Wireless carriers are opposing net neutrality because their networks have limited capacity and they need more flexibility to handle traffic. But they are missing an opportunity by not embracing spectrum sharing, a technology that could vastly increase the available bandwidth.
Net neutrality has been in the headlines following Verizon's recent Federal court win against the Federal Communications Commission's (FCC) open Internet rules. Also, AT&T is now courting corporate sponsors to help subsidize customer data plans. Some consumer rights groups view these events as a concerted effort to undermine the longstanding practice that compels service providers to treat all traffic equally. These events could all signal the beginning of a tiered-off Internet.
Why this is occurring merits some explanation, because consumers have come to expect net neutrality. The US wireless industry is opposing the FCC's open Internet rules for a number of legal and business reasons. Verizon had argued that the FCC couldn't regulate it under common carrier law, and a Federal judge agreed. That's because the data carrying capacity of airwaves is more limited than landlines, and many carriers, including Verizon, would like more flexibility to handle traffic based on their business realities and what the market will bear. Carriers have invested billions to build out high-speed data networks throughout the US, and more to win government auctions for parcels of spectrum -- the invisible infrastructure for our wireless communications. They want more flexibility to recoup those capital expenditures, which have grown by 70 percent since 2007 in the US.
Why are carriers spending so much? They are building out LTE data networks and acquiring spectrum, our invisible wireless infrastructure, which is prohibitively expensive. Blocks of spectrum are parceled off and sold at auctions by the government. This is a policy tool that has supposedly worked to date, but results in decreased competition and inefficient use of spectrum, all while demand is rising. Smartphones use 120 times more data than traditional cell phones.
The FCC recognizes that its outdated, auction-based method for adding capacity is in fact having the oppose effect as more devices join carriers' networks. The culprit is not net neutrality. FCC Commissioner Mignon Clyburn recently said "New approaches and policy tools are needed. What is clear to me is that we should encourage technological creativity for the use of spectrum, because ultimately, these advances have the potential of improving the lives of our citizens". Rescinding net neutrality wouldn't make our lives better or solve the inefficiency problem.
Repealing Net Neutrality Dampens Innovation
The customer experience could change dramatically without net neutrality. You might have to pay more for your connection depending upon the time of day or need for speed. Services would be priced a-la-carte. For example, some service providers may want to cut special deals with content providers (like Google) or OTT (Over-the-Top) applications (like Netflix) to insure these services get prioritized delivery. Without it, these services might be slow or constantly buffer in times or areas with high wireless broadband demand. While these established providers may be able to afford these payments, other new or smaller competitors may not, and become second-class citizens on the network.
Specifically, subscribers may have to pay extra to access streaming sports sites. ESPN might need to compensate a wireless carrier to have its sports package delivered to mobile users. However, a sports package branded by the carrier might not incur an extra charge while still getting priority delivery. Without net neutrality, carriers can favor their own content. That limits consumer choice and reduces value.
US consumers already pay up to 38 times more than Japanese ones to access the Internet. The end of net neutrality could mean less choice and a likely increase in the cost of data plans. Verizon and AT&T have already raised data prices to manage increases in demand and are seeking to purchase more spectrum. Additional costs to carry content threaten the ability of Internet startups, and could increase the barriers for even more mature businesses such as Google or Netflix, to deliver their products.
The federal government is offering to share vast amounts of spectrum with commercial carriers to prevent this scenario from occurring. It would behoove carriers to follow its lead and explore new spectrum management technologies.
Spectrum Sharing Adds Lanes to the "Highways"
Slowing traffic from some content providers would cause a significant upheaval of the consumer marketplace, which may not be well received, could dampen innovation, and is entirely unnecessary. There’s plenty of spectrum that sits unused by the government and even by the very service providers fighting net neutrality. Sharing idle spectrum, or making more of it unlicensed like Wi-Fi, would create ample additional network capacity that could help meet the rising demand for data services. Innovation, not artificial limitations, is the solution to unfettered content delivery to consumers.
A shared spectrum approach to the problem would allow carriers to offer exclusive content or OTT application packages in addition to existing services like Google and Netflix, because there would be more bandwidth available. Consumers would win by having more choices.
Leveraging shared spectrum assets enables carriers to monetize existing capital investments, minimizing or eliminating new spectrum costs, while ensuring a higher quality customer experience. It's a win-win for carriers and customers alike. Spectrum sharing will end dropped calls and broken data pipelines by offloading saturated networks during peak demand. This will increase overall network reliability and capacity.
Spectrum sharing technologies and more unlicensed spectrum are the optimal solutions to the network issues carriers are facing, and will preserve net neutrality.
The cost of your data plan could soar as your web access is limited, but these changes -- which may result from the move to undo net neutrality -- can be prevented. Service providers can monetize their 4G network investments and preserve net neutrality while remaining profitable by adopting the latest spectrum management technologies.
Rick Rotondo is VP of marketing and publication relations at xG Technology, a provider of radio spectrum technology.