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On Communications

Senator Doug Whitsett
R- Klamath Falls, District 28

Phone: 503-986-1728 900 Court St. NE, S-303, Salem, Oregon 97301
Email: sen.dougwhitsett@state.or.us
Website: http://www.leg.state.or.us/whitsett
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E-Newsletter 10/17/11

Last week I participate in the Wireless University Communications Policy Summit held in San Diego.

The University was attended by more than sixty legislators representing thirty-six states.

The seminar was hosted by, and partially paid for by, the non-profit National Conference of State Legislatures.

The remainder of the cost of attending the three-day University was paid by the legislators who participated in the conference.

For me, the most important take-away issues are the immense size and the incredible growth of the wireless industry in the United States.

The number of jobs that the industry is creating makes it a major job growth industry.

Also of concern is the potential number of jobs that are being placed in jeopardy by that wireless revolution.

The cumulative wireless capital spending in the United States totals nearly $325 billion since 1995.

Even during the current recession, the three largest telecommunications companies invested more than $40 Billion in total private capital spending last year.

No other major industry even approaches their rate of domestic private capital investment.

In comparison, Wal-Mart, Exxon Mobile and Chevron combined invested about $23 billion in domestic capital expenditures during 2010.

The growth of the wireless industry is virtually exponential.

Wireless data traffic more than doubled between 2009 and 2010.

Research estimates that wireless traffic will reach thirty-five times the 2009 volume by 2014.

By 2015 the total increase in wireless traffic is estimated to be fifty six times the 2009 volume, when current and new applications are combined.

Even that astounding rate of growth may be underestimated, because no one really knows the number, and kinds of new applications that may be developed during those four short years.

The major limiting factor appears to be the capacity of the wireless highway that is the electromagnetic spectrum.

Currently, only about nine percent of the spectrum is used by wireless telecommunications.

Another thirty percent is licensed to broadcast radio and television.

The remaining sixty one percent is retained for government use.

Rapidly developing technology is continuing to improve the efficient use of the electromagnetic spectrum.

That technology focuses on more precise division and separation of signals.

For instance, digitalization of the signal allows more entities to successfully use narrow frequency bands without interference.

A second limiting factor is how well our federal and state governments regulate the availability and the usage of the electromagnetic spectrum.

In my opinion, it is unfortunately that governments are viewing the spectrum as a major potential source of revenue.

The federal government is already auctioning off available spectrum for literally billions of dollars to the highest bidder.

Governments at all levels are collecting taxes and usage fees for all forms of wireless communications.

Of course, all those taxes and fees, levied on the wireless carriers, will be passed through for their wireless customers to pay in the same manner that all taxes on businesses must be passed on to their consumers.

Those taxes and fees have reached an average of sixteen percent of the consumersí monthly bill.

This is at the same time that actual wireless usage fees are declining due to competitive marketing.

The rapid development of e-commerce is changing how products are marketed and purchased.

Mobile access to products is immediate, convenient, and cost effective.

For instance, consider how wireless technology has changed how we purchase books, music and newspapers.

Ninety three percent of all U.S. businesses are currently using some form of social networking to market their products.

The amount of retail shopping, as well as the amount of product purchased on line, is increasing at near exponential levels.

Financial institutions are rapidly going paperless.

ATMís are ubiquitous.

Debit cards are electronically replacing checks and credit cards.

Many large retailers now return our checks at the retail counter after they have used them like a debit card to access our bank accounts.

In fact, many "smart phones" now can serve as an electronic wallet, with check book, credit card and electronic identification.

The possible applications for digital education are limitless.

Information is now at the fingertips of virtually anyone with a hand held wireless device.

The appropriate application of digital wireless technology is capable of reversing the decline in our education systems.

In fact, many skilled teachers are already using wireless technology to bring myriad educational opportunities to their classrooms.

On the positive side, the wireless industry currently employs about two million four hundred thousand Americans either directly or indirectly.

They expect to add another two hundred thousand employees by 2015.

On the potentially negative side, the application of wireless technology is eliminating the need for many employees such as in retail stores and financial institutions.

Much as the application of electronic technology has increased manufacturing productivity, the application of e-commerce and e-financial technology may be expected to improve productivity in those sectors as well.

As you may know, Congressman Greg Walden is the chairman of the Congressional House Subcommittee on Communications and Technology.

The Congressman recently hired Mr. Ray Baume to be his chief technical advisor for that influential subcommittee.

Mr. Baume was serving as the chairman of the Oregon Public Utilities Commission when he was hired for that advisory position.

We look forward to working with the Congressman and Mr. Baume, especially regarding issues that affect rural Oregon telecommunication.


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