Looming Spectrum Shortage Threatens Mobile Economy
In October, the Federal Communications Commission proposed a framework to address the looming spectrum crisis. If you’ve ever experienced sluggish internet access or dropped calls on your mobile device, you have a hint about what lies ahead.
Over 50% of wireless customers are now using smartphones. The widespread adoption of these devices is occurring at a faster rate than any other technology. Ever. Faster than electricity, the internet, radio, or TV. As mobile device usage grows, the amount of data filling the airwaves is doubling every year.
Our existing wireless infrastructure is struggling to manage all this traffic and will be unable to handle its continued growth. Wireless spectrum – the airwaves over which mobile voice and data travel – is a scarce resource. Most spectrum is controlled – and underutilized – by broadcasters or the government. Only a small percentage is allocated to consumers for wireless data.
The FCC expects demand for wireless spectrum to exceed our resources at some point next year. This will leave consumers struggling to find a connection and could cripple the app marketplace. To avoid this outcome and ensure that the mobile economy can meet consumer needs, the federal government must make more spectrum available. A lot more.
Its first step is the FCC’s planned incentive auctions to free up broadcaster spectrum for mobile communications. As a small business developer and mentor to young app makers, I see new companies innovating every day on wireless data networks. The way these spectrum auctions are managed in Washington will have a profound impact on my business and the future of an app industry experiencing explosive growth.
Mobile apps have become a force in our economy in a very short period of time. When Apple introduced the App Store in 2008, it sparked a renaissance in the software industry. Independent developers accustomed to working on enterprise software projects discovered a new platform where they could write standalone consumer-facing products. Developers found they could quickly bring their ideas to market while avoiding traditional barriers to entry like up-front marketing costs, publisher delays, and piracy.
This fostered a new brand of entrepreneur and triggered a wave of innovation that in four years has produced a $20 billion marketplace. By 2015, the app economy is projected to top $100 billion. The meteoric growth of this industry during a global economic slowdown demonstrates its strength and potential. The emergence of the app economy is an example of American innovation at its best.
The abundance of wireless internet made this possible. Smartphones and tablets have revolutionized the way we receive information because ubiquitous internet connectivity allows consumers uninterrupted access to data. Wi-fi can provide access through a patchwork of independent networks, but wireless carrier data services are the glue that ensures consumers can use their apps everywhere.
For this reason, the app industry needs the incentive auctions to succeed. The additional spectrum can help lessen the strain on our wireless networks, even though the net result will provide only limited relief. Given the scarce amount of spectrum available, it is absolutely crucial the Commission manages this process expeditiously and efficiently.
When the FCC begins reallocating the limited spectrum that becomes available, its top priority must be to keep pace with surging demand. Both licensed (carrier) and unlicensed (wifi) spectrum are essential for the mobile app marketplace to succeed. Neither can be neglected.
If the government acts quickly to make more spectrum available and encourages investment in our wireless infrastructure, consumers will continue to enjoy the innovations that make our lives better and our economy stronger. Failure to do so will yield masses of unhappy consumers and our app economy will grind to a halt.
Ahmed Siddiqui is the creator and founder of the app Go Go Mongo and the San Francisco Bay Area Leader for Startup Weekend.