A proposal for delivering affordable, broadband mobile-Internet access to all Americans
America is currently in imminent danger of losing its leadership position in telecommunications. At the same time, businesses in industries and countries around the globe face a new productivity constraint—the rapidly growing demand for low cost mobile bandwidth. There is no viable long-range plan that will support this demand. The Presidential Prize will solve these challenges at minimal public cost and risk. The prize will be a segment of radio-frequency spectrum awarded to a U.S. entity that creates and implements a technology capable of achieving 100 times higher spectral efficiency than exist today at half today’s cost for consumers.
Congress and the Executive Branch control and manage the radio-frequency spectrum in the United States. But that spectrum belongs to the country’s citizens. Only visionary leadership, of the kind that put a man on the moon can bring the United States—and the world—into the new era of productivity that low-cost and widely available mobile access promises. Consider just a few facts:
Mobile traffic is growing rapidly: As Cisco recently reported, global mobile-data traffic grew 70% in 2012 to 885 monthly petabytes. This year, meanwhile, the world will grow to have more mobile, Internet-connected devices than people. Further, Cisco predicts, global mobile data traffic will increase 13-fold between 2012 and 2017, growing at a compound annual growth rate of 66% and reaching 11.2 monthly exabytes of traffic by 2017.
Mobile access is too expensive: At the same time that demand necessitates a more efficient use of existing radio spectrum for mobile Internet access, access to mobile data is far too expensive. A 2012 survey indicates that nearly half of U.S. wireless consumers pay $100 or more monthly for mobile service, while 21% pay more for their monthly mobile service than for their groceries. Is it any wonder that only about a third of the world’s population has access to the Internet—mobile or otherwise?
The potential benefits of mobile access are enormous: The potential impact of sufficient and affordable mobile access to the Internet on healthcare, education, employment rates and national productivity cannot be overestimated. But congressional and FCC policies and regulations that have served the nation so well in other matters are not likely to crack the code on making the vital national resource of radio-frequency spectrum widely available. The well-meaning administration initiative to redistribute spectrum currently allocated to government use may, over an extended period, result in a roughly 20% increase in bandwidth available for public data communications. This will hardly suffice for the 13-fold increase in demand expected in fewer than five years.
U.S. Influence is diminishing: At the same time, nearly all manufacturing of mobile-telecommunications equipment has moved offshore. There are no major infrastructure companies remaining in the U.S. Most mobile phones are built in China and Taiwan while China’s Huawei is the world’s fastest growing telecommunications-infrastructure company. Sweden’s Ericsson, France’s Alcatel/Lucent, Finland’s Nokia and Huawei, build almost all mobile infrastructure equipment. Although Google, Apple, U.S. carriers and others are important members of standards bodies, their influence is far reduced from historical levels.
The Presidential Prize
At no cost to U.S. taxpayers, the Presidential Spectrum Prize is meant to boost competition, alleviate unemployment, reinvigorate U.S. telecommunications and drive the creation and adoption of inexpensive and spectrally efficient technology for a vast majority of the American public.
To win the competition, the entrant must demonstrate a hundred-times improvement in spectral efficiency and a per-bit price at least half that of existing offerings. A maximum of two such awards will be made. The process of selecting the winner(s) will involve four phases, as follows:
Phase one – The publication of technical papers revealing the theoretical proof of the proposed technology, showing how both the technical and economic objectives will be met. Estimated cost per entrant: $200,000 to $1M. Phase two – Laboratory demonstrations and measurements showing that the proposed solution can meet the Prize’s objectives. Estimated cost per entrant: $2M to $10M. Phase three – A small-scale test bed comprising at least 30 sectors or cells in an urban or urban-like area with sufficient user devices to demonstrate feasibility. Estimated cost per system: $10M to $30M. Phase four – Full city deployment in a medium-sized urban area, probably by one or two remaining participants. Estimated cost for initial deployment: $50M to $250M.
Total estimated cost for nationwide deployment: $20B+.
With Congressional approval, the FCC will make one or two awards to the competition winner(s) of a nationwide license for approximately 20 MHz of bandwidth of radio-frequency spectrum. While this appears too small to be commercially viable, the awardee’s technology will expand its capacity to equal many times the entire existing cellular spectrum.
Contestants will bear all research-and-development costs. Volunteer judges will be objective and skilled engineers and economists drawn from the National Academies and academia. Foundations and other non-associated sources will supply funds necessary to cover administrative and technical costs.
This proposal is presented in outline form. While the dollar amounts are estimates, the objective of 100-times efficiency is absolute and must not be compromised. Unlike the unsuccessful and so-called pioneer’s preference awards of the past, the actual award of spectrum will occur only after proof-of-concept, and substantial investment, by the winner(s).
The most important benefit of wireless communication is improving productivity; increasing the wealth that makes people live better and function better. This has been proven repeatedly since the Handy Talkie in World War II enabled soldiers on the battlefield to work as teams. We have reached the point where many businesses cannot function profitably without some form of wireless communications.
But the most vivid example of wireless productivity improvement is in the poorest places in the world where poor farmers use the village cell phone to optimize the price they can get for their crops. Voice communication is available at reasonable prices in most places. This is not true of wireless data. Access to wireless data is beyond the reach of most people in the world because of its high price.
This is simply wrong! Technology has allowed us to reduce the price of wireless by a factor of two every 3 1/2 years for over 110 years. And yet, it appears that the price of wireless data is actually increasing.
The overt reason given for high data prices is the shortage of spectrum. We’ve never had a scarcity of spectrum in the past because technology has always kept up with the increasing needs and most often has stayed ahead of these needs. Have we exhausted the ability of technology to continue multiplying the available throughput of existing spectrum and thereby reducing prices? Not by a long shot. So what’s the problem?
The easiest way for wireless carriers to increase their capacity is to acquire more spectrum. Of course, we know that there isn’t any more spectrum so the only way to acquire more is to take it away from someone else. The office of the President has directed the Department of Commerce to redistribute 500 MHz of radio frequency spectrum from existing services, ostensibly to resolve” shortages” in other services. This is a well-intentioned effort but, in the long run, almost irrelevant.
There have been numerous predictions of what the future needs for data throughput will be. Cisco has predicted that, within the next five years, we will need 20 to 40 times more throughput than exist today. It’s difficult to understand how an incremental increase of 10% or 20% or even 30% will do anything to fulfill a need of 20 to 40 times.
The only solution to the challenge of making wireless data available to the people who need it most is the adoption of spectrally efficient technology. That technology exists, has been proven, and actually makes our systems more cost-effective. I will discuss these technological options in future blogs.