Don't Neglect `Invisible Infrastructure'
In his early days in office, true to his campaign promises, President Donald Trump is promoting a $1 trillion plan to upgrade the nation's aging physical infrastructure. To maximize job creation, investment and benefits to all Americans, he should also focus on our "invisible infrastructure" -- the unseen airwaves that enable wireless connections.
Mobile communication has been a powerful platform for innovation and economic growth. The mobile apps economy now contributes $36 billion annually to U.S. gross domestic product and has created some 750,000 new jobs. The McKinsey Global Institute estimates that the Internet of Things, which uses wireless communication and cloud computing to essentially digitize the physical world, will create more than $4 trillion in economic benefits by 2025. Wi-Fi allows entrepreneurs to start businesses in coffee shops; mobile helps companies operate more efficiently, expand their businesses and hire new employees; and wireless connectivity will help improve and expand access to health care and education.
But that's only if we pay attention to invisible infrastructure. The foundation of the mobile economy is electromagnetic spectrum -- the radio frequencies used to transmit bits of information to and from mobile devices. As data-hungry, internet-connected gadgets have proliferated, demand for spectrum has risen dramatically: Wireless data transmission has increased 35-fold since 2009. With more than 200 billion devices expected to come online by 2020, demand for bandwidth will only grow.
Meeting this demand requires overcoming two challenges. One, spectrum is finite. And, two, a significant amount of spectrum is still allocated for the uses of the past, not the needs of the future.
These challenges don't solve themselves. And as a former FCC chairman, I learned that progress demands focus, leadership, and a willingness to work with the best and brightest -- inside and outside government -- to develop new ideas and guide them into law and policy. Ajit Pai, the new FCC chairman, has the experience and capability to develop new policies to unleash spectrum; the challenge will be to resist distraction and make it a high priority.
As a start, here are some ideas the new administration should pursue as part of an Invisible Infrastructure Initiative.
First, expand the spectrum pipeline. In 2010, President Obama set a goal (at the time thought unrealistic) of freeing up 500 megahertz of spectrum for broadband by 2020, backing a recommendation from the FCC. Thanks to initiatives including the commission's pioneering incentive auction, which reallocates high-quality licensed spectrum from television broadcasters to wireless companies, we'll soon be more than halfway there. The new FCC should accelerate efforts to free more spectrum until that goal is met, and the president, Congress and the commission should set a bold target for 2030 that includes high-band spectrum for ultrafast 5G services.
Next, focus on government spectrum. The federal government has far more than it needs: According to industry and FCC studies, it still has sole or primary use of almost 70 percent of spectrum best suited for broadband technologies. Of course, the government needs spectrum for military and civilian uses, but the allocations are decades old and inefficient -- with twice as much reserved for certain satellite uses as is needed, for example. Allocating more government spectrum for commercial use should be a priority. Sharing more of it -- for instance, letting the military open some of its allocation for civilian purposes -- could help advance the federal mission with reduced costs and better technology.
Opening up more unlicensed spectrum should also be high on the agenda. Unlike licensed spectrum, which is auctioned for exclusive commercial use, unlicensed spectrum is available without cost to anyone, so long as basic rules are followed to prevent interference. It has served as a forum for permissionless market innovation, enabling the development of powerful technologies such as Wi-Fi and Bluetooth. Yet as FCC chairman, I was surprised to see opposition among Republicans to freeing up new unlicensed spectrum. Unlicensed versus licensed spectrum is a false choice. We need both.
Finally, the new administration should focus on removing barriers to expanding broadband. Meeting the needs of the Internet of Things and 5G will require denser networks with more antennas. Yet local authorities frequently delay approval, often in an effort to extract unfair payments. In 2009, the FCC adopted a 90-day "shot clock" to speed these decisions. The new president and Congress should expand the FCC's ability to preempt unreasonable state and local restrictions. They should also expand "dig once" policies, which mandate that federal road construction projects include conduits for broadband. Requiring recipients of government funding to provide access to rights of way and utility poles at reasonable rates would also lower the cost of broadband construction and benefit consumers.
Wireless networks are a strategic asset for the U.S. We fell behind Europe during the 3G era, regained our leadership in 4G and now need to sustain and extend it for 5G, the Internet of Things and wireless breakthroughs we can't yet imagine. It's vital to build on the steps taken in recent years to free up more spectrum and expand our wireless networks. These issues are not without controversy or difficulty, and require tough choices. But it would be a big mistake to address physical infrastructure without also improving our invisible infrastructure.
This column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.
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