Those who want to auction every last hertz of spectrum overlook two basic economic facts about unlicensed spectrum:

First, if spectrum is as valuable as mobile carriers claim it is, reducing the amount of spectrum available for auction by dedicating some of it for unlicensed use should drive up the price of the remaining auctioned spectrum. So designating some unlicensed spectrum will not reduce proceeds delivered to the Treasury. Given the inelastic demand for spectrum, the price increase for the spectrum that is auctioned will result in no loss of revenue. Some of the spectrum that is likely to be useful if set aside for unlicensed use is not likely to fetch much of a price at auction (e.g. the “duplex gap”) because it is not suitable for high power 4G (LTE) wireless networks.

Second, unlicensed spectrum is the most valuable part of the wireless broadband product space by a wide margin. It supports half the traffic delivered to consumer smartphones and tablets and is the final link to the consumer for one quarter of all traffic flow delivered to users with fixed, wireline broadband. The massive amount of economic activity in the unlicensed space generates huge economic value, which in turn maximizes large tax revenues for the federal government.

Those who think that more unlicensed spectrum will lead to “free” Wi-Fi also overlook basic economic realities. Even though unlicensed spectrum is very good for consumers and the economy, it is important to recognize that not paying money at auction to gain access to unlicensed spectrum does not mean that it is free to put it to use. Quite the opposite is true. There are real costs involved in moving the exaflood of bits to and from an unlicensed hotspot. There are real costs in building and acquiring the equipment that will receive the data transmissions and to manage an unlicensed wireless network. If you talk about service for hundreds of millions of people in the U.S. and billions globally, one thing is certain — if the cost of building and operating an unlicensed network are not recovered from consumers, the network will not be built or operated.

A substantive debate on spectrum policy is a good thing. The clash of ideas will produce better decisions at the FCC. But let’s all take a deep breath and get our facts straight. A hundred years ago, public policy to allocate spectrum concluded that interference could only be controlled by giving a small number of broadcasters exclusive licenses to operate in specific frequencies. Twenty years ago, the FCC decided to try a radical new approach by allowing anyone to transmit signals into spectrum that had been considered garbage, as long as they adhered to simple technical rules. We now recognize that this radical decision led to modern-day Wi-Fi. The remarkable success of Wi-Fi demonstrates that hotspot operators and consumers will willingly pay hundreds of billions of dollars to build and use the Wi-Fi infrastructure even without the ability to exclude others granted by a license — and they are likely to do the same for the FCC’s more recent innovations related to unlicensed use between TV channels, and new unlicensed designations in the 600 MHz, 3.5 GHz and 5 GHz bands in the future.

Could new, unlicensed designations lead to new competition for cellular wireless broadband service? Maybe, but the important point is that it will be an important input to the wireless broadband space, particularly the Internet of Things that connects hundreds of billions of objects.

There are two extremely important lessons to learned from the remarkable success of unlicensed spectrum.

• Policy should expand possibilities, not foreclose them.
• Having dramatically different business models occupy a single product space spurs and maximizes innovation and efficiency.

It would be a huge mistake to try to pick winners and losers by favoring cellular licensed service to the exclusion of unlicensed spectrum.

Mark Cooper is the Director of Research at the Consumer Federation of America and a fellow at the Donald McGannon Center for Communications Research at Fordham University.

The study, conducted last September, found most companies offer download speeds during peak periods that roughly match what they advertise. Verizon Communications Inc.’s fiber connection, the company’s fastest, averaged download speeds that were 118 percent of advertised download rates. Cablevision Systems Corp. came in at 115 percent and Comcast Corp. delivered 103 percent, the report found.

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Here, via broadband service company Sandvine, is what happened to Web traffic during the game, at an unnamed East Coast-based ISP:

Overall, Sandvine says, network usage was down 15 percent during the game. And that makes plenty of sense. Though it would have been interesting to see what had happened if the 49ers hadn’t shown up, post-blackout, and decided to make it an actual competition.

