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Chairman Julius Genachowski Speech at the GSMA Mobile Asia Congress

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Released: November 23, 2011
REMARKS OF FCC CHAIRMAN JULIUS GENACHOWSKI
AS PREPARED FOR DELIVERY
GSMA MOBILE ASIA CONGRESS
HONG KONG
NOVEMBER 16, 2011
Thank you, Anne Bouverot and GSMA, for inviting me to speak. It’s a pleasure to be at
GSMA’s Mobile Asia Congress.
As this conference makes clear, the world is going mobile. There are roughly four billion
mobile subscribers worldwide with about six billion subscriptions. China alone added
thirty million subscriptions in just the last quarter, and India added another twenty-one
million. Global mobile penetration now tops 80%, and it recently passed 100% in the
U.S.
And increasingly, when we talk about mobile, we’re talking about mobile broadband.
Worldwide, the number of mobile broadband subscribers has increased 45% annually
over the past four years. 30% of handsets sold in the most recent quarter were
smartphones, and the majority of new phones being sold in North America and Western
Europe are now smartphones. As a result, mobile broadband subscriptions are up to 1.2
billion worldwide.
In fact, there are twice as many mobile broadband as fixed broadband subscriptions,
which is not surprising when you consider mobile broadband is often the only way people
can get online in developing countries.
What’s remarkable is that we’re still in the early innings of the mobile revolution.
There’s still a tremendous upside. Less than 20% of the world’s mobile subscribers have
smartphones, so there’s considerable room for more uptake. A study by Ericsson that
came out this month projects the number of mobile broadband subscriptions will
approach five billion by 2015.
And some recent developments are going to put the mobile revolution into overdrive.
Tablets are a game-changer, ushering in what people are calling the post-PC era. Apple
shipped nearly forty million iPads in its first eighteen months. To put that growth into
context, that’s triple the number of iPhones sold in its first eighteen months.
4G is here, which will offer wireless speeds comparable to what we’ve been used to on
wired networks. 150 carriers in sixty countries have 4G deployment commitments, and
within five years, LTE will be available to around 35% of the world’s population.
And the emergence of cloud computing is going to make our mobile devices more
powerful than anyone would have imagined just a few years ago.
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The opportunities of the mobile revolution are huge. With mobile broadband, children
can replace fifty-pound backpacks with interactive digital textbooks that personalize
lessons to their skill set. Mobile broadband can enable remote medical monitoring –
wireless devices that can help diabetes patients track their glucose levels, or help heart
disease patients monitor cardiovascular data.
Each of these areas – education and health care, as well as energy – has enormous
potential to provide new broadband-fueled market opportunities. And as large as these
can be, they can be part of an even larger economic opportunity.
In 2009, people downloaded 300 million mobile apps. Last year, that number increased
more than sixteen times to five billion downloaded mobile apps. By 2015, the “apps
economy” is projected to generate $38 billion in sales. That’s a remarkable figure when
you consider that in 2008, the first app store hadn’t yet opened.
And mobile applications unleash tremendous social benefits. In India, more than 200
million farmers receive government subsidies via their mobile devices. We’ve seen in
Japan, Haiti, and elsewhere how modern communications networks can save lives and
speed relief.
In 2009, mobile online shopping brought in $1.4 billion. Last year, it jumped to nearly $4
billion. In 2011 alone, eBay and Amazon project $6 billion in mobile sales.
The opportunity to use mobile money for billions of unbanked people around the world is
a game changer. And location-based services are another new and growing industry
enabled by mobile broadband. According to McKinsey, location-based services could
enable $600 billion in consumer surplus annually.
With the emergence of machine-to-machine wireless technology, pretty much everything
can become connected – from appliances to vehicles to medical devices.
Qualcomm projects that by 2020, the Internet of Things will consist of fifty billion
connected devices around the world, which will drive efficiencies and improved services
in areas like energy, transportation, manufacturing, and health care.
Add to all this the jobs impact of 4G buildout. A new Deloitte study estimates that
investment in 4G mobile broadband networks in the U.S. alone, which is already
underway, will add up to $151 billion in GDP growth over the next four years, creating
771,000 new jobs.
The bottom line: mobile broadband is being adopted faster than any computing platform
in history, and could surpass all prior platforms in its potential to drive economic growth
and opportunity.
All of us are here to answer the same question: How do we seize the opportunities of
mobile broadband?
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First, we must seek to ensure that everyone has access to robust mobile broadband.
In the U.S., roughly eighteen million Americans live in areas where they simply can’t
access broadband at home, and millions of Americans live, work, and travel in areas
without any mobile broadband coverage. Virtually every country has deployment
challenges, and in many countries the challenges are dramatic. These challenges extend
to both last-mile and middle-mile networks. Altogether, 3G is available to only about
45% of the world’s population.
And somewhat ironically, although wireless presents new solutions for last-mile
connectivity, it exacerbates middle-mile challenges, as much more backhaul is needed to
accommodate growing mobile traffic.
To make sure mobile broadband is universally available, we need to close the
infrastructure deployment gap.
The private sector, which owns and operates the vast majority of our global Internet
infrastructure, will be indispensable to addressing many of these gaps and challenges, as
well as making the massive investments required to deliver robust networks. There’s also
an important but limited role for government to play.
President Obama has provided important leadership – embracing broadband as key to
innovation and economic growth, and setting ambitious goals for 4G wireless
deployment.
Last year the FCC released our National Broadband Plan – a comprehensive, data-driven
strategy to maximize broadband deployment, adoption, and use, and unleash the benefits
of high-speed Internet – wired and wireless.
