In a smart piece for Fierce Wireless, Anna-Maria Kovacs, Visiting Senior Policy Scholar at Georgetown University, looks at the FCC’s latest Wireless Competition report:
Of course, consumers have myriad other choices with regard to their wireless experience. They choose among various types of service plans: paid v. prepaid, individual v. family, limited v. unlimited, various mixes of voice/text/data. They also choose among hundreds of devices, a few operating systems, and millions of applications. By the time a consumer has chosen a carrier, a service plan, a device, and operating system, that individual has chosen among literally hundreds of possibilities. It is not surprising that this intense competition at various levels of the wireless ecosystem has provided Americans with the lowest prices and the greatest value in the world.
Via Phil Goldstein of Fierce Wireless, the FCC is aiming to free up some significant frequencies for wireless use within a year:
The FCC signaled it plans to auction new spectrum blocks, the 1695-1710 MHz band and the 1755-1780 MHz band, as early as 2014, giving the CTIA and wireless carriers another victory in their quest to free up more radio waves for mobile broadband.
FCC Chairman Julius Genachowski wrote about the planned auction in a letter to Lawrence Strickling, head of the National Telecommunications and Information Administration. By law the FCC needs to notify the NTIA at least 18 months prior to the start of any auction.
Today, the FCC released its 2013 Wireless Competition Report. Rather predictably, the Commission has once again avoided concluding that the wireless market is competitive — despite the fact that four out of five consumers have a choice of five or more wireless service providers. In 2010, the Commission reversed the findings of six successive reports that acknowledged the mobile market’s success.
More Americans are choosing smartphones when they purchase a new phone (67 percent in 2012), and more are using them to go online (104 million in 2011). And according to today’s FCC report, “It is estimated that U.S. mobile data traffic increased 270 percent from 2010 to 2011, and that it has more than doubled each year for the past four years.”
The Commission is painting a picture of the market with this shade of gray to leave room for justification of future wireless regulation. But interestingly enough, FCC Chairman Julius Genachowski this morning stated: “Today, the U.S. broadband economy is thriving. The United States has regained global leadership in key areas of broadband innovation and infrastructure. Thanks to innovative American companies and entrepreneurs — and smart government policies — the U.S. is now the envy of the world in advanced wireless networks, devices, applications, among other areas.”
When measured by availability of consumer choices, options for consumer plans, device alternatives, apps or services, the American wireless market is extraordinarily competitive, far more so than practically any other sector of our economy. Failing to find “effective competition,” as the FCC has again done in this report, is not reflective of market realities.
Federal policy makers should redouble their efforts to make additional spectrum available for auction to commercial broadband providers by quickly conducting incentive auctions, approving secondary market transactions, enacting spectrum sharing arrangements and initiating a process to repurpose additional federal spectrum.
Brian Stelter of the New York Timesrecently reported ABC is working on an app for live streaming shows to mobile devices. According to the report, “The app, which would stream programming to the phones and tablets of cable and satellite subscribers, could become available to some subscribers this year.”
As media companies look for new ways to deliver content directly to mobile devices, wireless companies and the FCC should find new ways to provide the broadband capacity for consumers to enjoy these choices. It is critical that we have a regulatory environment that encourages innovation like freeing up spectrum and exploring the transition to all-IP networks which holds great promise for satisfying consumer broadband demand.
[Rosenworcel] touted the upcoming incentive auctions as critical for putting more licensed spectrum to work for consumers and urged the FCC and Congress to speed their efforts. She also gave a shout out to the unlicensed spectrum for Wi-Fi and to secondary market transaction that move spectrum directly and quickly from a company that isn’t using it aggressively to another that is eager to put it to work. Secondary market transactions are the essence of pro-consumer policy because they make it possible for consumers to enjoy the services they want most.
Kasoff goes on write that WIPP (which is one of our members) strongly agrees with spectrum policies that “involve competition, flexible use of licenses and presumption of renewal when something facilitates investments in networks, as well as secondary markets.” We also agree.
