Minorities Drive Wireless Demand; Will Federal Government Supply Spectrum?

Minorities Drive Wireless Demand; Will Federal Government Supply Spectrum?

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My son is a millennial, born twelve years ago this month.  When he was born, multiple television screens in one house was the norm, but it’s a norm he probably barely remembers.  His normal world is where there are three screens in his room, and none of them are connected to any walls.  Between a Kindle, a laptop, and a smartphone, he, like millions of other young Americans, effortlessly navigate cyberspace to Skype with grandma, chat with his mother, or conduct research as part of his homework assignments.

Black American and Latino communities more than any other community are driving the demand for devices that we use increasingly for our jobs and our businesses.  The minority communities’ use of wireless devices is disproportionately higher than White Americans.  According to Pew Research Center’s Internet and American Life Project, 92% of Black Americans own a cell phone.  Older Black Americans are keeping up with technology too as 77% of Black Americans 65 years and older own a cell phone. That is why it is ever increasingly important that our policymakers continue to get the policies right that affect our mobile future.

While our overindexing on social media is well documented, how the wireless industry has shaped the economy for us as consumers, workers, and entrepreneurs is even more important.  In the process of filing comments on the topic of spectrum policy with the U.S. House Committee on Energy and Commerce, I noted that job seekers have benefited from the growth and size of the wireless industry.  CTIA, a wireless trade association, reports that the wireless industry gained 1.6 million new jobs between 2007 and 2011.  Meanwhile the rest of the economy saw private sector jobs fall by 5.3 million during what was arguably the worst economic downturn since the 1930s.

This type of job growth in the wireless industry should signal to the Black American community that there is more to the mobile device than a tweet or a post to Facebook.  The wireless industry’s growth may provide more economic and employment opportunities for the Black American community, for example, where the unemployment rate in March 2014 was 12.4% and the number of unemployed Black Americans increased by 82,000 between February and March.

But that’s not all. There are implications for entrepreneurship from a vibrant wireless industry.  Given the high level of unemployment among Black Americans, self-employment has been an alternative for those that are locked out of labor markets.  Take for example Charlie Fyffe, an entrepreneur who started his gourmet bakery, Charlie’s Brownies, on Facebook.   Mr. Fyffe went on to set up a website of his own as well as raise funds for his business via Kickstarter, an online platform that allows small businesses to raise capital.  And in order for this to be possible, mobile devices, their apps platforms, and the natural resource that powers the industry, wireless spectrum, were all needed to work in concert. The mobile Internet economy is empowering many individuals in today’s uncertain economic times.

Spectrum is a necessary ingredient for a growing wireless industry and the ability for many to take advantage of entrepreneurial opportunities.  Entrepreneurs, especially ones that have invested in a website that optimizes their mobile presence should take an interest in knowing that the carriers their customers use allows them reliable access to her online business.  Job seekers who are interviewing on the phone or via Skype can’t afford for their carrier of choice to not have access to quality spectrum.

And what role can the Federal Communications Commission play in ensuring that the wireless industry gets access to quality spectrum?  One way is through what’s called an incentive auction where television broadcasters would voluntarily relinquish their spectrum to the FCC, and the FCC would auction off that spectrum to bidding wireless carriers.  Congress authorized this auction in the Middle Class Tax Relief and Job Creation Act of 2012.  Not only did Congress see this as a way to free up much-needed spectrum for commercial use, but proceeds from the auction would also be used to fund a nationwide public safety broadband network, one that could be used by the nation’s first responders to communicate across jurisdictions and respond effectively to catastrophic events.

Unfortunately, Sprint and T-Mobile, two of the top carriers, and their advocates have been agitating for restrictions on the amount of spectrum that other competitors, AT&T and Verizon, may bid on.  What would be the consequences of implementing a policy that restricted AT&T and Verizon’s participation in the auction?

If restrictions were placed on the amount of spectrum they were allowed to bid on, one consequence could be less revenue for funding the national public safety broadband  network.

The other consequence could be the potential economic and quality of service impact on consumers.  Entrepreneurs may not have the optimal bandwidth necessary for delivering content.  Consumers may experience lower quality voice or video streaming services because of an inadequate amount of bandwidth.  Imagine driving down a wide, debris free boulevard one minute and then slowing down significantly as you try to navigate a narrow, gravel country road.  That may be the type of service experience you encounter if more spectrum is not freed up for wireless use.

If we are serious about creating economic growth – especially in the minority community – funding the public safety network, and ensuring adequate future spectrum for commercial use, then we must make sure the FCC takes the necessary steps to get spectrum auction rules right and ensure that no carrier is restricted from bidding on the airwaves it needs.

 

 

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