Also not-that-surprising-but-still-interesting: Those of you who did tune into CBS’s livestream (and bonus features) did it more often when there was something interesting to watch — like Beyonce, or Colin Kaepernick running at super speed.

In the past year, we’ve seen several niche social media networks blow up around images, music and ideas — Instagram, Spotify and Pinterest. But what happened in the digital video space? Many mobile video start-ups entered the scene this year, yet despite the increasing demand among consumers for Web video, none of these companies could crack the code on the most critical element of digital video: Discovery. But as content multiplies at an increasing rate, 2013 will finally be the year that the future becomes clear on the next advancement in video.

• Online video consumption hits a historic inflection point, doubling in 2013
  We are at the threshold of the second digital video revolution spurred by better and more affordable hardware and connectivity. Smartphones are in the hands of nearly one billion across the globe, and tablets, or “the second television,” are blowing up. The iPad alone has climbed the ladder of adoption three times faster than the iPhone and Gartner predicts tablet sales will hit 13 million in 2012, with this number expected to triple by 2016.

  Couple the rapidly increasing penetration of tablets and smartphones with LTE connectivity, and it’s pretty much guaranteed that consumer appetite for video will grow, transforming mobile video consumption into a daily habit. This will ignite a digital video revolution that mirrors the shift from dial-up Internet to broadband. The revolution that happened on desktop years back is about to transpire on mobile, as 2G and 3G are traded up for LTE networks on smartphones. Even with its incredible user adoption, the broadband’s impact on desktop video will pale in comparison to the more accelerated mobile video craze that’s about to kick off.

  In the last three years we’ve seen about a 140 percent increase in the amount of video content viewed online. comScore’s Video Metrix from April 2009 — when total video views hit 17 billion — sharply contrasts with 40 billion videos viewed across Web on November 2012. As consumption of video continues its march from the living room and desktop to smartphones and tablets, I predict that demand, production and consumption of video will double, and video views will hit 80 billion per month by the end of 2013.

• A newcomer will challenge YouTube for the other half of video consumption
  Declining hardware and distribution costs coupled with a steady increase in consumer demand for video has provoked a huge surge in production of pro and semi-pro video. Because of this increase in more professional-grade video, we have seen a major shift in where people are going to find digital video content.

  People are still watching just as much video — but they are now looking to different sources on the Web. In the past five months there has been a 34 percent drop in the total volume of video consumed on YouTube compared with the rest of the Web. YouTube views peaked in June 2012 at 18.3 billion, but have since declined to 12 billion on November 2012. comScore’s Video Metrix measured total Web video views in June 2012 at 32.9 billion; fast-forward to November 2012 and total video views across the Web hit 40 billion. While YouTube lost about six billion views within that five-month period, the other half of Web video shot up by 13 billion. As online video fragmentation increases in 2013, so will the need for a newcomer that aggregates YouTube and the second half of the Web’s video under one roof.

• TV networks and the top content creators will be forced into unchartered distribution and economic models
  Big media has seen the rapid shift toward Web and mobile consumption, and sites like Discovery.com, Disney, MTV and CNN continue to produce more online content. Now the real challenge becomes the fight for more audience, monetization and market share. These content creators and their advertisers won’t be satisfied with the results they get within their own silos, and will start looking for a way to expand their reach while still maintaining control over their videos.

  We have seen that relying on social networks like Facebook and Twitter for viral spread is not enough. At Twitvid, we saw major brands with over five million followers post videos to Twitter and receive only a few thousand views. Even major television networks such as CBS and ABC are struggling with this issue. ABC’s Modern Family and Glee, which previously only distributed episodes to Hulu, are now opening distribution to anyone as the effort to reach viewers continues. But no one has found a sustainable combination of large audiences and ability to drive traffic and revenue back to content creators.

