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FCC: Wireless Spectrum Shortage Coming

Mobile data traffic in the U.S. will be 35 times higher in 2014 than it was in 2009, leading to a massive wireless spectrum shortage if the government fails to make more available, the U.S. Federal Communications Commission said in a paper released Thursday.

While the paper may not get the projections exactly right, the U.S. government needs to act fast to free up more spectrum for mobile broadband, John Leibovitz, deputy chief of the FCC's Wireless Telecommunications Bureau, said during a spectrum summit at the FCC.

"From where we sit, the numbers that we're putting out are a matter of 'when' and not 'if,'" Leibovitz said. "The demand trends are so strong, the growth is so incredible, that just overrides most of the other considerations in the analysis in the near term."

The FCC and Congress need to move forward with plans to release more spectrum for mobile broadband, including incentives for television stations to give up their unused spectrum, added FCC Chairman Julius Genachowski. "The explosive growth in mobile communications is outpacing our ability to keep up," he said. "If we don't act to update our spectrum policies for the 21st century, we're going to run into a wall -- a spectrum crunch -- that will stifle American innovation and economic growth and cost us the opportunity to lead the world in mobile communications."

In a national broadband plan released in March, the FCC called for 300MHz of spectrum to be made available for mobile broadband uses in the next five years, and an additional 200MHz in the next five years. The 300MHz will be necessary if spectrum and device efficiency doubles in the next five years and the number of cell towers continues to grow at its current pace, Genachowski said.

Much of that spectrum would come from bands now controlled by the FCC or other government agencies, but 120MHz would come from spectrum now owned but unused by U.S. television stations. Under the broadband plan, the TV stations would give back unused spectrum in exchange for part of the profits when the spectrum is sold at auction.

The FCC would need congressional approval to move forward with these so-called incentive auctions, which Genachowski called "revolutionary."

"It's a win-win-win," he said of incentive auctions. "The country can benefit from freeing up spectrum for mobile use. Taxpayers can benefit from billions in auction revenue. And the current holders of spectrum -- including local television stations -- can receive a capital infusion and still be able distribute their programming by sharing with other stations, or through other platforms such as cable and satellite."

The National Association of Broadcasters was cool to the proposal that TV stations give up spectrum when the FCC released the national broadband plan. On Thursday, NAB executive vice president Dennis Wharton said the trade group looks forward to working with the FCC and Congress "to ensure that efficient spectrum deployment matches actual spectrum demand, and that America's leadership in providing the finest free and local broadcasting system in the world is not compromised."

The FCC paper released Thursday tracked mobile data use for subscribers in recent months. Between the first quarter of 2009 and the second quarter of 2010, data use per mobile line increased by 450 percent, the paper said. AT&T has reported that its mobile traffic has increased by 5,000 percent in the last three years, and users of Clearwire's 4G WiMax services consume 7 gigabytes of per month, about 280 times the amount of data used by a regular mobile phone, the FCC paper said.

About 42 percent of U.S. mobile customers now own a smartphone, up from 16 percent three years ago, the paper said. The FCC expects smartphone use -- and a corresponding increase in mobile data use -- to continue to skyrocket, Genachowski said.

"If we act thoughtfully and execute on a strategic vision to ensure the highest and best use of this precious national resource, we can drive billions of dollars in private investment, fueling world-leading innovations, creating millions of new jobs, and enabling endless new products and services that can help improve the lives of all Americans," he said. "If we don't, we will put our country's economic competitiveness at risk."

The FCC will consider three mobile spectrum items during its November meeting, including a proposed rulemaking to move forward on incentive auctions for TV spectrum if Congress approves them, Genachowski said.

Several groups praised the FCC for focusing on spectrum needs.

"The era of mobile broadband services offers tremendous opportunities for U.S. consumers and businesses," Steve Largent, president and CEO of mobile trade group CTIA, said in a statement. "At the same time, it presents an important challenge for policymakers, who must ensure there is sufficient spectrum to meet the rapidly growing demand and maintain our global leadership."

The FCC paper confirms predictions by CTIA, mobile providers and others, he added. "The increasing adoption of smart phones combined with American consumers' demand for mobile broadband service will require additional spectrum to meet these needs," Largent said.

Grant Gross covers technology and telecom policy in the U.S. government for The IDG News Service. Follow Grant on Twitter at GrantGross. Grant's e-mail address is grant_gross@idg.com.

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