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The most encouraging contradiction in telecommunications policy today is the gap between claims of a “looming spectrum crisis” for mobile carriers and the reality that consumers rely increasingly on a relatively small amount of unlicensed spectrum to satisfy their exploding demand for streaming video, music and other applications on mobile devices. Consumer demand for bandwidth-intensive apps is outstripping the capacity of mobile carrier spectrum and infrastructure.
Six short years ago, before the iPhone, virtually all mobile device traffic was routed over a carrier’s exclusively licensed spectrum and through cell towers and other carrier-provisioned infrastructure. Today, less than two-thirds of smartphone data traffic—and less than 10 percent of iPad data—are traversing carrier networks. The rest is transmitted a very short distance, at low power, over unlicensed spectrum, and into a wireline network that the end user (or an employer or a wireline ISP) has already provisioned. The share of mobile device traffic offloaded over unlicensed spectrum onto residential and business wireline networks is likely to surpass two-thirds over the next several years as the cable industry and many telcos continue to knit together millions of indoor and outdoor Wi-Fi access points.
This paper describes this trend, and argues that a balanced policy that prioritizes both more licensed and unlicensed spectrum will be needed to achieve a wireless future of pervasive connectivity at affordable prices. From a consumer perspective, the traditional distinction between wireline and wireless networks will increasingly blur. The devices may be mobile, but consumers are increasingly using data-intensive applications within Wi-Fi range of a wireline connection that is cheaper, faster and fairly soon will connect and hand off seamlessly as well. Because more than 80% of mobile device use is not truly mobile (in a car, on the go), but rather nomadic and often indoors (at home, at work, in a café or other public space), the vast majority of wireless data use can be offloaded over Wi-Fi or other very small cell technologies.
As fiber and other high-capacity wireline networks become more widely available, the ability of mobile devices to transmit data short distances over shared spectrum into less traffic-sensitive wired networks can replace the “spectrum crunch” with wireless bandwidth abundance. The key policy obstacle to this positive outcome is progress on the FCC’s effort to open the most underused bands of spectrum—particularly federal spectrum and portions of the mostly empty TV band—for unlicensed sharing.