PROTECTING SMALL BUSINESS, PROMOTING ENTREPRENEURSHIP

Getting Spectrum Policy Right for Small Business Growth

By at 5 July, 2024, 11:27 am

by Raymond J. Keating –

Technological advancements, including in the area of broadband, are vital to starting up and building small businesses. It follows that it’s critical that elected officials and their appointees get policies right that affect broadband.

What does “right” mean? It’s about policies that serve as a sound foundation for the private investment and innovation that improve and expand broadband services. That includes making sure that a robust pipeline of spectrum is available for auction to ultimately benefit small businesses and their customers across industries.

The Importance of Spectrum

Make no mistake, the availability of spectrum is essential to driving investment and innovation, and expanding and improving the ways that small businesses and local communities can access to and seize opportunities in the digital economy.

What we’ve already seen, of course, has been rather breathtaking. For example, the CTIA has reported that 5G, which was launched in 2018, now covers 325 million Americans, and the 5G rollout has been twice as fast as 4G. That, of course, is about investment:

“Wireless providers continued to demonstrate their commitment to customers and the future of wireless, investing $39 billion in 2022—a record level of investment. Since 2018, the year 5G launched, providers have invested over $160 billion in their networks.” But there was more, according, again, to CTIA: “In addition to capital expenditures, the industry has also spent billions of dollars on spectrum licenses to fuel our 5G ambitions. Since 1993, wireless providers have invested $233 billion in FCC spectrum auctions to power mobile networks—over $108B since 2020 alone.”

In a letter to the National Telecommunications and Information Administration last year, SBE Council President and CEO Karen Kerrigan noted the importance of this investment from the small business perspective:

“Each successive generation of wireless technology has delivered these new waves of innovation through its downstream effects. Small businesses and entrepreneurs across the country are now utilizing the security and reliability of 5G to participate and compete in the digital economy. More spectrum will be needed to connect more communities and to provide equitable and affordable access to the next wave of technologies.”

Looking ahead, CTIA has noted: “Brattle Group finds the U.S. needs 400 megahertz of full-power, licensed spectrum in the next five years to meet projected demand. This deficit will grow to nearly 1,500 megahertz by 2032. Licensed spectrum is what wireless data runs on, and to keep up with the demand curve for data and devices, more licensed spectrum is needed. But today, the spectrum pipeline has run dry. Wireless also has less spectrum than unlicensed and government users, particularly in mid-band frequencies, which offer an ideal blend of capacity and coverage for 5G.”

What Congress Must Do

Indeed, mid-band spectrum is needed to allow the full promise of 5G to flourish for entrepreneurs and their employees, along with the customers they serve across communities. Expanding 5G means, again, expanding opportunity for small businesses to operate more efficiently, to innovate, to engage with customers, and to do business in creative and unimaginable ways.

Congress needs to take action by extending FCC spectrum auction authority coupled with a clear and defined spectrum pipeline. This is a critical combination, i.e., again, auction authority and clarification on spectrum pipeline.

Make no mistake, the growth of U.S. entrepreneurship and competitiveness depend on more spectrum to fuel 5G expansion.

Raymond J. Keating is chief economist for the Small Business & Entrepreneurship Council. His latest books on the economy are The Weekly Economist: 52 Quick Reads to Help You Think Like an Economist, The Weekly Economist II: 52 More Quick Reads to Help You Think Like an Economist and The Weekly Economist III: Another 52 Quick Reads to Help You Think Like an Economist.

 

 

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