Spectrum crunch likely to be worse than expected

There’ll be a further, massive shortage of spectrum in coming years if more isn’t made available, the FCC has warned.

In a paper released yesterday, it said it expects there to be 35 times as much mobile data traffic in 2014 than there was in 2009 – and that this may well be an underestimate, given the iPad boom.

“The explosive growth in mobile communications is outpacing our ability to keep up,” said FCC chairman Julius Genachowski. “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.”

According to the report, even if spectrum and device efficiency doubles and the number of cell towers continues to grow at its current pace, the US will need around 300 additional megahertz of spectrum by 2014.

The FCC estimates the economic value of this spectrum as $120 billion.

“The mobile revolution has spawned the ‘apps economy’, with tens of thousands of developers and companies, including many startups creating new jobs, inventing more than 250,000 apps, driving four billion dollars in sales last year alone,” said Genachowski.

“And consider the potential for ecommerce. EBay’s iPhone app has been downloaded 12 million times, and eBay sales on smartphones are expected to top $1.5 billion this year.”

Genachowski said that the FCC was making progress with its plans to encourage broadcasters to give up spectrum in exchange for rewards – although he didn’t say how many, if any, had signed up.

The CTIA Wireless Association said it welcomed the report.

“The era of mobile broadband services offers tremendous opportunities for U.S. consumers and businesses. 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,” said CEO Steve Largent.

“A careful analysis of government spectrum use is key to ensuring the President’s and the FCC’s goal of bringing 500MHz of spectrum, sufficient for mobile broadband, to market.”

The FCC recently released the first block of spectrum to be sold off in 20 years.