Telecommunications companies today got a rude awakening when Axios broke news that the Trump administration is considering a recommendation to centralize and build a 5G wireless network. According to multiple news outlets, members of the U.S. National Security Council (NSC) presented senior White House officials with recommendations to centralize the United States’ 5G network in order to prevent cyberattacks and meddling from China. The Council recommends that this plan be executed by the end of President Trump’s first term. Axios quotes a source familiar with the documents saying that a single centralized network is “what’s required to protect America against China and other bad actors.”
However, when asked about this proposal in today’s daily press conference, White House Press Secretary Sarah Huckabee Sanders said that the White House was in the “very earliest stages of the conversation” and that no decision had been made yet.
5G infrastructure control would be extremely controversial because telecommunications has traditionally been a privately controlled industry. Moreover, the major wireless carriers are all in the process of developing their own 5G networks which they would fund without taxpayer dollars. The proposal recommended that the U.S. government pay to build a single 5G network and allow for telecommunications companies to compete with one another on where to build their own 5G networks that would then “rent” access from the government. How this network would respond to the unique needs of different carriers is unknown.
I have to believe that the NSC is somewhat unfamiliar with longstanding federal communications policy favoring competition and has not assessed the problems involved in governmental ownership of companies operating in traditionally private sector industries. Federalizing a dynamic industry is in direct contrast with the deregulatory policy that the Trump administration has espoused. Implementing 5G is going to involve millions of small cell sites, a lot of “on street furniture,” and a single 5G system will cost an enormous amount of money to build, maintain, and operate. If adopted, a national wholesale 5G system would be a disaster, forcing the carriers into a one-size-fits-all solution, adding to the national debt, and killing competition for 5G deployments.
Not to mention that the four major U.S. carriers are already committed to implementing 5G initiatives with their own funds.
As a result, the cost controlling aspects of competition would not be present and competitive innovation would be stifled. These problems would be tolerated for a claim of greater security, which seems illusory. And the FCC agrees.
Chairman Pai, and all four commissioners, have voiced their opposition to this proposed measure. In a statement, Chairman Pai said that “What government can and should do is to push spectrum into the commercial marketplace and set rules that encourage the private sector to develop and deploy next-generation infrastructure. Any federal effort to construct a nationalized 5G network would be a costly and counterproductive distraction from the policies we need to help the United States win the 5G future.” Commissioner O’Rielly stated that this plan is “nonsensical” and does not take into account the current marketplace and he will do everything in his power to “provide the necessary resources, including allocating additional spectrum and preempting barriers to deployment, to allow this private sector success to continue.”
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