A Strategy That Recognizes the Role of Wireless Innovation

Earlier this year, the Obama Administration released an updated Strategy for American Innovation which seeks to promote innovation-based growth that will “bring greater income, higher quality jobs and improved health and quality of life to all U.S. citizens.” We at CTIA were pleased – but certainly not surprised – to see that the Strategy prominently highlighted the importance of the wireless industry for American consumers and the U.S. economy. The Strategy gets it right on the mark when it states that “[t]he wireless revolution provides great promise for America’s future prosperity” and concludes that more spectrum is needed to maintain our global technology leadership.

So, when the U.S. Department of Commerce sought comment on the Strategy, we thought it was important to weigh in. In our comments, filed today, we documented the essential role that the wireless industry plays in developing new services, capabilities, products and applications.  The continued success of the mobile wireless industry – as a direct contributor to the U.S. economy and as an indirect input into businesses of all sizes – represents one of the crowning accomplishments of U.S. communications policy.  It is nice to see that recognized.

We also highlight the benefits of the wireless “virtuous cycle,” through which wireless providers use spectrum to build out powerful networks; operating system developers, applications developers and device manufacturers create new and innovative products and services to market; all of which generates consumer demand and in turn drives greater investment and innovation. Our comments also detail the significant positive impact that the wireless ecosystem is having on the U.S. economy, including:

• The wireless industry economic contributions have grown five times faster than the overall economy in the last decade.
• The average job pays 50 percent more than the national average of other production workers.
• In the past twenty years, wireless carriers have made enormous investments in their networks, committing more than $310 billion in cumulative capital expenditures, with reported investment of more than $24.9 billion in 2010.
• Industry estimates show hundreds of billions of dollars in productivity gains for U.S. businesses, with businesses generally expecting a 15 percent improvement to their bottom line from their adoption of mobile wireless services.

We also discuss many of the societal benefits that the wireless virtuous cycle produces. We provide a host of examples of wireless industry contributions to innovation in areas such as:

• energy efficiency
• education
• healthcare
• manufacturing
• the environment
• entrepreneurship

These are exciting initiatives with benefits that go beyond the typical consumer experience. Indeed, they unquestionably deliver important benefits to society as a whole.  They also show how wireless can revolutionize almost any industry.

Perhaps most importantly, our comments focus on the critical need for additional spectrum to continue the growth and development of the wireless ecosystem. CTIA applauds the Administration, Congress and the FCC for their commitment to repurposing 500 MHz of spectrum for wireless broadband. The exponential growth in demand for wireless services is well documented. To meet that demand, CTIA supports the Administration’s proposal to repurpose both federal and non-federal spectrum for commercial mobile broadband use. We’ve also been big supporters to the Administration’s proposal to reclaim unused and underused spectrum from television broadcasters. As we’ve shown in prior filings, using incentive auctions to free up this spectrum is a “win-win” approach that will jumpstart innovation across the wireless ecosystem and throughout the economy.

Finally, CTIA addressed some additional steps that can be taken to promote continued innovation. These include promoting regulatory certainty and ensuring tax fairness. While it may seem like Mom and apple pie, these policies have a real impact in the wireless space. Continuing spectrum policies based on the exclusive- and flexible-use licensing model is key to driving innovation and investment. Exclusive- and flexible-use licenses are critical to ensuring the stability that licensees need to continue to invest in infrastructure and continually meet the demands of a dynamic, evolving marketplace.

As for tax fairness, the average wireless consumer is charged more than 16 percent in taxes and fees when other taxable goods and services are charged only 7.4 percent.  This makes no sense and imposes a drag on wireless subscribership and usage, and ultimately on investment. Prohibiting such taxes would prevent further burdens on wireless customers. That’s why CTIA supports the Wireless Tax Fairness Act of 2011, which would put a 5-year freeze on new discriminatory taxes and fees, while giving state and local governments time to reform their existing tax systems.

Today, CTIA let the Department of Commerce know that the wireless industry is leading the charge in American innovation. We also reminded them that we will need more spectrum as well as fair regulatory treatment to keep the wireless engine in high gear. We want to keep investing, which will spur further innovation, create more jobs and increase productivity.

Now that’s a strategy everyone should be able to get behind.