Like Deck Chairs on the Titanic: Why Spectrum Reallocation Won’t Avert the Coming Data Crunch but Technology Might Keep the Wireless Industry Afloat

Abstract:     
Skyrocketing mobile data demands caused by increasing adoption of smartphones, tablet computers, and broadband-equipped laptops will soon swamp the capacity of our nation’s wireless networks, a fact that promises to stagnate a $1 trillion slice on the nation’s economy. Among scholars and policymakers studying this looming “spectrum crisis,” consensus is developing that regulators must swiftly reclaim spectrum licensed to other industries and reallocate those rights to wireless providers. In this interdisciplinary piece, we explain in succinct terms why this consensus is wrong. With data demands increasing at an exponential rate, spectrum reallocation plans that promise only linear growth are destined to fail. What regulators should focus on, instead, are policies that encourage the sluggish incumbents presently dominating the wireless industry to roll out new networking technologies (like tiered network architectures, cognitive radio, and multicell MIMO) that could allow exponential increases in spectral efficiency.

Number of Pages in PDF File: 15

Keywords: telecommunications, spectrum crunch, spectrum crisis, spectrum famine, spectrum policy, National Broadband Plan, AT&T, Verizon

JEL Classification: K23, L13, L96

Accepted Paper Series