  In 2013, studios and networks will be eager to experiment with new disruptive models, and expect to see a new breed of startups that can cater to their desire for both large audiences and strong control over content.

• All of this will lead to a new opportunity in video discovery that resembles something more like Spotify and less like Instagram
  Digital video is currently plagued by the lack of any real means of video discovery capable of meeting the needs of a social, mobile world. I’m confident that in 2013, someone will solve video discovery through social content aggregation — not just from YouTube, but from the exploding long-tail of semi-pro video. Many have pointed to an “Instagram for video” as the cure-all for the video space’s current state of disarray. But this is much bigger than that. Instagram focuses on user-generated content, which as Socialcam and Viddy proved this year, is not the way to win in the long term. Digital video is insanely larger than just user-generated content. The long-tail of video content is where consumer eyes draw the brands, and ultimately, revenue.

  In the same way that Spotify, Instagram and Pinterest successfully solved discovery for music, pictures and ideas, new models will emerge aiming to figure out a way to tap into this massive new world of video and somehow find a way to weave it all together.

What other predictions do you see for the world of digital video in 2013? Please submit your predictions in the comment section below.

Mo is the CEO and Founder of Telly, a social video network for discovering and sharing the best videos. You can follow him on Twitter @maladham and on Telly.

Mr. Ergen’s attempt to snatch wireless provider Clearwire Corp. out of the hands of its current merger partner, Sprint Nextel Corp., is just his latest move in a long chess match. The endgame: to get access to the spectrum and network assets needed to deliver wireless service and even video over the air.

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Clearwire shares immediately rose above the offer price Thursday, reinforcing expectations that any deal for the smaller wireless company will likely need to be higher. Although Sprint controls a majority of both Clearwire’s stock and board seats, any deal must be approved by a majority of non-Sprint directors and a majority of remaining shareholders.

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The company, backed by Skype founder Niklas Zennstrom, plans on Wednesday to start taking preorders for an $89 device to offer home broadband service using fixed WiMax service powered by Clearwire.

As it does on the mobile side, FreedomPop will offer a chunk of data free each month, with low-cost options for additional gigabytes. With the home product, customers will get 1GB of data free each month, with a $10-per-month plan offering enough additional data to meet the typical consumer’s needs.

In an interview, FreedomPop CEO Stephen Stokols said that the average U.S. household pays upwards of $40 per month for home broadband even though more than half of users consume less than 6 gigabytes of data.

“It’s going to be extremely disruptive,” Stokols said.

FreedomPop says the home router will deliver far faster speeds than Clearwire’s mobile devices and that FreedomPop will only offer service to addresses where the company can deliver speed equal to or faster than those offered by DSL.

Stokols said that the company had planned to wait until later to move into the home broadband market, but was encouraged by its early results on the mobile side which showed a substantial number of customers opting for FreedomPop’s paid services.

“We’ve always kind of planned to go after the home market pretty aggressively,” he said. “We’re accelerating that.”

In the first couple of months of offering an iPod Touch sled, USB stick and mobile hotspot, Stokols said that more than 20 percent of users have switched to a paid plan while more than a third of customers are opting for one of the company’s existing value-added services — such as notification of when one is about to hit their free limit.

“We’re getting much better traction … than we ever imagined,” Stokols said.

On the home side, the broadband plan is also a gateway to also offer additional services, including VoIP calling, among other things.

The technology advocacy group surveyed the states to compare indicators on broadband adoption, network quality and the degree to which the economic structure encourages development and makes use of broadband, and it massaged that data into a ranked list.

The state of Washington, home to Microsoft and Amazon, came out on top, and while California checked in at No. 5 and Utah made No. 9, the Top 10 was dominated by states in the Northeast, led by Massachusetts, with its dense cluster of tech companies and universities.

You can read the full report here or see the infographic below for the highlights.