25%, which is the amount of American teenagers who now access the Internet on smartphones, according to new results from Pew. As Cecilia Kang of the Washington Postreports:
These young users between the ages of 12 and 17 stand out from adults. About 25 percent of teens use their cellphones to access the Internet, compared to 15 percent of adults.
Pew said this group of “cell-mostly” Internet users portend an explosion of mobile Internet use in the future.
“This is the first time we have measured the cell-mostly population among teens, and we expect this to be an important measure moving forward,” said Mary Madden, a researcher at Pew.
That bolded section from Kang’s article is key. Given that wireless providers are already flirting with capacity on their airwaves, it’s no wonder allocating more spectrum and the transition to all-IP networks are near the top of the FCC’s to-do list.
The city of Austin is some 1,500 miles away from Washington, D.C., but during my time at the South by Southwest tech conference over the weekend, I couldn’t help but see a strong connection between what was happening at the conference and what is currently being debated inside the Beltway.
SXSW is all about startups, gadgets, and apps, and this year’s conference was especially heavy on the hardware. From wearable computers and smart thermostats, to new game consoles and miniscule cameras, cool devices were everywhere. Exploring the conference, you can’t help but think over and over again that we live in truly amazing times. But as a tech policy wonk, I was constantly reminded there are crucial issues on the table in Washington that could have a dramatic effect on the gadgets of tomorrow.
One is the critical need for more spectrum for mobile broadband providers, a problem the FCC’s upcoming incentive auctions could go a long way toward solving — as long as they are open to all bidders.
The other is the coming transition to all-IP networks, and the regulatory hurdles that could slow the process down. Last week, FCC Commissioner Ajit Pai said he strongly supported pilot programs to explore sun-setting legacy copper network in favor of IP. Hopefully, his fellow Commissioners agree.
If SXSW attendees this past weekend thought about the networks that power all the cool devices on display, they were probably focused on signal strength or how fast a tweet made it off their smartphone. Mobile broadband has come so far so fast that it’s already close to an afterthought. But without ongoing investment and smart policies, all the innovation on display in Austin could be hampered by congested networks and red tape applied 1,500 miles away. SXSW is an event where cool ideas take off. Washington is a place where regulatory hurdles can easily ground ideas before they have a chance to leave the runway.
Reporting from this year’s SXSW Interactive in Austin, Texas, the New York Times’ Jenna Wortham writes about the heavy presence of hardware at this year’s festival:
The new emphasis on devices over software reflects a much larger shift in the start-up and tech world, driven by tools like crowdfunding and 3-D printing that make it cheaper, faster and easier to create prototypes. The trend is accelerating partly because of the popularity of and excitement around small companies making items like wearable fitness devices as well as smartwatches developed by Pebble and smart thermostats created by Nest.
And now the devices are taking over the halls and convention center of South by Southwest, which has historically been known as a launchpad for new software services; Twitter, Foursquare, GroupMe and Highlight all got their inaugural push on those convention center grounds.
Many of these devices on display are being powered by mobile broadband networks, which goes to show just how robust the current technological ecosystem is becoming. In other words, investment in more powerful networks is leading to more innovative and powerful hardware. Which is exactly how it’s supposed to work.
The folks at CTIA have put together a handy list of 50 wireless facts. Among them:
The wireless industry directly/indirectly employs more than 3.8 million Americans, which accounts for 2.6% of all U.S. employment. In addition, wireless employees are paid 65% higher than the national average for other workers.
Total private sector jobs fell by 5.3 million between April 2007 and June 2011, but the U.S. wireless industry added almost 1.6 million new jobs in the same time period.
As of December 2011, 34 percent of American households were wireless-only.
Despite having less than 5 percent of the world’s population and less than 6 percent of the world’s total wireless subscribers, the U.S. has more than half of global LTE subscribers.
In today’s Wall Street Journal, FCC Chairman Julius Genachowski goes over the many steps the Commission is taking to free up more spectrum from wireless use. Calling broadband the “engine for economic growth,” he starts out his op-ed by backing up that statement:
To sustain long-term economic health, America needs growth engines, areas of the economy that hold real promise of major expansion. Few sectors have more job-creating innovation potential than broadband, particularly mobile broadband.
