Report

Jordan McNeal

Alisha Geary

English 2010

8 July 2012

Spectrum Crunch

Government Intervention

Abstract

              The spectrum crunch is increasingly becoming more and more of a problem for cities in the United States. The country is quickly running out of useable air space in the electromagnetic spectrum, which could harm the mobile, TV broadcast, and radio industries as well as hurt the economy and put a hold on furthering the development of the internet. This report will report on how the government is trying to slow down the spectrum crunch by forcing companies to change their technology or to auction off useable space.

Our Problem

From the cell phone to the TV to the radio, almost everyone in the United States has  multiple devices that use bandwidth to communicate wirelessly with other devices. If someone wanted to drive to work while listening to the  radio without a wire leading from their car to the provider, then the  radio needs to communicate wirelessly with the radio provider. This form of communication is done through set waves in the electromagnetic spectrum.

So, why is this a problem? If technology is already capable of communicating together wirelessly, why do we need to worry about how technology is communicating with each other? Most mobile technology is communicating through electromagnetic waves, and there is only so much spectrum that can be used safely. All forms of light waves are a form of radiation, some are far safer than others, but we certainly can’t start using gamma waves to connect our cellphones.

Ever since the creation of the TV and radio, the United States has been slowly moving towards the limit of how much spectrum they could use, albeit unknowingly. But ever since the explosion of smartphones, many cities in the United States have begun moving much more rapidly.

The Growth Problem

Since Apple’s iPhone, the smartphone market has exploded. At&t, who were the original carriers of the iPhone, have said that since the year 2007 their network traffic has increased by 20,000% (Donovan). The more network traffic a mobile company has, the more spectrum space they need.

Figure 1 shows that if mobile companies continue to have the same rate of network traffic as they have had in the past couple of years, the Federal Communications Commission (FCC) predicts that the United States

major cities will run out of available spectrum by the year 2014. Because the electromagnetic spectrum can’t be sub-divided infinitely, the FCC will need to start finding available spectrum space for companies to use.

Figure 1

Government VS Analog TV

              The spectrum crunch threatens a downturn in the United States economy and stagnation in the technology industry, especially the cellular industry. The government clearly does not want either to happen. But there is only so much the government can do. So far the government can only treat the problem and not cure it. The easiest way has been to clear up old space and allow others to use it.

One of the biggest holders of the spectrum that is not being reserved for important uses, such as fire fighters, police, airplane navigation, etc., is the TV broadcast chunk. As shown in figure 2, analog TV broadcast takes up more space in the spectrum than multicast digital does. With a multicast digital signal, a TV broadcast company could send out more signals than with analog this made it a very easy target (Churchill).

In 1996, congress allowed each TV broadcast station more spectrum space to make a second multicast digital channel. This way the TV stations could still produce a product to all of their analog customers, while preparing themselves to transition to digital. Congress later set June 12, 2009 as the cutoff date for full power TV stations to stop broadcasting analog. This cleared up a substantial amount of airspace; unfortunately much of it was already needed by public services for fire fighters, police, etc. (Churchill).

Figure 2

Spectrum Auctions

In February of 2012, President Obama signed the Payroll Tax Bill. The bill will allow the FCC to auction off some of the remaining white spaces in the spectrum to companies that need more spectrum. $22 billion worth of  spectrum space was given to the FCC to use for auction. $7 billion of proceeds were to go to funding the FCC, while the rest would go to tax cuts and unemployment benefits (Meckler).

Along with the white space provided by the bill, the FCC has proposed for the government to hand over a hefty chunk of the TV broadcast spectrum. The FCC grab would take out 682 spectrum channels, which could eliminate 19 DTV channels. This has been nothing new for TV broadcast stations. Over the past couple decades,  TV broadcast stations have been losing more and more spectrum space when needed. Figure 3 shows just how much TV broadcasting stations have lost since 1983. Ever since 1983, mobile companies have taken 75% of  TV broadcasting’s space (Churchill).

Until the “FCC grab” is permitted by the government, the FCC will be leading “incentive auctions”. Current spectrum licensees can contribute spectrum to the FCC to be auctioned off to the highest bidder. It’s a win-win situation where the FCC can redistribute existing spectrum to a company more in need of spectrum space and the licensee can get some of the proceeds of a currently very valuable resource (“Incentive Auctions”).

Figure 3

Can the government solve this?

One has to wonder if the government and FCC are picking “favorites” with who gets to keep their share of the spectrum, and who doesn’t. So far it seems that DTV channels that have full HD news (Fox, CBS, NBC, etc.) take precedence over channels that are more strictly bound to infomercials; and this makes sense considering how many more jobs are constituted to the news channels than the infomercial channels.

The incentive auctions being held by the FCC could even be seen as a scare tactic. If the company doesn’t auction off its license, the FCC may just take it away with its “FCC grab” later on. Whether the government permits the FCC grab or not, it’s better to auction off the license now and make a profit than wait and have it taken away.

Unfortunately, there doesn’t seem to be much that the government, or even the FCC, has planned to solve the spectrum crunch. At this point it seems like all they can do is reallocate already existing spectrum at the cost of the organization previously holding the reallocated share of the spectrum.

It may be more profitable for both sides if the government were to just buy back all of the spectrum licenses. The government could then rent out space to the companies that need it by year, half decade, or decade; adjusting how much spectrum we need for whatever industry at any given time without the need for the government to pull any license away from the smaller companies that had previously paid a lot of money for it.

Works Cited:

2008. Graphic. HowStuffWorksWeb. 24 Jun 2012.

Alderfer, Rob. United States of America. “Crunching theNumbers Behind the Spectrum Crunch”. Federal Communications Commission. 2010. Web. 24 June 2012.

Churchill, Sam. “FCC Gets Unlicensed White Spaces in Payroll Tax Bill.”dailywireless.org. N.p., 17 Feb 2012. Web. 22 Jun 2012.

Donovan, John. “Wireless Data Volume on Our Network Continues to Double Annually.”attinnovationspace.com. AT&T, 04 Feb 2012. Web. 22 Jun 2012.

Meckler, Laura. “Obama Quietly Signs Payroll Tax Bill.” The Wall Street Journal. The Wall Street Journal, 22 Feb 2012. Web. 22 Jun. 2012.

Nordahl, Tore. “COUNTDOWN TO NAB 2011 — Issue 4.”usjvc.com. JVC, 04 Apr 2011. Web. 24 Jun 2012.

The Shrinking of TV Broadcasting OTA Spectrum. N.d. Graphic. 24 Jun 2012.

United States of America. Federal Communications Commission. Web.

United States of America. Federal Communications Commission. Incentive Auctions. 2012. Web.

“Wireless Data Growth Leads to Spectrum Deficit”. Federal Communications Commission. 2012. Chart. Web. 24 Jun 2012.

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