C&B Notes

Running on a Treadmill

5G spectrum auctions in Britain remind us why the wireless communications business looks like the textile industry in which Berkshire Hathaway participated — a never ending stream of forced capital expenditures leave the producers in the same competitive position while virtually all of the benefits accrue to the consumer.

Just weeks after the end of the long delayed auction of 4G spectrum, British policy makers are already turning to plans for the next generation of superfast mobile broadband that will be called, inevitably, 5G.  Ofcom, the communications regulator, will this week launch an industry consultation about freeing radio frequencies for 5G internet services many times the speed and capacity of today’s best 4G networks.  The early start to 5G planning signals determination by policy makers and industry to avoid the delays that have seen the UK fall behind many other developed countries in rolling out 4G services.  It also reflects fears of a future capacity crunch in the airwaves as rapidly growing usage of mobile broadband devices, such as smartphones and tablet computers, increases pressure on networks.

Steve Unger, chief technology officer for Ofcom, says:  “There are three ways to meet the demand for more data — more spectrum, better use of spectrum and more cell sites.  We need to progress on all three fronts, which is in effect what we mean by 5G, to meet the 80-fold increase in data usage we predict by 2030.  “We expect 5G will be about making mobile data ubiquitous — you won’t lose reception, or worry that your service will be too slow.  It will always be there, always reliable, to the extent that it will become a fixed line substitute.”