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The Value of Unlicensed Spectrum

Alex Reynolds, Julie Kearney, Mike Bergman
When you want to understand how much something is worth, it’s often helpful to think about what would happen if that thing disappeared.

Some consequences are easy to imagine. For example, if you don’t have a car, you might not be able to get to work. Without a coffee maker, you might have trouble staying awake. But do you know what would happen if you didn’t have radio frequency spectrum? You might be surprised.

Without spectrum, life isn’t just inconvenient, it’s positively medieval.

That’s why in 2010 the Federal Communications Commission (FCC) identified a need for new commercial spectrum in its National Broadband Plan. It recognized that consumers’ demand for wireless data is growing at such a fast rate that the spectrum assigned for commercial use just isn’t enough. The Consumer Electronics Association (CEA) values the FCC’s hard work thus far to avoid this “spectrum crunch.”

Solving the spectrum crunch is even more complex than just freeing up spectrum. Different types of spectrum have advantages and disadvantages, which means that the right mix is necessary. For example, licensed spectrum is expensive to obtain and deploy, but because it is exclusive, wireless service providers have more certainty in terms of where and how they can deploy it. On the other hand, unlicensed spectrum allows manufacturers to innovate quickly and cost-effectively, and it gives consumers access to technologies like Wi-Fi.

CEA believes that licensed and unlicensed spectrum need to work in harmony to maximize innovation and to best serve consumers. Today, we are releasing a report that takes a unique look at unlicensed spectrum.

Collectively, we estimate that 24 types of unlicensed wireless devices generate $62 billion annually for the U.S. economy, just in terms of direct retail sales. Moreover, we estimate that growth of devices that rely on unlicensed spectrum is extremely strong. The IRSV contributed by Bluetooth, NFC, devices using the 802.15.4 standard, and RFID technologies alone has a cumulative annual growth rate of about 30 percent. That’s huge. If we measure value indirectly using metrics like cost-savings from Wi-Fi offload, unlicensed is worth even more.

We harness unlicensed spectrum to perform everyday tasks. In the future, we will rely on it even more as it powers specialized devices that communicate with each other—the Internet of Things. CEA looks forward to continuing our work with the FCC to make sure the necessary spectrum resources are available to keep innovating.