Genachowski then highlights how the U.S. now leads the world in 4G LTE deployment (along with the fact that private investment in mobile infrastructure is “more than 50% higher than in Europe”), but warns that in order to keep both deployment and investment happening, more airwaves are critical. As he writes:
Spectrum is finite, and the demand for airwaves being created by data-hungry, Internet-connected devices is on pace to exceed supply. How significant is the spike in demand? Today’s smartphones generate 50 times more mobile traffic than a traditional cellphone. For tablets, it’s 120 times more traffic. As a result, American wireless networks are running at the highest utilization rate of any in the world.
One solution to this problem, Genachowski tells readers of the Journal, is the Commission’s upcoming spectrum incentive auctions, which have the potential to both free up airwaves and deliver much needed revenue to the Federal Government. That’s potentially a win-win, as they say. But as our own Rick Boucher wrote this past February, the key to making the FCC’s initiative successful for consumers and the economy is ensuring spectrum auctions are open to all bidders. Boucher:
History has shown that when the FCC has tried to pick winners and losers in the wireless market, American consumers have lost. Past attempts by the Commission to favor certain bidders and/or impose rigid regulations on auction winners have drastically diminished auction proceeds, left major blocks of spectrum unused, and led to what FCC Chairman Julius Genachowski himself has labeled “America’s looming spectrum crisis.”
The simple truth is America’s wireless industry continues to be fiercely competitive… Allowing the FCC to impose conditions on spectrum auctions will not make the industry more competitive. And the spectrum critically needed by all providers to keep up with increasing demand will not be put to its full use, leading to spectrum shortages, reduced investment and innovation, and higher prices for consumers.
Only through truly competitive, open spectrum auctions will America’s wireless industry continue to thrive. After all, the best way to ensure competition is to encourage everyone to compete.
Genachowski and the entire FCC deserve praise for their tireless work to keep this critically important issue on the front burner. But given mobile broadband’s benefits — not just to consumers and the economy, but to communities, education, and the health care industry — ensuring spectrum incentive auctions are open to all those willing to make the substantial private investment to keep rapid deployment going should be at the top of the list. As Genachowski himself wrote in his op-ed:
Private-sector innovation in mobile broadband has been extraordinary. But maintaining the creative momentum in wireless networks, devices and apps will need an equally innovative wireless policy, or jobs and growth will be left on the table.
And speaking of Apple, Peter Burrows and Olga Kharif of Bloomberg check in a long-rumored project for the company:
While Tim Cook has dropped hints that Apple Inc. (AAPL) is hard at work on a television to drive the next era of growth, the company’s wristwatch-style device, still in development, may prove more profitable.
The global watch industry will generate more than $60 billion in sales in 2013, said Citigroup Inc. analyst Oliver Chen. While that’s smaller than the pool of revenue that comes from TVs, gross margins on watches are about 60 percent, he said. That’s four times bigger than for televisions, according to Anand Srinivasan, a Bloomberg Industries analyst.
So far, the iWatch is nothing more than a rumor — but then, that’s not surprising from a secretive company like Apple.
Google Glass, the company’s innovative eyewear computer, is currently garnering a lot of attention. Christina Chaey of Fast Companylooks at a recent contest asking people for ideas the high-tech glasses could be used for:
A daily calorie tracker. A lifeline to a 911 operator. A real-time sign language translator. These are just a few of the thousands of entries submitted to Google’s If I Had Glass competition, which ended on Wednesday. The competition was an open call in search of early-access testers, or Glass Explorers, for the highly anticipated augmented reality headset the company says will be on sale by the end of 2013.
While Google Glass has many techies excited, Mark Hurst of Creative Good fires a warning flare about the device (italics his):
Yes, the glasses look dorky – Google will fix that. And sure, Glass forces users to be permanently plugged-in to Google’s digital world – that’s hardly a concern for the company or, for that matter, most users out there. No. The real issue raised by Google Glass, which will either cause the project to fail or create certain outcomes you may not want (which I’ll describe), has to do with the lifebits. Once again, it’s an issue of experience.
