Cisco VNI’s latest forecast projects rapid growth for U.S. mobile data traffic over the next five years. Such growth is only possible, of course, if there is enough capacity available to carry the traffic, and that capacity requires additional spectrum as well as additional infrastructure. To meet the needs of American consumers and businesses, the Federal Communications Commission (FCC) is preparing to clear and auction massive amounts of millimeter-wave and mid-band spectrum that can be used for 5G, the next generation of wireless technology.
Over the next five years, from 2017 to 2022, Cisco projects that total U.S. mobile data traffic will grow roughly five-fold to reach 5.7 exabytes per month, with 80% of that traffic coming from video. Most of the traffic will come from consumers, who are projected to generate 4.4 of the 5.7 exabytes per month. However, businesses will also grow mobile data traffic rapidly, roughly quadrupling traffic from 2017 to 2022. The average smartphone, which generated 4 megabytes of traffic per month in 2017, is projected to generate 15.4 megabytes in 2022.
Not only the amount of mobile data traffic is projected to increase, but also the speed at which it moves. In 2022, Cisco projects that the average mobile data connection’s speed will be 39 megabits per second, roughly triple the 2017 speed of 13.5 mbps.
The FCC is moving rapidly to create the supply of spectrum necessary to serve such growth. It is currently in the process of auctioning spectrum in the 28 gigahertz (GHz) band and will follow that with an auction of spectrum in the 24 GHz band. The 28 GHz auction is providing two 425 megahertz blocks i.e. a total of 850 megahertz. The 24 GHz auction will provide seven blocks of 100 megahertz, for a total of 700 megahertz. To place those amounts in perspective, the FCC’s 2010 National Broadband Plan’s goal was to clear 500 megahertz of spectrum by 2020.
On December 12th, the FCC issued an order to facilitate the auction of spectrum in the 37 GHz, 39 GHz, and 47 GHz bands, with 1000 megahertz, 1400 megahertz, and 1000 megahertz being auctioned in those bands, respectively. The order will make it possible to auction spectrum in these bands in blocks of 100 megahertz, enabling both incumbents and new buyers of spectrum to aggregate the wide swaths of spectrum that make it possible to provide high-speed mobile broadband at these high frequencies.
The advantage of using this high-frequency spectrum is that it is available in such large amounts. However, its propagation characteristics are challenging, with such millimeter-wave signals travelling much shorter distances than signals at lower bandwidths. That means that cell sites have to be placed far more densely to provide coverage at millimeter-wave frequencies than at lower frequencies, requiring hundreds of thousands of cell sites to be placed within the next five years.
The FCC responded to one aspect of that challenge—the approval process for sites–via its September 26th wireless infrastructure order, which addressed both the cost and time frames for approval of small-cell sites, creating reasonable shot-clocks and safe-harbors while allowing for divergence in exceptional cases.
The FCC has also started to look at providing spectrum for mobile data at lower frequencies, including 3.7-4.2 GHz. Mid-band frequencies have the advantage that their signals travel longer distances than millimeter waves, and thus provide a greater coverage area per cell site. This coverage advantage is particularly important in sparely-populated rural areas, where mobile subscribers both live far apart and tend to travel great distances.
Bottom line, the FCC is working quickly and carefully to facilitate the rapid growth in mobile data traffic that American consumers and businesses need and desire.
Anna-Maria Kovacs, Ph.D., CFA, is a Visiting Senior Policy Scholar at the Georgetown Center for Business and Public Policy. She has covered the communications industry for more than three decades as a financial analyst and consultant.
