The bipartisan Middle Class Tax Relief and Job Creation Act of 2012 was approved in Congress by both houses, and is intended to use the revenues to fill in several billion dollars to the country’s budget deficit.
“As the demand for mobile devices, such as smartphones and tablets, increases, so does the demand for more wireless broadband. The legislation frees additional airwaves to fulfill this demand, spurs innovation and economic investment, and will create potentially hundreds of thousands of much-needed jobs,” said Debbee Keller, press secretary for the U.S. House Committee on Energy and Commerce.
Popular devices like the iPhone and Android have brought in a flood of new customers to major service providers like Verizon and AT&T, increasing broadband traffic and causing 3G and 4G networks to lose connection speed.
However, it remains to be seen whether major bidders will pass on costs of obtaining new spectrum for their customers.
“You can bet on that. It seems like a no-brainer to me,” said Mona Lee, president of Mona Lee and Associates, a consulting firm that helps businesses with FCC policies.
With millions of new customers, and as people are using GPS-based apps and downloading larger media files, the communications grid has become colluded with too many customers using too much mobile bandwidth.
Recently, Internet and data connectivity for cellphone customers has become slower rather than faster, even though prices have gone up.
Aside from the convenience of smooth connectivity for customers, Congress hopes to give public safety departments a wider spectrum for communications in case of a widespread emergency.
Problems arose during major events of the past several years when communication grids froze during disasters such as 9/11, Hurricane Katrina and the tornadoes in the Midwest.
Cellphone towers that were either too busy or destroyed made it difficult for emergency services to communicate with one another. Also, many emergency responders have experienced blackouts in transmissions during these kinds of catastrophic events.
In the sector she represents, Lee said a case must be made for public safety to preserve some spectrum for some of the crucial areas of infrastructure that could be compromised in case of an emergency.
“They’re constantly working on making the spectrum more efficient. My clients are generally critical infrastructure clients — oil and gas, utilities, pipelines that are critical infrastructure. And at times we worry that the demand for more frequency for cellphones is going to damage the communications that critical infrastructure depends on to make business work,” Lee said.
Richard Mendez, 23, a Verizon customer, said consumers don’t need to subscribe to 4G services because Internet connections are now very abundant.
“Everyone that has one of these supposed smartphones are offended by this nonsense, including me, because I have one,” said Mendez. “This is B.S. Smartphones are supposed to be fast, according to their commercials.”
Lee said in the past, when companies decided that they didn’t need certain megahertz of airwaves on the radio spectrum, they would agree to turn over access to the airwaves. Today, the FCC is looking at ways to monetize this old practice.
“Congress saw this as an opportunity to generate money,” Lee said.
Members from both the House and Senate agreed late February that broadband airwaves should be auctioned off to cover federal benefits.
Many new auctions regarding these airwaves have yet to take place. How much these companies are willing to spend is still a matter of speculation, but the subsequent billing methods of these cellphone companies are expected to keep fluctuating.
“Yes, the incentive auctions are new,” said Keller. “We do not have a detailed breakdown, but CBO (Congressional Budget Office) estimates the auction will generate approximately $26 billion. After providing funds for public safety and a few other expenses, approximately $16 billion will be available to pay for the other provisions in HR 3630.”
Brandon Rich, 27, an AT&T customer, said he expects his data to continue to slow down until AT&T raises its prices.
“I’m pretty sure they’re going to come out with something … They’re going to come out with a new data plan that they’re going to ask you to pay more for it,” said Rich. “I’ve had AT&T for a while, and I’ve noticed when you’re using the Internet on the phone, it’s getting more laggy.”