Yesterday, Recon Analytics released a study that quantifies the wireless broadband industry’s impact on the U.S. economy. According to the report commissioned by CTIA-The Wireless Association, the industry added $195.5 billion to the U.S. gross domestic product (GDP) in 2011, and could lead to nearly $1.5 trillion in productivity gains over the next ten years.
Other findings show that in 2011 wireless services produced $33 billion in productivity improvements for U.S. businesses in nine categories, and contributed $88.6 billion to local, state and federal governments in 2011 via industry tax, fee, and surcharge payments contributed.
Most impressive, given the employment challenges the nation continues to face, is that in 2011 the U.S. wireless industry was responsible for 3.8 million jobs, directly or indirectly, a gain of approximately 200,000 jobs in the past six years despite a major global recession.
The report shows that the wireless industry is stronger than ever and is poised to continue creating a better economic outlook for the country; and that means more job opportunities for minority communities whose unemployment numbers eclipse those of other races.
Of course this continued wireless economic boom is contingent on the outcome of the impending spectrum crunch.
The wireless industry has long been urging the Federal Communications Commission to take spectrum back from broadcasters and put it to what they say is the higher, better use of wireless broadband, while broadcasters say their one-to-many delivery system is more efficient and that their local news and programming for an over-the-air only viewership of often diverse, elderly and low-income populations is in the public’s best interest. Who is right?
According to the report, the best use of additional spectrum is by placing more with the industry already using what is has to boost GDP and employment, build government revenues and improve U.S. productivity. That would be the wireless industry.
Yesterday, industry leaders gathered to discuss the results of the report. Jim Cicconi, AT&T Senior Executive Vice President of External & Legislative Affairs, stated, data should drive policy; and [data] shows we need more spectrum and capacity to spur adoption and use, especially amongst minorities. More spectrum means the industry can work better with economies of scale. That means lower entry-prices and monthly data price points for consumers, in particular minorities who are adopting wireless as a primary means of accessing the internet.
Already consumers are reaping benefits. According to the report, American consumers paid less than a nickel per minute ($0.049) of use last year, one of the lowest rates in the world, down from more than 19 cents in 2000. By comparison, consumers in Europe paid, on average, nearly 17 cents (0.1670) per minute, more than three times the U.S. price. The costs of wireless data fell by half between 2010 and 2011 alone, from about eight cents a megabyte to four cents a megabyte. Text messaging costs also are down on a per message basis as unlimited texting plans have boosted message volume by enabling consumers to text at will.
Cicconi and others are quick to note that spectrum alone is not the solution, but that it must be coupled with investment and development.
Roger Entner, author of the report, warns, “To keep the growth going, the wireless industry not only needs additional spectrum, but also policies that won’t get in the way of critical network investment.”