Since the Plan’s release, we have been busy executing – actively putting the Plan’s
recommendations into action.
We recently took a major step on one of the Plan’s biggest recommendations. The
Commission unanimously approved a once-in-a-generation overhaul of our principal
universal service program and our intercarrier compensation system. This action will
transform legacy 20th century telephone programs into a 21st century broadband
infrastructure program – the Connect America Fund – which reaffirms America’s
universal service commitment for the digital age.
Over the next decade, the Connect America Fund will use targeted, accountable public-
private partnerships to help extend broadband infrastructure to the approximately
eighteen million Americans who currently live in areas without access to high-speed
Internet.
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Reflecting the growing importance of mobile broadband, we established for the first time
a Mobility Fund that will expand 4G mobile broadband to tens of thousands of road
miles, where millions of people work, live, and travel, including dedicated support for
Tribal areas.
And for the first time in the history of America’s Universal Service Fund, we’ll be using
market-based mechanisms to distribute funding. The Mobility Fund will use a reverse
auction, in which providers seeking to serve different areas of the country compete
against one another other to cover the most unserved road miles at the lowest cost to the
Fund.
The Commission has also made it a priority to remove barriers to broadband
infrastructure deployment. The costs of obtaining permits and access to pole attachments
and rights-of-way can amount to a significant portion of the cost of fiber-optic
deployment. Last year, we adopted a shot clock to speed local review of tower and
antenna applications.
Earlier this year, we streamlined the process and substantially reduced the cost of
attaching wired and wireless equipment to utility poles. And we adopted an order in
August of this year to remove barriers to use of spectrum for wireless backhaul, which
will help accelerate the deployment of 4G networks across the country, particularly in
rural areas.
This is the blood-and-guts work that is moving private investment from the sidelines to
the streets, and enabling companies to put people to work – and to do so by building out
our broadband infrastructure, which in turn drives more economic growth and job
creation.
The next priority in seizing the opportunities of mobile broadband is ensuring that mobile
broadband is ubiquitous and robust. To do that, we need to tend to not only our physical
infrastructure, but also our invisible infrastructure – spectrum.
Demand for spectrum is rapidly outstripping supply, and that demand will only increase.
Smartphones now outsell PCs, and compared to old feature phones, they place twenty-
four times the demand on spectrum. For tablets, it’s more than 120 times as much.
We need to tackle the looming spectrum crunch by dramatically increasing the new
spectrum available for mobile broadband, and the efficiency of its use.
In the United States, we have a mandate from President Obama to allocate 500 MHz of
additional spectrum for mobile broadband by 2020.
To unleash more spectrum for mobile broadband, we have worked with our Congress to
lay the groundwork for an innovative policy proposal – voluntary incentive auctions for
spectrum.
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Under this proposal, Congress would give the FCC the authority to run two-sided
spectrum auctions. We would auction spectrum for flexible wireless broadband services,
and the spectrum in the auction would be voluntarily contributed by current licensees like
TV broadcasters or mobile satellite operators, who would in return receive a portion of
the proceeds of the auction.
These auctions provide an incentive-based, market-driven path to move spectrum to its
highest-valued use, bringing market forces to bear on spectrum licenses that have been
shielded from competitive dynamics for decades. As spectrum exhaust becomes a larger
issue worldwide, we anticipate that incentive auctions can become a key element of
policymakers’ toolkits in many countries.
We must also prioritize and set concrete global targets for the allocation of additional
globally harmonized spectrum for mobile broadband.
Therefore, the upcoming ITU World Radiocommunication Conference should ensure that
there is a conference agenda item for mobile broadband at WRC-15, and between these
two world conferences the mobile industry should work with governments to find
additional spectrum to alleviate the upcoming spectrum crunch. We believe this would
best be achieved in a Joint Task Group at the ITU-R.
At the same time, we must have the foresight to remain committed to making more
spectrum available on a global basis for unlicensed use. Unlicensed spectrum fosters the
kind of experimentation that leads to vitally important mobile innovations such as WiFi,
cordless phones, and Bluetooth.
In the U.S., we have released the largest amount of spectrum devoted to unlicensed use in
twenty-five years. We expect this to lead to services like "Super WiFi" and to spur
experimentation with new, innovative technologies and services.
In addition to unleashing spectrum and spurring deployment of mobile broadband
infrastructure, we also need to ensure the free flow of data across borders.
Earlier I mentioned that the emergence of cloud computing creates enormous
opportunities for mobile. The free flow of data across national borders is essential to
unlock the great promise of both mobile computing and cloud computing, a nascent,
global industry of around $68 billion. Imagine where this industry will be in just two
years, much less five or ten.
I spent the past few days in Beijing, meeting with government officials and business
leaders, and the future of the cloud and the importance of an Internet without borders
were key topics of discussion. I emphasized the importance of increased market access,
greater Internet freedom, and stronger intellectual property protections. I believe these are
win-wins for both China and the U.S., promoting economic growth and innovation in
both our countries.
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We’re at a key moment when it comes to the future of the mobile Internet.
Working together, we can harness the power of mobile broadband to promote economic
growth, job creation and broad opportunity.
Working together, we can drive improvements in education, savings in health care costs,
and greater energy efficiency.
Working together, we can make sure that mobile helps with disaster response and
recovery all over the world, as we’ve seen in Japan and Haiti; and that mobile promotes
freedom and opportunity around the globe, as we’ve seen so dramatically in the Middle
East and North Africa.
Working together, we can unleash the full potential of mobile broadband and build a
brighter future for billions of people around the world.
Thank you.
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