By Justin Leventhal, American Consumer Institute
Wireless data has been getting cheaper every year, but the recent lapse of FCC’s spectrum auction authority may slow this price drop in the long term. Applications and streaming services are using more data than ever, and consumers continue to switch to faster wireless services like 5G. This increases demand for a limited part of the wireless spectrum. Without making more wireless spectrum available for private use, demand for data will eventually put an upward pressure on data prices, costing consumers more for wireless services.
The price of data has fallen dramatically over time. In 2018 one gigabyte of data cost $4.64. As of 2023, that number has fallen by nearly 41 percent to only $2.75. As the price of data continues to fall consumers are likely to use even more. Meanwhile, data requirements for higher quality services will continue to grow as well, requiring the U.S. wireless system to carry an ever-increasing amount of data for the foreseeable future.
Unfortunately, only a limited portion of new bandwidth is expected to be licensed for dedicated commercial use over the next five years. According to a report by the CTIA, the U.S. is far behind much of the rest of the world in licensed mid-band wavelengths with only 270 Megahertz (MHz) allocated. Japan has licensed 1.1 Gigahertz (GHz) of its mid-band and the UK set aside 790 MHz. Over the next five years, the U.S. plans to expand to 450 MHz, still well behind Japan and the UK, even further behind the 1.6 GHz China is expected to expand to over the next five years to meet growing demand. The small increases the U.S. is planning are likely to be insufficient in the long-term as demand for data rises..
There has been talk recently about making more radio frequencies available for wireless use including 42 to 42.5 GHz in the high-band spectrum and 3.1 to 3.45 GHz in the mid-band spectrum. With a growing number of 5G connected consumers and more demand for data, allowing the FCC to auction off more portions of the wireless spectrum makes sense. Japan even opened another section of mid-band from 4.5 GHz to 5.0 GHz for both exclusive licenses and unlicensed use.
Unfortunately, in the U.S. the rights to portions of the wireless spectrum can’t currently be auctioned off because Congress allowed the auctioning authority of the FCC to expire, a decision the FCC itself disagrees with.
Mid-band and high-band spectrum are the most important ranges of wireless communication for transmitting large quantities of data. Mid-band wireless signals can carry a lot of data over long distances, making it the backbone of modern and future wireless data. The mid-band range of the wireless spectrum, from 1 GHz to 6 GHz, is particularly desirable for cellular companies because of both its stability and the range of broadcast. This is what makes this range the “goldilocks” of bandwidths. The high-band range is capable of handling more data, but at shorter ranges, making it a useful tool for supplementing wireless services in cities and densely populated areas.
Much of the mid-band wireless spectrum is currently unallocated and could supply the needed bandwidth to keep data speeds high and data costs low as demand for bandwidth continues to grow. With more people constantly switching to 5G a larger portion of the mid-band spectrum will be needed to serve new customers and provide increased data for existing consumers.
For the open 42 GHz high-band spectrum the FCC has suggested three potential non-exclusive approaches to licensing it, given that it cannot auction the range off for exclusive use. Non-exclusive bandwidths like the Citizens Broadband Radio Service (CBRS) have a variety of beneficial uses, such as for universities and other organizations that don’t require intensive spectrum use, but non-exclusive use does not address consumers’ future data needs for current or next generation wireless services.
The CBRS system is unique to the U.S., with no other country using mid-band sharing in this way. It originally came about due to concerns that the U.S. Navy and satellite ground services were already using the frequencies in the CBRS system, and that data had to be prioritized for certain users of the wavelengths that overlapped these channels. While this is important for opening parts of the spectrum currently being used, that concern does not exist for the 42 to 42.5 MHz range. This leaves the FCC an opportunity to open this band for licensed commercial use to supplement mid-band wireless services in densely populated areas where bandwidth is most likely to be strained as 5G becomes more widely adopted.
As the demand for and reliance on wireless data increases, our infrastructure for providing that data needs to keep up. Without increasing the amount of wireless spectrum that’s available for licensed commercial use, the U.S. will inevitably reach the point where consumer demand outstrips supply, leading to consumers paying more for data. Allowing the FCC to auction off licensed portions of the wireless spectrum is necessary to ensure inexpensive data continues to be available to consumers in the future.
Justin Leventhal is a senior policy analyst for the American Consumer Institute, a nonprofit education and research organization. For more information about the Institute, visit www.TheAmericanConsumer.Org or follow ACI on Twitter @ConsumerPal.