Spectrum is Important to Electric Industry

by Steve Largent, CTIA-The Wireless Association

Few industries impact almost every aspect of people’s lives such as the electric and wireless industries do.

Yes, people could live without either one of our respective sectors, but we make people’s lives easier.

So what happens when you integrate two phenomenal industries that individually provide tremendous benefits for consumers? We create revolutionary smart grid technology.

By deploying mobile meters and machine-to-machine (M2M) communication technologies that interconnect electric grids, wireless technologies provide on-demand or real-time information that saves millions–or potentially billions–of dollars and reduce everyone’s environmental footprint.

By 2030, the Electric Power Research Institute estimates, the implementation of smart grid technologies will have saved $20.4 billion for U.S. consumers and businesses by reducing electricity usage 4 percent.

This is significant savings; Xcel Energy projects a 40 percent increase in consumer demand for utilities within the next 25 years.

Smart grid technology allows utility companies to monitor and manage these highly complex utility systems, which stabilizes their grid by preventing outages, improves power distribution and provides vital information to deal with other potential issues.

It allows utility companies to be more cost-efficient by managing their supply with consumer demand. Smart meters allow consumers to manage their usage better, which lowers their costs and carbon footprint.

Although smart grid is a relatively new concept, President Barack Obama, many members of Congress and the Federal Communications Commission (FCC) have identified it as a solution to advancing our nation’s energy independence and efficiency.

Related pilot projects are in place today in the U.S., and ABI Research projects some 212 million smart meter systems and smart grid projects will be installed worldwide by 2015.

Morgan Stanley analysts predict the smart grid market will grow from about $20 billion in 2010 to nearly $100 billion by 2030.

The benefits of smart grid technology for consumers, businesses and the environment are clear. Nevertheless, a looming spectrum crisis could prevent these benefits from being realized.

To explain spectrum, I use the analogy of our nation's roads. There’s tremendous traffic on our roads, and as it increases, we need more lanes and better highways to meet those demands. The same holds true for wireless networks. Experts predict consumer and enterprise demand for wireless services and products will grow exponentially in a short time, so we need more roads, or spectrum.

We can build more highways, but building more spectrum is impossible because of physics. Spectrum is a precious, finite resource, and we must ensure every entity uses it as efficiently and productively as possible. The U.S. wireless industry is one of the most efficient spectrum users in the world.

Other industries, such as broadcast, have significant amounts of unused or underused spectrum. The president, numerous members of Congress, the FCC and other policymakers strongly support auctioning this unused and underused spectrum to ensure its highest and best use.

The benefits of such an auction also are supported by 112 of the nation's leading economists, including Nobel Prize winners, former members of Democratic and Republican administrations and former FCC chief economists.

Conducting an auction for this spectrum makes sense. U.S. consumers may choose from the best wireless products and services in the world. The industry is committed to providing that same level of choice in the future, and the demand only will increase.

This incentive auction of broadcast spectrum is vital to ensuring the U.S. wireless industry continues fueling its virtuous cycle of innovation. Spectrum allows new technologies to be developed and updated throughout the wireless ecosystem. As long as spectrum is available, the industry continues to invest in networks to handle more users, device manufacturers develop new capabilities for handsets and content developers create new apps and content.

Consumers win because we meet their insatiable demand for the best and fastest products and services in the world. This is a cycle that never ends, but only if spectrum is made available.

A fact-based white paper that reviews past auctions proves the incentive auction of broadcast spectrum would gross at least $36 billion for the U.S. Treasury. In addition, the auction would provide funds to accommodate the necessary changes for participating broadcasters when the spectrum is auctioned and licensed for commercial wireless use.

The combination of the wireless and electric industries means great things for Americans and America, but the U.S. wireless industry’s need for more spectrum is key to achieving the economic and environmental benefits of smart grid technology.

Overhauling the existing U.S. electric power distribution network so it would be a smart grid system by 2030 would cost at least $1.5 trillion.

Instead of utility companies’ developing their own expensive networks, it makes more sense to use our members’ commercial wireless networks. One estimate indicates building and managing a network could cost a utility more than $110 million over 10 years, compared with $54 million for relying on a commercial provider for the same service over the same time.

Commercial wireless networks are cheaper, ubiquitous, secure and highly reliable. In addition, wireless carriers have spent more than $20 billion per year during the past 10 years to upgrade their networks.

They are equipped to handle smart grid needs and the host of other wireless services and products consumers love and rely on.

Everyone has a responsibility to the environment to ensure our planet is healthy for future generations. Through smart grid technology, the electrical and wireless industries offer tremendous financial and environment benefits.

These advantages, however, are in jeopardy unless we work together to get more spectrum. Please join us by telling your members of Congress that you support getting more spectrum for the U.S. wireless industry so we can deploy smart grid technology across the country. Our future generations will thank us for leading this important initiative.

Author

Steve Largent is president and CEO of CTIA-The Wireless Association, an international nonprofit membership organization that has represented the wireless communications industry. Largent represented Oklahoma’s First Congressional District in the U.S. House of Representatives from 1994-2001. He also was a wide receiver with the Seattle Seahawks for 14 years and participated in seven Pro Bowls. He was inducted into the Pro Football Hall of Fame in 1995 and the World Sports Humanitarian Hall of Fame in 2006. 

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