news

Statement

of the

Honorable Nydia Velazquez

Ranking Member

House Committee on Small Business

Building on the Wireless Revolution: Opportunities and Barriers for Small Firms

Tuesday, February 11, 2014

Mobile connectivity is transforming our daily lives by revolutionizing healthcare, education, public safety and nearly every other economic sector.  With almost two-thirds of cellphone users now utilizing their phones to shop, conduct business, or surf the web, it comes as no surprise that the wireless industry is expected to soon be valued at $25 billion. Such rapid industry growth will account for an estimated 500,000 jobs. 

It should come as no surprise that entrepreneurs are among the most technology-savvy consumers.  Small firms increasingly find innovative ways to access untapped markets through low-cost voice and video conferencing. Many small businesses are utilizing social media to interact with consumers and market their products and services.

Not only is this technology helping small firms reach new customers, but the very nature of office efficiency is being changed.  Mobile innovations empower business owners to track productivity gains, reduce paperwork, and better meet customer needs.  In fact, wireless technology has become so central to business operations that 65 percent of small firms say they would struggle to survive without it.   

The most successful businesses are not just the ones adopting new products and software, but they are also those developing these technologies.   In just a few short years, developers have created millions of apps -- and this number continues growing exponentially. The vast majority of these designers and developers are small firms.  One study found that 78 percent of developers are small businesses -- with many having fewer than 10 employees. Despite recent gains, the wireless sector faces several challenges to continued growth, such as regulatory uncertainty, cybersecurity, privacy issues, and capital infusion.  The most contentious and immediate obstacle to wireless innovation appears to be access to sufficient spectrum. 

Spectrum capacity is necessary to deliver high speed, high quality communications to consumers and businesses of all types.  But this ever-increasing demand for mobile broadband is causing a spectrum crunch.  As technology improvements alone cannot solve this problem, changes to spectrum policy will likely need to be addressed.

One such issue is ensuring the FCC conducts spectrum auctions in a manner that is fair for small firms.  Balancing the needs of all parties is important for guaranteeing industry competition.  For this reason, I applaud Chairman Wheeler’s announcement to postpone the auctions until they can develop an adequate process that meets objectives like these.

Today’s hearing will also touch on the use of unlicensed spectrum and its role in sparking innovation.  Unlike licensed spectrum, unlicensed spectrum is available to a wide audience at relatively lower costs.  This valuable communications resource is estimated to generate $50 billion each year for the U.S. economy.  As it is a critical platform for entrepreneurs to use in developing their products, I welcome making more of this spectrum available to foster yet more entrepreneurship and innovation.

Just as today’s hearing will focus on small business innovation in the mobile technology industry, it will also give us a chance to hear the challenges these businesses face -- and their thoughts on the spectrum crunch.   The insights gathered today will help ensure the needs of small firms are taken into account in future FCC spectrum auctions. I do not think it is an overstatement to suggest our country’s continued competitiveness in the technology sector depends on this process functioning fairly and smoothly.

In that regard, I thank the witnesses for contributing to this valuable discussion and yield back the balance of my time.  

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