There is an invisible thread that keeps our Wi-Fi running, our Bluetooth connections buzzing and our instant messages flying. These operations are now such staples of our everyday lives that few of us bother to consider how the devices actually work. But that common thread – radio frequency that is known as “unlicensed spectrum” – plays a critical role in keeping us connected and advancing innovation and tech entrepreneurship in the 21st century.
The exponential growth in electronics that rely on unlicensed spectrum has changed the way we live, work and play. The Federal Communications Commission makes spectrum available either on a licensed or unlicensed basis. Unlicensed spectrum is an affordable alternative to licensed spectrum – such as what broadcasters use to transmit their signals – fostering connectivity and facilitating innovation. Any innovator or consumer can use unlicensed spectrum simply by following well-known rules.
This week the Consumer Electronics Association (CEA)® released a report, Unlicensed Spectrum and the American Economy, examining the economic impact of unlicensed spectrum on the American economy. CEA estimates that unlicensed spectrum generates $62 billion per year in incremental retail sales value – the value of a device attributable to unlicensed spectrum. More, sales of devices that rely on unlicensed spectrum are on the rise. Just those CE products that rely most heavily on unlicensed spectrum – including Bluetooth and radio frequency identification-enabled devices – have a cumulative annual growth rate of roughly 30 percent.
Consumer demand for smartphones and tablets is now driving demand for even more unlicensed spectrum. According to a Pew Research report, the number of American adults who owned smartphone devices in 2013 nearly doubled in just two years, growing from 35 percent to 56 percent. And ownership of tablet computers more than quadrupled from 2011 to 2013, skyrocketing from eight percent to 34 percent. The exponential growth of these products is powerful evidence that we need unlicensed spectrum to fuel innovation. Without it, these devices either would not exist or have significantly diminished capabilities.
Unlicensed spectrum gives innovators an invaluable tool: low-cost access to the airwaves. With this tool, innovators can harness the power of the network to give devices more utility than they could ever have in isolation. As the 2014 International CES® demonstrated, new waves of connected devices rely almost exclusively on unlicensed spectrum. For example, the WeMo Insight Switch by Belkin sends notifications to your smart device showing how much energy your electronics are using. It allows you to turn devices on or off remotely, or it can give you a head start on dinner by pre-heating the crockpot while you’re sitting in rush-hour traffic. And August’s Smart Lock lets you access your home through your smartphone. The smart lock on the door recognizes your smartphone as you approach your home, verifies your access credentials, and unlocks the door for you without the need for physical keys. None of this would be possible without unlicensed spectrum.
Unlicensed spectrum is an indispensable tool for tech entrepreneurs, innovators and consumers. The value of this spectrum will only grow as the Internet of Things gains momentum and more of our everyday devices get connected.
So the next time you listen to your newborn sleeping in the nursery over a baby monitor or hit the clicker in your car to open the garage door during a downpour, remember that these commonplace activities would be impossible without unlicensed spectrum. This is the fuel that powers innovation in our increasingly digitized, interconnected and untethered world.
Shapiro is president and CEO of the Consumer Electronics Association (CEA)®, the U.S. trade association representing more than 2,000 consumer electronics companies, and author of the New York Times best-selling books, Ninja Innovation: The Ten Killer Strategies of the World's Most Successful Businesses and The Comeback: How Innovation Will Restore the American Dream. His views are his own. Connect with him on Twitter: @GaryShapiro.