Data Called All-Important in Fueling Growth of Wireless in a Smartphone Age

"The Internet really is driving mobile,” Bazelon said. “You go downstairs [to the show’s floor] and look at all the new mobile devices. Part of the reason everybody is buying a new device and they're developing these new devices is because there are so many great, innovative and life-changing products and services from the Internet companies.” Carriers are investing in networks “not because people are making more phone calls, but because there’s more data usage,” he said. “That’s creating jobs and economic growth."

Using mobile phones for data has a “multiplier” effect, Bazelon said. “If you're using your phone for Internet service you're finding new businesses, you're streaming movies or music, you're getting advertising, so the impact on the economy is much greater,” he said. The change will continue and that will mean more jobs and economic growth, he said. “That’s important for policymakers to take note of,” he said. “Regulations that they have today could stifle future innovation which would create jobs and economic growth."

Bazelon noted that in the past eight years in the U.S. there’s been a 40-fold increase in demand on wireless networks. The number of cell sites in the U.S. has less than doubled, as has the amount of capital expended by carriers on spectrum, he said. The amount of spectrum available for wireless broadband has approximately doubled. “Going forward we are going to be using more efficient technologies as we move on to LTE,” Bazelon said. “Carriers are inevitably going to continue to invest in new equipment and cell division technologies to increase the capacity of the networks, but without more spectrum that’s going to be increasingly expensive.” Without more spectrum for broadband, wireless “is not going to fall off a cliff and disappear as a service, but it will be a more expensive service with tighter caps,” he said. “We're going to be losing out a lot if we don’t take the path of more spectrum and lower costs. We know there’s a lot of jobs and economic development at stake."

Attorney Ari Fitzgerald of Hogan Lovells, wireless adviser to then-FCC Chairman William Kennard, said “spectrum is key. If we are going to continue this growth, we need more spectrum” particularly in the “beachfront” range of spectrum below 3.7 GHz. “This is the most valuable spectrum,” he said. “Unlike many countries of the world, our government controls a lot of this spectrum and a good amount of it is also held by broadcasters.” Federal regulators are making good progress in making broadcast and government spectrum available for broadband, Fitzgerald said. “But frankly, given the capacity needs, we need to set in motion some kind of process, a regular process, that will ensure that this insatiable appetite that we have for spectrum is satisfied. We're not going to do that unless we do a better job of making sure that government uses spectrum more efficiently.” He said there’s a lot of work going on now on 1755-1780 MHz, but said efforts are also needed on the “front end” so that when agencies apply for assignments for additional spectrum, NTIA should ask if the requirements can be met with commercial systems. NTIA needs to ask, “do you really need to have this spectrum licensed, do you need to be the ones authorized to use this spectrum,” he said. “If we start asking those questions on the front end, we might be able to avoid the disruption and the problems that we have relocating government users."

Fitzgerald said much is at stake. “Half of U.S. consumers own smartphones,” he noted. “Three quarters of all tablets being used in the world are being used in the United States. The mobile app economy alone accounts for 520,000 jobs in this country. Four million people have jobs that are wireless related."

Karen Evans of KE&T Partners said government agencies are nervous about employees bringing their mobile devices to work with them, but that the threat of budget sequestration will mean more focus on government employees doing their jobs more efficiently. Evans has worked as the administrator of the Office of Management and Budget’s Office of Electronic Government and Information Technology. “That is going to force the federal agencies really to take on these new opportunities to reduce their operating costs,” she said. “Because [agencies] are not going to be able to spend the money, they will be more creative and this is the way they're going to go is through mobile technology.”