Arlington, Va. — Unlicensed spectrum — the radio spectrum that allows entrepreneurs to harness a communications medium in order to connect people and devices wirelessly — generates $62 billion a year for the U.S. economy, according to a new report from the Consumer Electronics Association (CEA).
The report, “Unlicensed Spectrum and the American Economy,” examines the economic impact of unlicensed spectrum based on a device’s incremental retail sale value, a metric that takes into account only the fraction of the sales price attributable to unlicensed spectrum.
“Unlicensed spectrum is essential to keeping us connected and advancing innovation and tech entrepreneurship in the 21st century,” said Gary Shapiro, president and CEO of CEA. “Everyday devices that run on unlicensed spectrum are all around us — garage door openers, home security systems, baby monitors, all the products we have come to rely on that utilize Wi-Fi, and more. Unlicensed spectrum is the fuel that powers innovation in our increasingly digitized, interconnected and untethered world.”
CEA’s new report estimates that growth of devices relying on unlicensed spectrum is extremely strong. CE devices that rely most heavily on unlicensed spectrum, which include Bluetooth and RF identification-enabled devices, have a cumulative annual growth rate of roughly 30 percent from 2011 to 2016. Consumer demand for products like these is now, in turn, driving the need for even more unlicensed spectrum.
Unlike licensed spectrum, with its significant regulatory oversight and high costs to obtain and build a usable service, unlicensed spectrum offers accessible spectrum to entrepreneurs with fewer resources, which facilitates innovation. Users of unlicensed spectrum do not have to buy the spectrum, and are more easily able to experiment and deploy products with minimal regulatory oversight.
“We’re seeing an explosion of connected devices that rely almost exclusively on unlicensed spectrum — the Internet of Things — proof of the skyrocketing value of unlicensed spectrum,” said Shapiro. “As we continue to use more smart, connected devices, we need enough unlicensed spectrum for them to communicate with their surroundings and one other. With this tool, innovators can harness the power of the network to give devices more utility than they could ever have in isolation.”
The report draws upon sales data from the entire ecosystem of devices that use unlicensed spectrum in order to estimate their impact on the U.S. economy. AM radio broadcasting hardware, automatic vehicle identification systems, industrial, scientific, medical (ISM) devices and many more — beyond the ubiquitous Wi-Fi routers — are accounted for in the report.