If Google doesn’t need to rely on the Comcasts/Time Warner Cables of the world to connect with your computer, then all kinds of interesting stuff could happen — if Google really does want to get into the business of becoming a broadband provider.

Google says that’s the case, but it’s hard to imagine the company really following through. So, we’ll see.

Meantime, Google Fiber, which started rolling out to homes last week, also gives you a glimpse at what The TV Of The Future is supposed to look like. You turn on your set and can watch whatever you want, no matter who is sending out the signal: Broadcast TV, cable TV, Netflix, etc. (You’re probably going to pay for it the same way you do now, though.)

BTIG analysts Rich Greenfield and Walt Piecyk trekked out from New York City last week to get a hands-on demo of the TV service (registration required), and you can see a demo clip here.

It’s not a thrilling video, because it relies on still shots, but it does give you a sense of what the product actually looks like.

The big idea here is one we’ve also seen from other next-gen TV experiments, including Google TV, Microsoft Xbox and Nintendo’s new console: One screen, many inputs, and a guide that simply lets you find whatever you want to watch, without having to worry about the source. If a mythical Apple TV ever shows up, it should do the same thing:

One other point: Note that the one thing you’d expect to see from Google in a TV product — YouTube — isn’t actually available yet. It’s supposed to show up next year, and the fact that it hasn’t yet is sort of astonishing, given YouTube’s stated ambition to compete directly with TV for eyeballs and ad dollars.

But bear in mind that for whatever reason, the Google org structure puts YouTube and Google TV in a completely different silo than Google Fiber. Internally, that must make sense in some Googley way. But it’s hard to fathom from the outside.

So no surprise you spend lots of time using them to do the same thing you do on a regular computer: Watch YouTube.

Here, via broadband service company Sandvine, is a breakdown of mobile Web traffic in North America. By Sandvine’s count, Google’s video site accounts for nearly a third of the data piped into your phone from wireless networks.

Bear in mind that Sandvine is tracking data usage, not time spent, so this isn’t an exact mirror of your phone habits. But it is revealing. Also interesting: We spend more data pushing updates, photos, etc., to Facebook than any place else.

If anything, Sandvine’s data likely undercounts the amount of use these sites get from your phone, because a lot of your phone’s use, particularly for stuff like streaming video, is probably happening at home, on a Wi-Fi network.

But it certainly syncs up nicely with the emphasis YouTube has put on overhauling its mobile apps — the company says it gets a billion mobile views a day — and why it was important for the company to reclaim its app on Apple’s iOS devices.

Shares fell 3.1% to $33.72 in recent trading. The stock is up about 15% this year.

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Access to the Internet has come to represent the new wealth gap, and the Web is now so pervasive that this gap can be found everywhere — between states, countries, demographic segments and business sectors. But while the educational, social and cultural impacts of being connected are well documented, is there also a very real financial factor? What is the correlation between Internet connectivity and prosperity? Can getting more people online help turn around an ailing global economy?

The closure of the divide will suddenly grant everyone an equal chance to succeed. But the onus is on both the public and private sectors to keep innovating to deliver the low-cost services, connectivity and devices to help close this gap as quickly as possible.

In the United States, the divide is slowly but surely being eradicated. Broadband penetration currently stands around the 70 percent mark with more than 85 million homes having fixed broadband subscriptions. The FCC National Broadband Plan will further extend the connected experience with the goal of taking Internet access to every American by 2020. The implications are huge. Connecting the masses, both domestically and internationally, to the Internet is set to fundamentally improve the quality of people’s lives and close the Internet Divide.

While providing broadband access is a critical step, it will be engagement that really closes this technology gap. People willing to immerse themselves in the Web and harness its connectivity to shop, learn, consume information and do business will find their lives enriched. Embraced in the right fashion, the Internet provides power and opportunity where it never before existed. Small businesses can compete with much larger corporations on a footing they would never have thought possible. Organizations are being forced to deliver a better experience and be far more price competitive than they ever needed to be, which is great news for the consumer.

