Spectrum Reassignment Bodes Well For Economy

In this lagging recession, much hope has been pinned on future broadband communications jobsand for good reason. Between 2002 and 2010, capital spending in the wireless industry is said to have exceeded $185 billion. On average, it created about 420,000 jobs throughout the economy (based on CTIA investment figures and the BEA 2010 employment multiplier). In a new study by Mobile Future and David Sosa and Marc Van Audenrode from Analysis Group, Inc., financial analysis is provided to show how robust private-sector investment can lead to substantial job creation. The eight-page paper, titled "Private Sector Investment and Employment impacts of Reassigning spectrum to Mobile Broadband in the United States," focuses specifically on the stimulation that can be gained through the reassignment of spectrum to mobile broadband.

The authors investigate the ramifications of the plans of the Federal Communications Commission (FCC), which has proposed making 500 MHz of additional spectrum available for mobile-broadband use over the next 10 yearsincluding 300 MHz in the next five years. Their study concludes that reassigning an additional 300 MHz of spectrum to mobile broadband over five years will spur $75 billion in new capital spending. It will create more than 300,000 jobs and $230 million in gross domestic product (GDP). If an additional 200 MHz of spectrum is released after five years, it will create an additional 200,000 jobs and increase GDP by an additional $155 million.

The paper points out that there is no choice but to add spectrum, as US networks are already operating at 80% capacity. Yet the number proposed is likely insufficient: Experts estimate that between two and four times this amount will be needed by 2020.

According to macroeconomics principles, increased capital spending by mobile-broadband service providers would spur increases in spending by direct suppliers to the industry as well as suppliers' suppliers. Additional spillover effects also are expected, such as new software applications, mobile devices, and healthcare applications. The authors warn, however, that a delay in the spectrum reassignment will mean a delay in both private-sector investment and job creation.

TAGS: Technologies
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