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Policy Implications in the Rise of Mobile Broadband and Heterogenous Network Access

Over the last few months, a growing consensus has emerged pointing to a dramatic change in the way people access the Internet.

In 2011, for the first time ever, worldwide annual demand for smart phones surpassed that of PCs, laptops and tablets combined. Then last month our Mobile Visual Networking Index (VNI) Update reported that global mobile data traffic is growing even faster than previously forecasted and will increase 18-fold over the next five years.

So by this year’s Mobile World Congress in Barcelona in February, the ‘top of mind’ for network operators, government officials and device manufacturers was the dramatic accelerating impact that mobile data consumption will have on Internet access, networks and users.

When we launched the mobile VNI report on February 14, a panel of industry, academia and government experts glimpsed into the future of mobile broadband and related policy issues, with three key takeaways:

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An Unlicensed Roadblock?

The road to US spectrum reform often feels like  anything but a Superhighway.  New obstacles emerged just today, when it became apparent that House Members on the Energy and Commerce Committee have yet to reach agreement on much needed spectrum legislation.

The latest roadblock?  What to do about unlicensed spectrum.

As the leading provider of unlicensed devices in the world, Cisco has a unique business perspective on this matter and has thought a lot about this should be reconciled, and our perspective is well settled.

We strongly believe that unlicensed technology such as WiFi will be a critical part of addressing the rising demand for data traffic from smartphones, tablets, laptops, and a myriad of other mobile devices.  Mobile carriers need more spectrum to address this demand, and more spectrum is needed for unlicensed devices, too.  For unlicensed, policymakers should focus their attention on 5 GHz and the benefits of expanding the existing vibrant WiFi ecosystem.

If we take a wrong turn now, then we will miss an enormous opportunity to free up more spectrum for mobile broadband and generate billions of revenue for the federal government.

Here’s why:

First – Congressional action on spectrum would yield enormous benefits in the short term – driving economic growth, creating jobs, and spurring innovation.  With any legislation, there will be different views.  That’s part of the process.  But differences should not bring the process to a standstill.

Spectrum legislation is needed to give the FCC tools to make more wireless broadband spectrum available. Based on Cisco’s Visual Networking Index data demonstrating the projected growth in mobile data, it is critical to get this issue addressed. In addition, it is critical to move forward on transitioning more spectrum from federal use to commercial use.  We are at the very beginning of the mobile broadband explosion, and failure of policymakers to act now will mean a lack of connectivity, dropped connections, and slow data rates in the future.  No one wants that outcome.

Second – the value of WiFi and other unlicensed technologies that run on unlicensed spectrum is to take spectrum that would otherwise not be used, and to put it to productive work.  In other words, in situations where unlicensed can co-exist with an existing use, and not interfere with that use, that ability to “share” is the economic dividend that should command the policymaker’s attention.

The expansion of unlicensed technologies such as Wi-Fi from the original 2.4 GHz band into 5 GHz occurs in a shared environment and has proven to be remarkably successful– unlicensed shares with federal systems at 5 GHz, using spectrum that would otherwise lie fallow.   Maximizing industry’s ability to put that spectrum to work, without creating harmful interference to existing users, should be everyone’s goal in a world where WiFi is in every mobile device, and new WiFi applications are growing at a brisk clip.

Third – a critical question in spectrum reform is whether the reform will result in spectrum being put to work in the economy.  Unlicensed spectrum at 5 GHz consists of an ecosystem of large, well-established chipset manufacturers, hundreds of radio manufacturers and others who already are producing technology for sale in most countries of the world.   If additional unlicensed spectrum is made available at 5 GHz, there is an immediate impact to US industry to produce innovative new products, and drive new applications, to benefit business and consumers.   For that reason, Cisco strongly favors policies that support an examination of whether additional shared spectrum at 5 GHz can be made available to unlicensed.

Proposals before Congress to create a new, sub 3-GHz spectrum band for unlicensed, such as a new band in the TV UHF band dedicated to unlicensed, put the emphasis in the wrong place.  New radio ecosystems, even in favorable circumstances, can take a decade or more to develop, leaving spectrum unused at a time when the licensed mobile industry has an acute demand for it.  Whether a new unlicensed ecosystem could successfully develop in the UHF band is anybody’s guess.

Of equal importance, clearing spectrum below 3 GHz for unlicensed  excludes one use (licensed mobile) in favor of another  (unlicensed).  Contrast that to unlicensed use at 5 GHz, where existing federal users remain, unlicensed devices operate on spectrum that would otherwise remain idle, and everyone benefits from more intensive use of the radio spectrum.  To Cisco, shared spectrum use, building off the  existing ecosystem at 5 GHz, presents the most compelling vision for unlicensed.

Movement on Free Trade

Cisco is pleased that the White House announced yesterday that it submitted to Congress the implementing legislation for pending free trade agreements with Korea, Colombia and Panama.  Cisco supports Congressional passage of the bills – along with legislation to renew the Trade Adjustment Assistance program – in a few short weeks.

As described previously, we expect implementation of the agreements to increase market access for Cisco products and services in these rapidly-growing markets.

Cisco Welcomes Congressional Action on Free Trade

Cisco welcomes Senate Finance Committee Chairman Max Baucus’ (D-MT) announcement yesterday that the Committee intends to move legislation to implement pending U.S. free trade agreements with South Korea, Colombia and Panama, as well as to renew Trade Adjustment Assistance. Cisco also appreciates the bipartisan approach taken by Committee’s Ranking Member Orin Hatch (R-UT), who has been instrumental in helping build consensus and create momentum in Congress to pass these agreements. As I’ve indicated in previous posts, Cisco supports Congressional passage of trade agreements as soon as possible, and we expect implementation to increase market access in these growing markets.

Coming to Grips with the Coming Spectrum Crisis in the United States

For all of you who rely on your smartphone, tablet or laptop, your elected representatives have given you  something to cheer about. Mobile data traffic is projected by Cisco to grow 21 times between 2010 and 2015, from about 45 petabytes per month to over 900 petabytes per month.  All those “bytes” need radio spectrum – and lots of it.  More spectrum than is available today.  And more spectrum than what the US government can provide based on current inventories.

The Senate Commerce Committee looked the mobile future in the face and today approved Senator Jay Rockefeller’s (D-WV) and Senator Kay Bailey Hutchinson’s (R-TX) bill to make available significant new spectrum for commercial wireless networks (both licensed and unlicensed) and for public safety.  While there is likely to be a long and winding road before Congress sends a spectrum bill to the White House, a committee vote is an important milestone in moving from policy ideas to concrete legislation.

The Senate Commerce Committee’s action today, if it becomes law, would open a minimum of 84 MHz, and quite possibly more, spectrum for licensed carrier use in spectrum now assigned to broadcast television.  It would also require the FCC and the National Telecommunications and Information Agency to consider opening an additional 120 MHz of spectrum in the 5 GHz band – now increasingly used for Wi Fi.  Public safety would get more spectrum, too, from a 10 MHz piece of spectrum previously assigned to commercial uses but not auctioned.

Is all this spectrum really necessary? Yes.  With demand soaring at unprecedented rate, carriers are increasingly offloading data traffic to Wi Fi.  The wireless technologies that are used to deliver broadband access require broad blocks of spectrum to work efficiently.  More spectrum provides a path forward for innovation – for newer, faster and better devices and applications.  And the action helps each of us in our daily lives – more spectrum will be a huge help in avoiding future congestion so that we can enjoy all those powerful (and fun!) devices and applications.

Cisco joined with the tech industry to advance this legislation, and we will continue to champion the cause of more spectrum as the bill continues to wind its course through Congress.