The phrase “lightning speed” is almost a cliché these days. We are constantly on the go, whether it’s getting the kids ready for school, rushing to work, or off running errands. Americans have been defining and redefining the term “mobile” for decades.
That need for mobility has seeped into the ways we communicate with each other. A growing number of us are cutting the phone lines at home and relying entirely on wireless technology. Smartphone, iPad, laptop, apps, and free Wi-Fi are such a part of the telecommunications lexicon that even our school children are familiar with them.
Referring to these devices as “phones” or even cell phones is becoming a misnomer if not straight-up archaic. Wireless devices, including cell phones, are basically mobile information access terminals. We spend as much time using the keyboards on these devices to access information as we do talking to our friends and family with them.
For some users of these devices, our “friends and family” today are much more extended than our real friends. Our extended friends’ lists are the result of social networks such as Twitter, Facebook, and LinkedIn. We are re-tweeting, sharing, and liking links to information and news items, as well as posting our insights, comments, and opinions on news events, goods, services, and merchants. We conduct the majority of this social media or social networking activity with our wireless devices.
Driving the use of cellphones and smartphones are African and Hispanic American consumers. According to the Pew Internet and American Life Project, 49% of African and Hispanic adults have smartphones, compared to the overall average of 46% of all American adults that have a smartphone. Twenty-five percent of smartphone owners use their phones as the main source of access to the Internet.
While 83% of all American adults own a cell phone or another kind of wireless device, the percentage of African and Hispanic Americans owning a wireless device is 87%.
There is a demand for wireless devices but with this demand comes a squeeze on the wireless industry’s most precious resource: spectrum.
Spectrum refers to the wave of electromagnetic frequencies necessary for carrying signals from your cell phone to your carrier’s tower and eventually to the person you are calling. Think of the communication pathway between your phone and the cell towers that transfer your call as containing a two lane road, with one lane sending your voice to a friend while the other lane sends your friend’s voice to you.
Suppose two-thousand of these conversations are occurring at once in one neighborhood. The problem is when the 2,001st conversation tries to happen. That call may be squeezed in if there is enough capacity. If there is not enough capacity, if we cannot make enough room for two more lanes, there may be slow connections; calls may drop; or there may be no connection at all. This phenomenon is called “spectrum exhaust” and it coming to large, often majority-minority cities in 2013 or 2014.
The Federal Communications Commission (FCC) and the wireless industry acknowledge that the spectrum crunch is real and is coming. For example, AT&T determined that between 2007, the year it released its first iPhone, and 2010, data traffic on its network increased by 8,000%. AT&T estimated that by the first five to seven weeks of 2015, the amount of data traffic having traveled over its network will equal all the data traffic that traveled over its network in 2010.
This was the analysis that drove AT&T’s proposed takeover of T-Mobile USA, a subsidiary of Deutsche Telekom. AT&T hoped to integrate T-Mobile’s network into its network, thus speeding up consumer accessibility to additional capacity. Those hopes were dashed late last year when, as a result of a lawsuit by the U.S. Department of Justice, AT&T withdrew its petition with the FCC to merge with T-Mobile.
The full impact on minority consumers has yet to be felt as wireless carriers, including AT&T, respond to spectrum exhaust in large markets by raising prices to mediate demand. Given the disproportionately higher rate of demand for wireless services versus demand by white consumers, one can expect price increases to change usage patterns among Blacks and Hispanics including reducing time on the Internet or changing wireless calling and data plans to fit tightened budgets. Unless the FCC deploys more spectrum fast, minority consumers will face a challenge to the affordability and accessibility of the technology that holds the most promise for helping them achieve full access to all of society’s opportunities.