The Google Glass feature that (almost) no one is talking about is the experience – not of the user, but of everyone other than the user.
At the Wall Street Journal, Jessica E. Lessin and Specner E. Ante report on the still booming mobile app industry:
App stores run by Apple and Google Inc. now offer more than 700,000 apps each. With so many apps to choose from, consumers are estimated to spend on average about two hours a day with apps. Global revenue from app stores is expected to rise 62% this year to $25 billion, according to Gartner Inc.
Not bad for an industry that essentially didn’t exist just five years ago. Just goes to show the economic power of innovation — in this case, with both devices (smartphones, tablets) and the mobile broadband networks that power them.
Here’s something cool. Via Pete Kasperowicz of The Hill:
The House next week is expected to pass a resolution establishing a nationwide technology contest for students, which would initially encourage contestants to develop new “apps” for smartphones and tablets.
The resolution from Rep. Candice Miller (R-Mich.) is scheduled for consideration next week. It would create a contest run by the House of Representatives in which students from every congressional district would compete in the fields of science, technology, engineering and math, the so-called STEM fields.
At CNN Money, Kevin Kelleher writes about new numbers from Ericsson predicting major growth in wireless traffic:
Wireless data traffic will continue to grow 66% a year for the next five years. That means, by 2017, monthly mobile data traffic will reach 11.2 exabytes per month, or 13 times what it is right now. Other data points in the report underscore how big the mobile world has become and how quickly it will grow to be much, much bigger. Last year, some 4.3 billion people around the world had mobile devices, a population that will grow by close to a billion in five years.
Annual growth in data traffic will be significantly higher on smartphones (81%) and even higher on tablets (113%). However, smartphones will continue to be the biggest eaters of mobile-network data: In 2012, they made up 16% of devices connected to wireless networks and 44% of total traffic. In 2017, they will be 27% of connected devices and consume 68% of data.
Over 11 exabytes a month. To put that in perspective, it’s roughly the equivalent of 6 billion HD movies moving through the air each month.
A recent story in USA Today from Ron Barnett highlights some of the benefits students at a South Carolina high school are receiving from being connected:
Jennifer Southers has flipped education upside-down for her math students at Hillcrest High School.
Instead of coming to class and listening to a lecture, then going home and trying out what they learned on their own, they listen to a lecture on video before class and work on putting the new knowledge to practice in the classroom, where their teacher is there to help.
“The level of frustration has almost disappeared completely on those lessons when we do that,” she said of the “flipped classroom” concept that she and other teachers are using.
Unfortunately, as Barnett’s piece goes on to point out, America’s ongoing digital divide may be creating an uneven playing field when it comes to educating students:
[W]hat about students who don’t have broadband Internet access at home? How can they keep up with their peers in streaming instructional videos and doing online research?
More than two-thirds of low-income families in South Carolina don’t have a high-speed Internet connection, said Jessica Ditto, spokeswoman for Connected Nation, a nonprofit organization that works to increase broadband access in the nation. Overall, 57 percent of households in the state have broadband access, she said.
Increasingly, access to the Internet means access to improved education, which means students in the 43% of South Carolina households not connected with broadband are at risk of being left behind when it comes to innovative learning. But as Barnett reports, there’s hope on the horizon — for South Carolina and elsewhere:
Bill Brown, executive director of educational technology services for Greenville County Schools, says 4G LTE technology offers the most promise for bridging the digital divide.
With it, “You could blanket buildings, you could blanket cities” with high-speed Internet access, he said.
More powerful networks — beginning with 4G LTE (which, as anyone who has experienced it can attest, is remarkably fast) and continuing with the shift to all-IP based networks — will mean more access in more ways for more people. With the future of education tied to technology, encouraging investment in these networks should be an educational priority.
$1 billion, which is the amount Google pays Apple each year to be the default search engine in iPhones and iPads. Just goes to show how important mobility — and mobile broadband — now are. (Via Cult of Mac.)
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