Demand for data services over wireless is no surprise. Mobile carriers in Europe knew the future was bright over a five years ago when they started tracking statistics showing mobile users texting 1 billion messages a month. Would this pattern duplicate itself in the U.S.? Initially, nobody believed it would. The growth was manageable between 2005 and 2009, and moderate compared to Europe. Along came RIM with its BlackBerry designed for corporate users needing mobile access to email and usage took off. But would it spill over to the consumer space? Many simply did not think it would; it would be too expensive and besides, who needed to be in touch that urgently, at an extra monthly surcharge to your mobile phone bill? Most analysts believed the fight would be over corporate data contracts.
But spill over it did; consumers took to wireless smart phones quickly, particularly the younger generation. Vendors like Apple, HTC, and Google didn't hesitate after seeing the success RIM had, which fueled more consumer demand. Like Europe, America's I-Generation loves to text and connect to their social media favorites, especially on their smart phones.
Every carrier in the U.S. had various growth forecasts based on traditional marketing models in various regions. A lot initially was dependent on application ecosystems expanding beyond just a few manufacturers. Wireless carriers and next generation smart phones such as Apple's IPhone and Google's Nexus are leading the charge with explosive growth in wireless data usage. FCC Chairman, Julius Genachowski presented the challenges that lay ahead during a speech for the New America Foundation in Washington D.C.
Genachowski warned that unless changes are implemented at the FCC, the U.S. will fall behind in wireless access services like it has in other broadband areas.
AT&T reports that its mobile data traffic is up 5,000% over the past three years. That's not surprising when you consider that a typical smartphone generates 30 times the traffic of a traditional data-enabled phone-and a netbook generates 450 times more traffic.
According to Cisco, North American wireless networks carried 17 petabytes per month in 2009. By 2014, they are projected to carry 740 petabytes per month.
Now even if you think a petabyte is something that sends you to the emergency room, you know that that's a game-changing trajectory.
There is spectrum coming to market. Counting 2008's 700 MHz auction, the FCC in recent years has authorized a 3-fold increase in commercial spectrum for mobile broadband. But that increase will not allow us to keep pace with an estimated 30-fold increase in traffic. While the spectrum crunch is a serious obstacle threatening the growth of mobile broadband, it is not the only one.
Verizon, Sprint, AT&T are spending billions of dollars in 3G, 4G technology upgrades and in network coverage. What has surprised them all is how quickly these upgrades have been needed. All the major carriers know that if they don't revise their infrastructure quickly, the competition will. I regularly see the applications the FCC receives for wireless construction;ere are hundreds of applications per month. (You can retrieve them via RSS at FCC.gov.)
Wireless providers also face red tape and needless barriers, which slow deployment and increase the costs of investment. The costs of obtaining permits and leasing pole attachments and rights of way can amount to 20 percent of fiber deployment, which is necessary for wireless networks as well as wired networks.
Genachowski admits that the FCC can appear to be moving very slow and at times, be awkward to deal with. He's promising change. The costs he describes above are conservative. It can be as high as 40 percent.
With our tower-siting shot-clock order in November, the Commission has already begun taking action to cut red tape, lower the costs of investment, and accelerate network deployments - but more needs to be done.
Genachowski discussed how applications and services have fueled wireless growth;
No area of the broadband ecosystem holds more promise for transformational innovation than mobile. Breakthrough new devices that put the power of a "PC-in-your-pocket," combined with billions in network investments have liberated broadband from the desktop and made it possible to imagine a world where the Internet is available to anyone, anywhere, anytime.
The idea of a a PC in your pocket is an interesting one. Netbooks and Tablet readers might be a good fit for the sustained used of the broadband world that isn't licensed. One of the many questions that remains unanswered is if the FCC will assign more 'free / unlicensed" spectrum for high speed local wireless.
In addition, our National Broadband Plan will encourage innovative ways of using of spectrum, including what some call "opportunistic" uses, to encourage the development of new technologies and new spectrum policy models.
Unlicensed spectrum, for example, has been a proven testbed for emerging competition, injecting new investment and innovation into the marketplace, and spawning new services and devices from Bluetooth to WiFi technology. The market for WiFi network equipment alone is about $4 billion a year, and analysts project the market for WiFi-enabled health products will reach $5 billion by 2014. This is what people used to call the "junk band" until the FCC released it for unlicensed use and innovators got to work.
The junk band is no more.... Just ask Kindle and Apple; to them it is priceless.