Obama wireless expansion primarily a boon for urban iPhone and Blackberry users

Jon Ward Contributor
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President Obama’s announcement Monday that he will push to double the size of broadcasting spectrum for wireless devices is aimed, perhaps more than anything, at making it easier for iPhone or Blackberry users in major American cities to use their devices.

“It’s mainly a big city smart phone issue. But that’s where everything’s headed,” said Michael Calabrese, director of the wireless future program at the New America Foundation.

“Because of the iPhone, [telecom companies] have terrible congestion problems and consumer complaints in New York City, San Francisco and Washington, D.C., where they have a concentration of high-end users at peak times and they don’t have enough towers,” Calabrese said in an interview Monday.

“If, in five years, about 50 percent of wireless customers will be using a smart phone with capability similar or better than today’s iPhone, that will require a 16 times increase in capacity,” he said. “They don’t have enough spectrum or enough access points for that. So they need to increase both.”

Obama issued a memorandum Monday putting his full support behind a plan by the Federal Communications Commission to find excess bandwidth in the airwaves in both the private sector and in government.

His top economic adviser in the White House, Larry Summers, gave a speech extolling the new policy, which he said will be “fundamentally important for our competitiveness.”

“We live in a world where skilled workers are increasingly mobile, where ideas are readily transmitted across international boundaries, where capital is ever more mobile, where the ability of corporations to maintain their networks across international borders is continually enhanced,” Summers said.

“Digital infrastructure will be a key source of competitive advantage in the knowledge economy. There is no policy step more important for the digital infrastructure than assuring that scarce spectrum is efficiently allocated.”

The move will be seen as a positive by a business community that has begun to turn on the president. Verizon Chief Executive Ivan G. Seidenberg, who has been a strong ally of Obama’s for much of his presidency, last week lashed out at the Obama administration and Democratic Congress for creating an “increasingly hostile environment for investment and job creation.”

John Kneuer, who helped former President George W. Bush develop wireless broadband policies as head of the National Telecommunications and Information Administration, called Obama’s announcement a “hugely positive step.”

“We continue to be the global leader in all information and computer technology. But it’s a good thing we’re not being complacent,” Kneuer said. “I don’t think this is, ‘We’ve fallen behind and this is a new effort for us to catch up,’ or, ‘This is in response to growing competitive threats.’ This is just thoughtful, good government stuff to keep on doing the good stuff we’ve been doing.”

The plan to increase the wireless airwaves by 500 mhz over the next decade would roughly double the existing size of what wireless companies are now able to use. But despite the Obama administration’s frequent talk Monday of a potential “spectrum crunch,” Calabrese said that only in the most saturated markets are the big telecoms such as AT&T and Verizon anywhere near having to worry about hitting capacity.

He acknowledged that moving regional TV stations off of over 100 mhz of spectrum will open up prime airwave “real estate” — because it goes the furthest of any airwave frequency and also is best at penetrating through buildings — that will help telecoms expand high-speed internet access into rural areas. But the primary utility, he said, would be for users of smart phones as well as iPads and other wireless devices that are concentrated in major metropolitan cities.

“The use of wireless technology is growing at a very robust pace, with AT&T, in part due to its iPhone roll-out, reporting a 5,000 percent increase in wireless data traffic over the past three years — a compound annual growth rate of 268 percent,” the White House said in a fact sheet released to reporters.

Moving the TV broadcasters off their current positions remains a debated move. Summers and a top White House official who briefed reporters in a conference call both insisted that any moves will be optional and that broadcasters will have the option to stay.

But both Calabrese and Kneuer said that was only partially true, at best.

“In the end it cannot be completely voluntary,” Calabrese said. “Let’s say half the broadcasters agree to do it … The other half would have to be relocated anyway.”

Summers cast it as an opportunity for regional or local TV stations “with annual revenues measured in the hundreds of thousands of dollars” to sell their position for a portion of “a spectrum band valued in the hundreds of millions of dollars.” The station could then broadcast from a different frequency.

The federal government could reap as much as $60 billion, and possibly more, from the auction of broadband frequency channels, Calabrese said. Summers said that money would go back into helping the government invest in better technologies. He also floated the idea of putting the money toward deficit reduction.

Whatever excess bandwith the Obama administration cannot locate in the private sector it pledged to find in the government. The senior White House official said this included the Pentagon and the Department of Homeland Security.

Kneuer said that assessing what portions of broadband spectrum are needed by national security agencies, and which may not be, will be one of the most difficult and important tasks facing the FCC and the Chamber of Commerce, which are heading up the effort along with NTIA.

“You can’t take spectrum from them that’s going to compromise their mission,” Kneuer said. “That doesn’t mean they get a pass and nobody does any inquiries, but it means that the inquiries by definition have to be done by people inside the government who are cleared into those programs and can really test the assertions of need by those agencies and departments.”

The Obama administration will announce an inventory of how the federal government is using the wireless broadband spectrum by Oct. 1, and announce “a specific Plan and Timetable” for how it plans to reach the 500 mhz marker.

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