FCC: New wireless spectrum worth upwards of $120B, more than double 2008 value

Last year, Federal Communications Commission chairman Julius Genachowski warned of an impending "spectrum crisis" where the demand for wireless connectivity vastly outstrips our ability to support wireless connections. Wireless spectrum is a finite resource.

To tackle this problem, the National Broadband plan includes the goals of increasing the wireless spectrum by 300MHz in the next five years, and by 500MHz in the next ten.

Today, the FCC released a whitepaper called "Mobile Broadband: The Benefits of Additional Spectrum" which shows the FCC's projections for wireless demand, the potential value of licenses, and the economic impact it will have on the United States.

According to the whitepaper, mobile broadband traffic will grow to a size more than 35 times greater than its current level. FCC Chairman Genachowski today said this could even turn out to be an underestimation, since the studies were done "before the iPad boom."

Genachowski continued, "Few people outside this room know what a megahertz is, but everybody knows the value of a dollar. The white paper puts the importance of this debate in perspective by assessing the economic value of this spectrum, which it estimates to be as high as $120 billion."

This is the sticking point of the paper.

In 2008, when the FCC auctioned off the 700MHz block of spectrum, it got more than $19 billion in bids from wireless network operators bidding on 100MHz worth of licenses.

$120 billion for 300MHz is more than double what was paid in 2008.

The Consumer Electronics Association applauded this valuation today.

"CEA supports this paper's conclusion that a spectrum deficit approaching 300MHz is likely by 2014, and that the benefit of releasing spectrum is likely to exceed $100 billion," CEA president Gary Shapiro said in a statement today. "The Commission has certainly done its homework by evaluating the data demand, network density, spectral efficiency and baseline spectrum use. They have proven what CEA has long believed, the spectrum crisis is a pressing issue that needs to be addressed sooner rather than later. Additional spectrum is key to our national competitiveness and the future of technology innovation."