The Economic Impacts of Reallocating Spectrum to 5G
White Paper, April 2019
The Federal Communications Commission (FCC) is considering making additional spectrum available for next-generation 5G wireless networks. 5G will enable improvements in data speed, service quality, and network capacity because it is designed to exploit not only low-band spectrum, which historically has been used for mobile voice and data services, but also mid- and high-band spectrum. Consequently, to achieve the anticipated increases delivered by 5G, service providers will need to invest in building out new infrastructure for each band.
An Analysis Group team, including Principal David Sosa, Vice President Greg Rafert, and Analyst Ethan Brodeur, researched the economic impacts from making low-, mid-, and high-band spectrum available for 5G services. They grouped 5G infrastructure-related capital spending into four industry categories (wireless communications equipment, construction, wireline communications equipment, and wire and cable), and modeled the impact on US GDP and jobs creation.
Based on estimates of nearly $220 billion in new capital expenditures, the team concluded that deploying infrastructure for all three bands of spectrum would add $391 billion in GDP to the US economy and create 1.9 million job-years. Approximately 70 percent of the GDP and jobs impact is attributable to deployment of mid-band spectrum. Another 19% is traceable to deployment of high-band spectrum intended for dense metropolitan areas, with the remaining 11% coming from deployment of low-band spectrum required for nationwide rural coverage.
The research, which is published in separate reports for each band of spectrum, received financial support from CTIA, a trade association representing the US wireless communications industry.