If you’re wondering why economist Austan Goolsbee is pitching Obama’s plan to auction off airwaves and invest federal dollars in 4G wireless, beyond the vague promise of jobs, let’s take a look at what 4G could do and why it’s so slow in coming.
The good news is the next generation of wireless networks, called 4G, will be 50 times as fast as the pokey connection you now have on your iPhone or Droid smartphone. The bad news is without a big push, that true speed increase may take 15 years to get here.
The future is complicated. In the U.S. we’re now riding 3G, a cell system that moves information to your phone at about 2 megabits per second. (Quick refresher, class: A bit is the smallest unit of digital data, the on-off 1-or-0 of computer storage, with 8 bits adding up to 1 byte. Consumers are more familiar with bytes since those are the standard metric for computer hard drives, but data-transfer geeks talk in bits — same idea, just one-eighth the size.) The speedy broadband connection on your office computer sends data at about 4 to 5 megabits per second. So imagine what the world will be like when 4G arrives at 100 megabits per second — your phone and tablet will become lightning fast.
The implications are enormous. 4G speed would make two-way high-definition video calls seamless. You could download an entire HD film in three minutes. The superb video capabilities could crush the cable industry, as tablet holders pull down HD clips on demand anywhere, anytime. And 4G has a nice feature 3G doesn’t — seamless handoffs in data transfer as you leave one cell (wireless station zone) for another, meaning the Internet connection will really be always on, avoiding the hiccupy black holes you find, say, on the Amtrak Acela route from New York to DC.
If 4G pushes HD on-demand video everywhere, advertising is likely to be shaken to its core, as cable fades and mobile tablets rise. The revolutions in wireless will inspire thousands of new business models, which is why Goolsbee and Obama promise future jobs will blossom under 4G’s light.
That’s the dream, but now the nightmare. 4G won’t arrive anytime soon, despite the fact Sprint is pitching its current enhanced 3G network as 4G and Apple and Verizon promise to roll theirs out in the next two years. It’s not the carriers’ fault. True 4G coverage requires building about 10,000 cell sites that cost hundreds of thousands of dollars a pop; CNN reports the whopping $8 billion price tag will add 30% to carrier operating costs, and it’s unlikely AT&T, Verizon and the others can swallow that all at once. Even if they build out aggressively, they have to maintain all the 3G service we now expect for the current generation of iPhones. Duplication and redundancy will brake our evolution to the always-on wireless Internet future.
This is likely why today’s first “4G” branded networks from Verizon, T-Mobile and Sprint don’t come near the speed of true 4G.
Compounding the slow rollout is the fact new devices will quickly compete for the new bandwidth, creating traffic jams as 4G scales just as new highways paradoxically attract more cars. AT&T ran afoul of this very problem when it launched the iPhone; data traffic jumped 5,000% within a few years, and the company’s reward for being the first Apple phone carrier was a bad rep for spotty coverage and dropped calls.
Mobile can unlock economic potential. In today’s comparatively glacial 3G app economy, Goolsbee notes, “I understand there are even two kid millionaires in Finland selling games about angry birds.” Future million-dollar 4G business ideas are waiting, but without a push, it may be today’s 6th graders who get them.