WiFi is getting crowded: Should the FCC reserve more spectrum for it?

All WiFi signals travel over frequency ranges in the wireless spectrum, and those ranges are getting increasingly crowded as people use more internet-enabled devices and require more data usage. These frequency ranges, called “bands,” can only handle so much traffic at one time, and it is the responsibility of the Federal Communications Commission (FCC) to allocate different bands for different purposes. Currently, only the 2.4 and 5 gigahertz (GHz) bands are reserved for WiFi, but due to the more crowded frequencies, the FCC is considering opening up additional bands.

One band that could be a potential candidate for reallocation is the range around 5.9 GHz. Back in 1999, the FCC reserved this band for “dedicated short-range communications” (DSRC) between vehicles, but since then it has remained relatively unused. So far, Cadillac is the only car company to have implemented a system that actually uses 5.9 GHz for DSRC. This had led policymakers to consider whether using the band for WiFi would be a more practical use for this part of the spectrum. A recent report from researchers at the RAND Corporation report attempted to estimate the value that would come from making this change.

According to the report, WiFi speeds could improve due to the wider bandwidth channels that the 5.9 GHz band would make available. Given the central role of the internet for both businesses and consumers, this speed improvement could increase spending and business activity. By examining the relationship between internet speeds and the GDP of U.S. states over a period of seven years, the authors predicted between $60 billion and $97 billion in national GDP growth as a result of this speed increase.

WiFi capacity could also increase significantly. This would allow users to purchase and use more devices and more data, which the authors estimated could increase GDP by $71 billion–$106 billion. Alternatively, WiFi could become significantly cheaper as its supply increases, benefiting consumers and businesses who pay for broadband. While not reflected directly in GDP, these sorts of changes could increase consumer surplus (money that consumers would have willingly paid for internet service, but which can now be spent on other goods) by $65 billion–$172 billion. Telecom businesses could benefit too, since cheap WiFi would allow them to shift their traffic from expensive cellular towers to cheaper WiFi networks. The authors estimated this producer surplus at $18 billion, for a total surplus of between $82 billion and $190 billion.

The potential economic benefits of expanding WiFi’s share of the spectrum are enormous when compared to the value of what is now a virtually empty band. However, the authors pointed out that the FCC should also consider shifting trends in technology usage before committing to a change.

Many of these trends point to increased demand for WiFi, reinforcing the idea that a reallocation would be valuable. “Digital natives”—the generation raised from childhood as users of electronic media—are spending more time online, more people are working remotely via the internet, and WiFi is becoming increasingly critical for communication between machines. All of these trends indicate increasing demand for WiFi capacity over time. However, vehicle-to-vehicle communication is becoming increasingly important as well—though much of this communication occurs outside of the 5.9 GHz band. This band could be much more valuable than it currently is if it were to be widely used for communications that prevent accidents or that connect vehicles to infrastructure. Even though Cadillac is the only car manufacturer to use the band for vehicle-to-vehicle communication right now, Toyota and Lexus have announced planned integrations. The National Highway Traffic Safety Administration has already begun to codify guidelines for using the 5.9 GHz band for autonomous vehicles. At the same time, other manufacturers have also begun developing ways to use standard cellular networks for vehicle-to-vehicle and vehicle-to-infrastructure communication. If connected vehicles can simply use the same technology that we use every day for phone service, then a dedicated DSRC band might not be necessary.

Given this uncertainty, it is difficult to predict the net value of reallocating the 5.9 GHz band. The RAND report makes a compelling case that WiFi improvements are valuable, but regulators should also take into account the growing need for vehicle-to-vehicle communication, and, in particular, where on the spectrum this communication takes place.

Article source: Carew, Diana Gehlhaus, Nicholas Martin, Marjory S. Blumenthal, Philip Armour, and Jesse Lastunen. “The Potential Economic Value of Unlicensed Spectrum in the 5.9 GHz Frequency Band.” Santa Monica, CA: RAND Corporation, 2018.

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