Over the past decade we have watched the wireless industry undergo a veritable metamorphosis, a smartphone inspired paradigm shift that transformed wireless networks from a voice service into a mobile data pipeline.
While ten years ago the available spectrum could have handled the extant voice traffic a thousand times over, today that same bandwidth is crumpling under our insatiable appetite for data. In fact, over the next three years data will account for 97% of network traffic, with voice making up the remaining 3%. The problem, as we all know, is that available network spectrum is limited and companies have backed themselves into a corner, unable to expand or improve their services because the bandwidth simply isn’t there.
In an effort to assuage this spectrum pinch, Verizon is looking to take matters into its own hands, striking a deal with major cable companies like Comcast to purchase their unused spectrum. Despite the fact that Verizon is defending the deals as necessary to move the wireless industry forward, the proposal is garnering a great deal of criticism from Federal regulators over antitrust concerns; which begs the question, is there another way to solve the spectrum crisis?
In an insightful piece regarding the looming spectrum shortage, eCommerce Times writer Jeff Kagan offers several solutions to solve, or at least assuage, the ongoing bandwidth issue.
As one possible solution, Kagan writes, companies like Verizon and AT&T need to develop better technologies to help manage and increase the efficiency of their current networks. Unfortunately, as Randall Milch, executive vice president of Verizon Communications said in defence of the spectrum acquisition deal, it doesn’t look like Verizon “can engineer our way out of the spectrum crunch…more spectrum is necessary.”
The second option Kagan suggests is far more controversial. As a way to solve the spectrum crisis and avoid regulatory scrutiny, wireless giants like Verizon and AT&T must learn how to share; systemic change that would see, “all wireless carriers…share all available spectrum.” Simply put, all carriers would pool their spectrum resources together and then pay to access what they need.
The benefit of such a controversial plan is that it would assuage the spectrum crisis for the foreseeable future, giving companies access to the spectrum that they need to advance the wireless industry. The problem, however, is that both Verizon and AT&T are near-sighted, working hard to secure their own spectrum without thought of the effect it has on their other competitors.
Consider this, back in the 90s, in the middle of the war between Apple and Microsoft (a war that Apple came perilously close to losing), Microsoft made a bold and unexpected move, it invested in its primary competitor. The thinking, of course, was that if Apple should fold it would negatively affect Microsoft, primarily through increased regulatory scrutiny due to monopolization concerns.
As Kagan notes, The Big Two should pay attention to that story, because, “if they win this battle over spectrum and other carriers lose customers and even fold, then suddenly they will be in the crosshairs of the U.S. government.”
In the end, as spectrum woes continues unabated, its time for Verizon and AT&T to start taking some responsibility for the wireless industry as a whole, finding new and efficient ways of managing their respective networks and perhaps considering radical shared spectrum measures to maintain the critical competitive market balance, its certainly in their best interests to do so.