The Internet has opened up a world of competition, giving consumers far more power than ever before, especially in markets like retail — competitors have increased, prices have fallen. In 2010, $142 billion dollars were generated by retail shopping sites, with that number expected to reach $269 billion by 2015. The number of online shoppers in the U.S. is expected to grow from 140 million in 2010 to 170 million in 2015. We no longer need to touch, feel or see the products before we buy them. Our retail behaviors and our attitudes toward shopping have fundamentally changed.

Retailers that embraced the Internet in the right way early on carved out a huge financial advantage over their less progressive foes. Connectivity made physical location irrelevant and gave the individual with a bright idea the power to challenge the mighty corporations. Without the need for expensive stores, they can administer their business from wherever they choose and cost effectively ship product from around the world. But while that connectivity allows a business to operate from anywhere, it enables its competitors to do exactly the same — the opportunity for growth and the threat from competitors created by the Internet are two factors that are intrinsically linked. Connectivity opens up markets to a slew of new entrants; those that are strong, innovative and, most-importantly, focused on customer experience will be the ones that survive.

And that customer experience has become paramount, especially for markets like hospitality. While once restaurants only needed to worry about word of mouth to drive reservations, now their potential patrons have a world of reviews on their mobile devices. A bad review of their service can be shared in seconds via the Internet and has the capacity to destroy a business in a matter of weeks. Reports have revealed that a one star increase in a Yelp rating provides a 5 percent to 9 percent increase in revenue. An impeccable experience has suddenly become table stakes.

Arguably, the quality of experience for shoppers, diners and guests is better now than it was a decade ago because of the Internet. And while connectivity has leveled the playing field for retailers and restaurants, the same is true for big business.

The Internet has put developing nations head to head with developed countries in many industries — in geographic terms, the Internet Divide is starting to disappear. The ability to deliver comparable services for a far lower cost thanks to the Web has again created opportunity for the traditionally disadvantaged competitor. In the last ten years, top U.S. corporations like General Electric, Microsoft and Chevron have outsourced some 2.4 million jobs from North America to developing nations. That outsourcing is taking place because we, as a planet, are more connected. And countries like India and the Philippines are capitalizing on the investment of global businesses.

The link between connectivity and prosperity is real. In a time where the global economic situation has rarely looked so dire, connectivity can create significant financial opportunity. Every person online who is demanding and accessing services or consuming content is not only experiencing an improved quality of life, but is also generating revenue for someone. And the more people we get online, the more that revenue increases. The economic benefit has the potential to be vast.

My vision is for a world in which the Internet Divide — and the wealth gap it creates — no longer exists. People who harness the Web effectively will compete on an even footing, and the quality of life will be improved across the board. For the gap to be bridged, though, corporations and governments need to maintain their focus on bringing the Internet to the masses and on educating the masses on how to capitalize on the opportunity. We need to continue to push broadband access into rural areas, support developing nations in building out their infrastructures and keep developing increasingly advanced devices — from handsets to tablets to routers — that give individuals the power to connect, regardless of location. And beyond the devices and the access, we need to ensure people have the tips, tools and training they need to become proficient and productive online. This will ensure that the opportunities and benefits the Internet offers are enjoyed by the masses.

Every day we’re developing these tools and taking strides that help us bridge the gap. Increased access and better connectivity creates opportunity for everyone.

Patrick C.S. Lo is the co-founder of Netgear and has been the Chairman and CEO since 2002. Patrick founded Netgear with Mark Merrill with the singular vision of providing the appliances to enable everyone in the world to connect to the high-speed Internet for information, communication, business transactions, education and entertainment.

Since March, the company has been serving up mobile data service through Clearwire, including a free 200 megabyte plan. Other plans include a basic 500MB plan for $9.99 a month, and range up to a 4GB plan that costs $49.95 per month.

