed spectrum is critical to cable’s future. “In the modern age, we are focused on delivering content to the three ‘Ws’ — what you want, when you want it, where you want it,” Assey said.
He continued, “This is a real business. Real investments are going into this,” noting the cable industry has built tens of thousands of Wi-Fi hotspots and has connected them with roaming agreements. “This creates tremendous consumer value at a cost that is manageable to build and scale these networks.”
Assey expects several factors will drive cable’s use of unlicensed spectrum, including:
>> An increase in venues as operators leverage existing plant on poles to create metro access;
>> Session growth, as consumers connect more wireless devices to the Internet; and
>> Usage growth, as consumers move beyond Web pages to access video content; as small and medium-sized businesses expand Wi-Fi use; and as carriers increasingly offload their licensed traffic onto the unlicensed network.
“It’s not either/or [licensed versus unlicensed]. It’s about both,” Assey said. “If we stop and think about the future that we are going to provide, we need to give the FCC enough flexibility to make that future a reality.”
Sen. Kerry advised that those interested in reserving some unlicensed spectrum from expected auctions to communicate those desires to Congress.
— Jennifer Whalen