Daily Dose of iQ: 'Spectrum Crunch' - U.S. Phone Traffic Nears Wireless Network Limits

CNNMoney Tech reported today that the time for wireless reckoning has arrived in the U.S.

"The U.S. mobile phone industry is running out of the airwaves necessary to provide voice, text and Internet services to its customers," wrote David Goldman earlier today.

"The problem, known as the 'spectrum crunch,' threatens to increase the number of dropped calls, slow down data speeds and raise customers' prices."

To solve the Spectrum Crunch, what must happen?

As wireless devices continue to demand more and more data, spectrum solutions are likely to come from short-range options to provide data and alleviate load on longer range alternatives. Cable and Internet companies are actually well positioned to fill this need either directly or indirectly, as they have large copper and fiber optic networks in densely populated areas where this is an issue. 

Imagine a Wi-Fi hotspot by every cable drop. Cable and Internet providers could exercise this directly by offering service themselves and indirectly by offering leased network access to cellular providers.

Increasingly, people are already partially handling this handoff at home and work as they connect their smartphones to the Wi-Fi in those locations.

Imagine if that network extended everywhere you went. Now imagine that you could make and receive calls on that Wi-Fi network without having to use the cellular network (see Rogers' One Number). In some respects, carriers can also rely on customers' existing network if they allow for calling over any Internet connections -- although quality may become an issue when the are not able to manage the endpoint.

Had the AT&T/T-Mobile USA merger gone through, it would have alleviated some of the pressure on existing networks.

The proposed merger between AT&T and T-Mobile would have created a better combined network with the ability to give users better speed and coverage in the long term.

Deutsche Telekom does not seem to want the U.S. subsidiary and as a result, T-Mobile USA will likely still be looking to either sell off or make agreements for its network usage.

The onus appears to be on the carriers to improve networks, as capping consumers data usage does not seem feasible. Other countries have managed to meet consumers’ data and network needs. Using Wi-Fi as a technology for delivering phone service could help to alleviate Spectrum Crunch along with partnering with cable and Internet providers to expand network reach beyond the cell tower.

One of the issues in the U.S. is that, combined with their high network usage, they also have many competing networks. Other countries have solved this issue through implementing single, shared networks which give the consumer ubiquitous coverage, regardless of the carrier.

This solution is typically better for the consumer in that they are not choosing based on network and they should get better overall service.

This is also better for the carriers as they do not need to maintain their own network and there is not duplication of network hardware for reasons other than redundancy in order to mitigate failure.

Examples of this trend are present in Canada, with agreements between two of the largest carriers (Bell and Telus) deciding to partner and share network space on their new networks.