Now the company is ready with a new promotion that offers customers up to an additional 1GB to share with Facebook friends who have NetZero’s service. Customers get 1GB of data each month to give to their friends in 200MB increments, up to a maximum of 1GB per user.

“We just think in this day and age it’s a way to expand our message,” NetZero Wireless President Rusty Taragan said in an interview, noting that the company is also doing traditional TV advertising and direct marketing.

NetZero is one of a number of companies, including FreedomPop and Solavei, looking to offer cheaper or free mobile broadband.

“It reminds me of 1999 and 2000 with NetZero,” Taragan said, noting that most people were paying $20 to $25 a month for Internet service. But with the advent of NetZero came a flurry of free and low-cost options, including Spinway, Bluelight and Juno. (Of course, many of those companies faded away; NetZero later merged with Juno to form United Online.)

Both the Facebook promotion and the free service are designed to convince people to pay for NetZero mobile broadband, Taragan said.

“This is not 1999,” he said. “We are in the business of trying to make some money.”

Taragan declined to say how many customers NetZero has for its mobile broadband service, but said the company has been pleased with the response. The company has about 650,000 people signed up for its traditional broadband and dial-up services.

It offers both a USB stick and a mobile hotspot. Through the end of the month, Taragan said, the company will offer both devices at half price — meaning about $25 for the USB stick, and $50 for the hotspot.

The satellite-TV company on Thursday is expected to disclose plans to sell broadband, at a speed of between five and 10 megabits per second, for between $39.99 and $69.99 a month for customers who also take Dish’s TV service. Those who aren’t TV customers will pay $10 more a month, a similar pricing approach to that used by cable operators.

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The cable company notified other major Clearwire investors, which have an option to buy part or all of the stake, of the move and disclosed its intention in a regulatory filing Friday. Clearwire, which is intertwined with network partner and largest shareholder Sprint Nextel Corp., is overhauling its network and seeking partnerships or asset sales to raise cash.

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And that’s good news. The FCC’s ongoing Measuring Broadband America program has had a fair bit of success in shaming underperforming ISPs into delivering the sort of speeds they promised their customers. It’s possible that this new program will have a similar effect on mobile broadband providers.

“We know from experience: Transparency on broadband speeds drives improvement in broadband speeds,” FCC chairman Julius Genachowski said in a prepared statement. “Our new mobile broadband measurement initiative extends the program to smartphones and other wireless devices. It will empower consumers and encourage improvements in mobile networks and programs, benefiting millions of Americans.”

Here’s hoping he’s right.

A prototype of a Kymeta portable hotspot, about the size of a laptop computer.

Kymeta is a spinout from Intellectual Ventures, the Nathan Myhrvold-run company best known for its irksome strategy of amassing patents and then looking to collect from companies whose products make use of the patents.

The Redmond, Wash.-based company is the second spinout for Intellectual Ventures, preceded by TerraPower, which aims to build a new kind of nuclear reactor.

Other backers of Kymeta include Liberty Global and Lux Capital.

Kymeta’s technology uses something called “metamaterials,” artificial materials that can manipulate electromagnetic radiation that can steer a radio signal toward a satellite, thereby creating a continuous broadband link.

The company said its method should pave the way for antennas that are thinner, lighter and cheaper than today’s satellite antennas.

“Metamaterials were an early focus for IV, so the spinout of Kymeta marks an important milestone in our invention work,” Intellectual Ventures Executive VP Casey Tegreene said in a statement. “As groundbreaking as it is, the satellite antenna technology behind Kymeta only scratches the surface of what metamaterials can do.”

Kymeta plans to create products for the aerospace, transportation and maritime industries, as well as for people like reporters and first responders. It also hopes to develop a portable satellite hotspot product for individual users. The goal is to have products on the market by 2015.

The move will help Dish Network compete more directly with cable and telecom operators that offer broadband, including in packages bundled with television service.

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