Google is trying to save you from those nasty data overages with a new plan to free up about 150 Mhz of the 3.5GHz spectrum. The plan would let companies create fast networks from as small as the size of a park and let people use it without a license much like technologies such as WiFi, bluetooth or garage door openers. The proposal leaves open room for governmental use for technology such as radar and a second tier for companies who want to have exclusive networks in certain geographic locations. A third tier is where consumers would be able to use the spectrum unlicensed. In a situation where multiple companies want to compete for the spectrum, an auction would take place, much like is currently done between big carriers, and the proceeds would go to the government.
A plan like this makes perfect sense for a company like Google or really any company that depends on users seeing advertising they deliver. The more people use services like YouTube or Gmail, the more ads are delivered, the more money is made but people are shying away from downloading music and watching videos due to high data overage charges. According to Bureau of Labor statics, families spend 50% nore on cell phone bills in 2013 than in 2007. The current average for a Verizon customer is up to $161 in the fourth quarter.
This plan would also be great for start ups. Spectrum is so expensive right now (a current auction is expected to raise upwards of $45 billion) that small companies and start ups can’t compete. The fewer amount of companies able to compete means less innovation. This leads to companies that are happy to sit on their profits instead of innovating, buying up spectrum and pricing out newer and cash poor companies.
It’s a vicious cycle that costs the consumers in the end. The rise in smaller, regional carriers and the disruptive pricing policies from T-Mobile have already shaken up the wireless industry. AT&T, Verizon and Sprint have had to change pricing models and offer more for your dollar to compete. Another great example of this is Google Fiber shaking up the home television and internet market.
While this all seems great, there are some significant downsides. The government already uses some of this spectrum for Radar and they want large areas on the east and west coast of the country, where 60% of the population lives, to be excluded as to not interfere. Google has apparently thought through this though because they’ve proposed a 3 tier system where the top tier goes to the Navy for radar, the second tier will go to companies and the third tier will be able to used unlicensed. Also, no current devices would be able to use this spectrum. Carriers would need to lead the way on this as OEMs aren’t going to order chips that support this if it will go unused.
Another significant disadvantage is that the 3.5GHz band doesn’t penetrate buildings well. Bands that penetrate buildings are in high demand for wireless carriers to provide better service to an ever expanding and competitive industry. While this is definitely a downside, Cisco Systems Inc. said that 93% of mobile data consumed was via WiFi in 2013. Widespread WiFi would definitely help ease some of the pain of a weak penetrating band especially with the rise of technologies like WiFi calling and data based messaging like iMessage.
Time will tell if Google will be successful in saving us from data overages but the future is bright for not only the consumer but for emerging technology companies. Everyone, except maybe carriers, will benefit from a plan like this so it’s hard to see why anyone, outside of Manhattan, Dallas, Overland Park or Bellevue would want to stand in the way of this if it can be responsibly deployed and managed. A traffic cop will have to be in place and Google has as yet volunteered to be that cop but it does already have a similar system in place to negotiate the small amount of spectrum that sits between TV channels.