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Technology / TECHNOLOGY

Wireless Industry Report Claims Huge Benefits to Economy

Broadcast antennnas against the sunset. Broadcasters and wireless companies are competing for scarce spectrum(shutterstock.com)

photo of Juliana Gruenwald
May 1, 2012

The wireless industry, struggling for more spectrum and regulatory relief, commissioned a study released Tuesday showing the direct and indirect economic benefits wireless companies bring -- most notably by supporting 3.8 million jobs.

The study, conducted by Roger Entner of Recon Analytics and funded by the wireless industry group CTIA, analyzed economic data to determine the impact of wireless firms and the industries they support, which include wireless device makers and application and content providers. It found the industry helped contribute $146 billion to the annual U.S. gross domestic product from June 2010 to June 2011 and projected it could generate as much as $1.4 trillion in economic gains over the next decade.

“It’s really an American industry generating American jobs with American taxes that are really supporting the American people,” Entner said during a panel discussion sponsored by the Progressive Policy Institute.

 

Entner outlined a long list of other ways he said the wireless industry is having a dramatic impact on the U.S. economy. For example, he said the wireless industry is now bigger than air transportation, agriculture, hotels and lodging, movies and the recording industry and car manufacturing. The report also aimed to quantify the economic benefits of freeing up more spectrum – a key wireless industry policy objective. Entner’s report estimated that every 10 megahertz of spectrum made available to wireless companies helps boost U.S. GDP by $1.7 billion and provides 7,000 jobs.

Industry officials say that policymakers must respond with policies that will help support the industry’s continued growth, starting by freeing up even more spectrum to help fuel the growth in wireless technologies such as smart phones and tablets. They want to eliminate government policies they say make it more difficult to free up more spectrum for wireless technologies and to promote investment in the industry.

“The data should drive policy and drive us all to recognize that if we agree with this type of infrastructure being a national goal and objective…then we need [government] policies that effectuate that,” said Jim Cicconi, AT&T’s senior executive vice president for legislative and external affairs.

Cicconi and other industry officials have argued that the spectrum legislation passed by Congress in February was a good start in freeing up more spectrum by authorizing a process to get broadcasters to give up some of their airwaves. "We need to be able to bridge the gap between now and when that broadcast spectrum becomes available," Cicconi added.

To do this, he urged the FCC to make it easier for spectrum holders who are not using their spectrum now to sell it to wireless firms or others who can put those airwaves to better use. “What is needed in that area is for the FCC to recognize the importance of the secondary market,” he said.

While not mentioning the transaction by name, Cicconi could have been alluding to Verizon’s bid to buy spectrum from a group of cable companies that have dropped plans to launch their own wireless service. The FCC is currently weighing whether to approve the transaction, which is opposed by public interest groups and smaller wireless firms such as T-Mobile USA.  

Cicconi also called on Congress to take up the difficult task of rewriting a 1996 telecommunications law to better reflect the current marketplace, which is no longer dominated by one major wireline telecom company. He said he is hopeful that after the next election, lawmakers will begin debate on what changes need to be made to the 1996 law, which focused on allowing local telephone companies and long-distance telephone providers to get into each other’s markets.

“I think everyone recognizes that act is out of date,” he said.

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