Netflix, Ultra HD, and Broadband… Why New Technologies Show Need for More Spectrum and Less Government

Netflix HQ in Los Gatos, CA (courtesy Wikimedia Commons)

In a recent piece for the Washington Post, Brian Fung posited a question to his readers regarding new technology and whether America had the wherewithal to keep up. The article titled “Netflix is shooting ‘House of Cards’ in ultra HD. Can America’s broadband networks keep up?” focused on the hit online show shot in Maryland (and subsidized by Maryland taxpayers) centered around the political machinations of a ruthless and unscrupulous elected official played by actor Kevin Spacey. Fung wondered aloud if the current broadband that Americans by large utilized would be sufficient enough to keep up with and fully realize the new way in which the show was going to filmed:

When “House of Cards’s” second season kicks off on Netflix next month, sharp-eyed viewers with next-generation TVs might notice a big difference in picture quality… That’s because the show is being shot and produced entirely in a new level of resolution called ultra high-definition, or 4K — a reference to the nearly 4,000 pixels that’ll be packed horizontally into the picture… To stream all those extra pixels, you’re going to need a pretty fast Internet connection: about 15 Mbps. For Hastings, this sounds like no big deal… “This is very practical,” he said. “You can stream 4K over Wi-Fi if you want to.”… Technically, you can stream anything so long as you’ve got a wide enough pipe. And sure, the fact that ultra HD can be compressed into a 15 Mbps stream is impressive in itself… But 15 Mbps is still a pretty hefty load in a country where the average connection speed still lags at 8.7 Mbps. What Netflix thinks is a reasonable hit to bandwidth would be enough to overwhelm the subscriptions of many Americans. Verizon’s DSL offerings, for instance, max out at 15 Mbps. Comcast’s Xfinity triple-play package starts out with a 25 Mbps connection. And those are just advertised speeds; your mileage may vary depending on the time of day and the load on the network.

The wrong question is being asked at the right time. There’s no doubt the world has seen rapid advancements in technology and one need only walk down the street to see people using smart phones equipped with Internet access. However, the question isn’t whether Americans can keep up with the advancing technologies; it‘s whether or not the government will stop acting as a roadblock to utilizing those advanced technologies to their full capabilities. Netflix subscribers and Americans nationwide who use the Internet everyday on their laptop, smart phone, and/or tablet depend on the wireless spectrum that provides the frequency that makes the network available. Right now, per their own estimates, the government is sitting on 60% of the best wireless spectrum available and there is a simple way for all of us to benefit: RELEASE MORE!

There are many reasons why releasing more spectrum would be advantageous for consumers, taxpayers, and businesses. A transfer of spectrum licenses will lead to increased product and open doors to allow for more competition. This in turn means that the needs of customers are better met with freedom to choose a company that best fits what they’re looking for in a provider. Companies are then forced to compete with each other in order to secure business, and that leads to a big win for consumers who will get best service at the best price.

Companies are investing billions of dollars per year in faster internet speeds. For example, between 1996 and 2011, U.S. Broadband providers invested nearly $1.2 trillion in broadband networks. And, companies are using that money to invest in faster Internet conenctions.  For example, Comcast’s fastest home tier is now 31 times faster than it was in 2007 and as Comcast rolls out their next generation high speed internet product, DOCSIS 3.1, consumers will see speeds well in excess of 1 Gbps.

Similarly, as previous spectrum transfers and auctions have demonstrated, the resulting increase in competition in the market provides consumers with a greater number of choices in and expands access to affordable services. The ability enjoy newer technologies is yet another reason that the FCC should act swiftly and free up more wireless spectrum and give broadband users a greater ability to enjoy their favorite movies and shows in clear color and sharper image.

There are many factors that are left to be determined for the repurposing of spectrum and how much the taxpayers can make through incentive auctions could be as much as $20 billion. Recently confirmed FCC Chairman Tom Wheeler spoke to TV broadcasting execs in Silicon Valley last week about wireless spectrum and pitched them on the coming incentive auction, which was unfortunately delayed to mid-2015:

“I cannot remember a point in history when it has been simpler, safer or more profitable for an incumbent service provider to take advantage of new technology,” Wheeler said, according to his prepared remarks. “Typically, new technology plows under the old business models; in this case, however, the FCC is overseeing a once-in-a-lifetime opportunity for profitable repurposing of an important business activity.”

Freeing up more spectrum, as the FCC did last year, would provide better quality and more access to the broadband networks that make shows like “House of Cards” possible and viewing it on HD would be easier. The government should act responsibly and release more of the spectrum they are hoarding, while ensuring they keep enough to have ready in case of a national or statewide emergency where that extra spectrum may be needed.

High speed broadband adoption is a classic case of how the free market is driving innovation and faster internet speeds.  Without market forces driving them, governments are inefficient and slow to adopt new technologies.  The question should not be how much money the government can spend, it should be what can the government do to foster more growth through the private sector with fewer regulations and roadblocks.