With all the celebratory buzz at this year's Consumer Electronics Show in Las Vegas, leave it to the government to be a buzz kill.
As wireless carriers and manufacturers reveled in their lineup of data-hungry phones, hotspots and tablets, the chairman of the Federal Communications Commission, Julius Genachowski, sounded a stark warning bell about a problem with no quick solutions.
"We need to address the looming spectrum crunch, and we need to ensure the availability of unlicensed spectrum as a platform for American innovation," he said.
Unless Congress acts soon to enable broadcasters to auction their licensed spectrum to wireless carriers, the carriers won't be able to meet demand.
"The incentive auction needs to become law now," Genachowski said. "We're going to get swamped by an ocean of demand."
Expanding spectrum is a priority for carriers, and was a key component of AT&T's failed bid to acquire T-Mobile. The added customer base, which concerned regulators about a monopoly, was small potatoes compared with the acquired spectrum the No. 2 carrier would have gained to support its fast-growing network. In December 2010, the carrier agreed to pay $1.925 billion to chip-maker Qualcomm to buy spectrum licenses in the lower 700-megahertz band.
Its top rival, Verizon Wireless, recently plunked down $3.6 billion to buy spectrum from Time Warner Cable, Comcast and Bright House Networks, and made a separate deal to buy 20 megahertz of Advanced Wireless Services spectrum licenses from Cox Communications.
Genachowski's remarks were similar to those he made at the previous two CES shows since he has been in office. He called the looming crunch ""the dark cloud around the silver lining" that could kill jobs and stifle innovation.
But he said it was important to focus on the right solution.
"Getting it right is as important as getting it done," he said, according to an FCC transcript of the speech. "In fact, doing it wrong would undermine the reasons to adopt incentive auction legislation in the first place.
"There is broad bipartisan agreement that we need incentive auctions, and the Senate Commerce Committee passed bipartisan legislation giving the FCC incentive auction authority on a 21 to 4 vote."
'I Told You So'
Charles King, principal analyst at Pund-IT, said the spectrum crunch will continue to worsen as consumers, businesses and carriers migrate toward high-bandwidth mobile devices. But he said reluctant spectrum holders and a polarized Congress are the flies in the ointment.
"While Genachowski might be faulted for crying wolf, his hands seem essentially tied so far as pursuing possible solutions," King said. "Spectrum owners like traditional broadcasters seem unlikely to freely give up unused spectrum without a fight, and the situation in Congress is so poisonous that a political compromise seems unlikely."
In such a climate, he said, "Genachowski's only option may be to assume a position that will allow him to say, 'I told you so!' At some future date."