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Jonathan Spalter

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The Competitive Edge of U.S. Wireless

Posted: 06/17/2013 10:53 am

This week, Tom Wheeler, President Obama's well-qualified nominee to Chair of the Federal Communications Commission, will have his confirmation hearing, and at last have his day before the United States Senate where he will have the chance to offer his vision for the American wireless marketplace.

In preparing for this important forum, he would do well to read the transcript of the incisive discussion that was held recently at Washington DC's Brookings Institution, "Accelerating the Mobile Technology Revolution." The need for the U.S. government to make more spectrum capacity to expand the mobile Internet was center stage. But so was the key to U.S. mobile innovation leadership to date. "This is a hypercompetitive industry," said Sen. Mark Pryor (D-AR), Chairman of the Senate Subcommittee on Communications, Technology and the Internet, adding that competition has "led to a ton of innovation, tons of investment...it's one of the greatest success stories in the U.S. economy in the last 25 years."

It's an essential point to any modern mobile policy debate, and one that was heavily reinforced by the Federal Communications Commission's (FCC) 16th Annual Mobile Competition Report. Released in March, the report details the many different yardsticks of competition in the U.S. wireless sector. Mobile Future's latest infographic, "The United States of Wireless," seeks to capture the FCC's own data to illustrate the relentless competition that, among its many benefits, has propelled the U.S. to the head of the global back when it comes to state-of-the-art mobile infrastructure.

The Commission is beginning its work on next year's Competition Report, and the trend lines showing the continuing pace of dynamic and resilient competition in the American wireless marketplace are abundantly clear.

With more mobile devices in the U.S. than people, exploding consumer demand for mobile broadband is driving intensive wireless competition. Sixty seven percent of new phones purchased in 2012 were smartphones. As we declare ourselves "Team Apple," "Team Samsung" and the rest, consumers have plenty of choices for their devices. According to the FCC, 23 manufacturers offer 266 wireless handsets in the U.S. market. That's more than three times the number of devices for sale just two years ago.

Consumers are further empowered by their service choices. According to the FCC, nine out of 10 Americans can choose from at least three providers--and a wide variety of plans. And, no less than 16 wireless service providers will have deployed next-generation 4G LTE networks by the end of this year.

Competition keeps everyone on their toes--and that's a powerful thing for consumers.
With more and more capable devices and networks, Americans are taking advantage of ever more sophisticated and data-intensive applications. In fact, mobile data usage leaped 250% year-over-year from 2010 to 2011. And, all forecasts point to a continued steep upward trend line.

This, of course, has given rise to a whole new segment of the wireless sector. The FCC notes that 25 billion mobile apps were downloaded in 2012, fueling innovation across virtually every sector of our economy--from learning another language, to managing a chronic illness, to calling a taxi or collaborating with work colleagues. And, the rise of a virtual "apps economy" has led to the creation of 500,000 very real American jobs.

We need to keep up the progress.

And Mr. Wheeler, should he be confirmed, has three clear, achievable, and common-sense near-term opportunities to do so:

First, within two years, the wireless web will be Americans' primary means of accessing the Internet. The intensive competition that sparked $30 billion in network investment last year among competing wireless providers must continue unabated. This means without the imposition of artificial constraints. Central to this effort will be for Mr. Wheeler to lead the FCC to take timely and inclusive action to make more spectrum available to power our nation's mobile networks and ensure they can keep pace with consumers and our increasingly mobile-centric economy.

Second, he can make clear the importance of setting a clear and common definition of success in the upcoming spectrum auctions. In doing so, he need look no further than Congress' original intent, as defined in its legislation authorizing the auctions. It cites the importance of wireless connectivity for all Americans and the equally vital and ambitious goal of raising $7 billion for the U.S. Treasury to finance the creation of a national first responders' network--an essential national tool that was first called for more than 10 years ago by the 9/11 Commission. To meet this critical goal, these auctions must be designed as simply as possible and allow all to participate. Ultimately, Mr. Wheeler must ensure that when it comes to the design of these auctions, and to all other Agency policymaking as well - it must be American consumers who should pick winners and losers in our turbo-charged wireless marketplace - not the federal government, nor the FCC.

Quite simply, our government should not be in the business of designing public auctions in ways that would favor one or another competitor. And in this, Mr. Wheeler has a powerful opportunity to signal to American consumers, and our country's innovators, that for its part, the FCC will not do so.

Third, as the Commission begins its important work of preparing for Congress its next Competition Report, Mr. Wheeler should insist - confidently - that in the face of its own overwhelming data, it is would be unfathomable that the FCC could come to any conclusion other than the U.S. wireless market is unequivocally competitive. Disappointingly, in its three most recent reports, the Commission has allowed its own data regarding this conclusion to hide in plain sight. This omission of the obvious has served neither the cause of American wireless innovation, nor the interests of the public.

There is a huge opportunity therefore for Mr. Wheeler - should he be confirmed by Congress - to truly "walk the talk" about the Agency's commitment to data-driven analysis and acknowledge in plain English what its own data have concluded - and what American consumers know full well - that the wireless marketplace in the United States is thriving, competitive, and dynamic.

These are big, broadly appealing and public-spirited goal posts. They reflect a clear and emerging consensus that I hear in the ongoing spectrum debates: consumer-driven competition over regulation, market-driven auctions that get the most spectrum to the largest number of consumers, and making good on a 10-year-old promise to our first responders--and all Americans.

With this timely progress, the next 25 years of wireless can easily be even more promising than the last--creating jobs, fueling economic growth and delivering profound new innovations. But it requires Washington to unite behind a common vision--and act.

The time has come for our nation's leaders to roll up their sleeves and help make, rather than break, the mobile future.

Jonathan Spalter, chairman of Mobile Future (www.mobilefuture.org), has been founding CEO of leading technology, media, and research companies, including Public Insight, Snocap, and Atmedica Worldwide. He served in the Clinton Administration as a Director on the National Security Council.

 

Follow Jonathan Spalter on Twitter: www.twitter.com/mobilefuture

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