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Policy

1:00pm June 6, 2013

Future Wireless Industry Growth Requires Fair Auctions

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By Clayola Brown, President, A. Philip Randolph Institute

Access to fast, mobile broadband is a necessity for a woman’s modern life.  No longer simply a convenience, or a resource for men, wireless broadband enables us to start our own businesses, pursue our educational aspirations, perform everyday tasks, and quickly access information on the go.  In fact, within two years, the majority of Americans will depend on mobile devices as their primary means of accessing the Internet.

Advanced mobile networks deliver a variety of crucial consumer benefits that help us better our lives in significant ways.  For example, modern wireless devices and networks allow easy access to distance learning, educational enrichment, and career advancement opportunities.  A recent Pew Research Center Report confirmed that wireless Internet service is an important educational tool: 73 percent of U.S. students and teachers use smartphones to complete and grade homework respectively, and 50 percent of employers use e-learning to train workers.

Advanced mobile networks also provide greater access to health care, including mHealth and telemedicine services.  These services reduce medical costs and eliminate the need for some face-to-face medical appointments.  Within the next few years, mHealth is expected to save patients $21.1 billion per year. For many, however, the increased quality of life and convenience outweigh even the savings.

These and other life-enhancing benefits would not be possible without substantial investment by U.S. mobile broadband providers.  Last month, Steve Largent, president and CEO of CTIA, the U.S. wireless trade association, lauded this commitment in his keynote speech at this year’s CTIA annual conference.  He noted that U.S. operators invested more than $30 billion into our country’s broadband networks last year, “an all-time high for one year.”

Only with continued investment will service providers be able to keep pace with increasing demand for mobile services. The CTIA study revealed that from 2011 to 2012, wireless data traffic increased 69.3.  In fact, the U.S. wireless industry grew five times faster than our economy did last year.  This growth means substantial economic benefits for our country.  For example, a 2012 Deloitte study found that continued investments into our country’s wireless networks will conservatively total $25–53 billion, resulting in $73–151 billion in GDP growth and 371,000–771,000 new jobs by 2016.

Investment by U.S. mobile providers contributed to the build-out of fast, modern broadband networks. Our government’s light-touch regulatory framework encouraged this investment by providing regulatory and business certainty, fostering innovation in mobile devices, applications, and services to the benefit of consumers.  Despite the resounding success of this industry, skyrocketing demand for data-hungry devices has strained existing spectrum resources. Our carriers need additional spectrum to meet current and future consumer demand.  In his address, Largent explained the necessity of freeing more spectrum for consumer use, underscoring its benefit for health care, agriculture, education, energy, and small businesses. Our government, he urged, must make more spectrum available as soon as possible.

Spectrum auctions designed to free some spectrum for consumer use are scheduled for next year; however, to fuel future growth in the wireless sector and deliver additional consumer benefits, this auction must be both fair and competitive.  Regulators must ensure and encourage broad participation in these auctions by all mobile providers who need this spectrum to meet consumer demand.

Imposing restrictions on participation or limiting the types of spectrum that carriers can bid on, as some have proposed, would negatively impact the proceeds generated by the auction and ultimately undermine the wireless industry, slowing economic growth and innovation.  A Georgetown Spectrum Study showed that excluding some bidders from the auction could reduce revenues by about 40 percent, or $12 billion, and jeopardize funding for the nationwide public safety network.

We need an open, competitive spectrum auction to protect our robust wireless marketplace.  Fair auctions will encourage continued investment into our broadband networks; fuel innovation, consumer benefits, and job growth.

If we wish to secure our country’s ability to compete globally while improving standards of living over the long-term, we must ensure that all mothers, aunts, sisters and daughters have access to mobile broadband, as more often than not, we are intimately involved in making some of life’s most critical choices with the best interest of the family and future generation at heart.



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