October 19, 2020
Winning 5G .
We just had another great week in the U.S. for 5G. A third nationwide network was launched and another signature 5G smartphone was announced.
We have had a lot of great weeks in the past few years as America’s wireless industry has been building our future 5G economy across the country. Tower by tower, small cell by small cell, device by device, the U.S. wireless industry has made remarkable progress thanks to policymakers embracing the successful private sector approach for 5G that paid such great dividends for our 4G leadership.
The Pentagon has now suggested a radical departure from that winning formula by dedicating a huge swath of critical mid-band spectrum to building a military-controlled 5G wholesale network. This has rightfully been met with universal bipartisan condemnation. Senior Democratic Hill leadership has aptly noted that a nationalized 5G network would “do nothing but slow the deployment of this critical technology.” Nineteen Republican Senators urged the Administration to stay on the “free-market path” and reject “untested models for 5G deployment.” All five FCC commissioners have been vocally opposed to the concept: FCC Chairman Pai concluded nationalization would be a “costly and counterproductive distraction” and the senior Democrat on the FCC Commissioner Jessica Rosenworcel reflected it “really misses the mark.”
It is important to separate out what this nationalization proposal is and what this is not about.
Nationalization is not about beating China.
Today, the U.S. has multiple nationwide 5G networks covering hundreds of millions of Americans. Over the past four years, the wireless industry has invested a staggering level of private capital—over $100 billion—to bring 5G connectivity from New York City to Cedar Rapids with a safe and secure supply chain. Our efforts have left countries like China scrambling to catch up. The first U.S. commercial 5G deployments were 13 months before China, and China is still behind seeking its first national network. We keep pushing ahead as the U.S. invested three times more per capita on 5G than China last year. A recent Boston Consulting Group study found that increasing subscriber penetration is the key indicator of a country’s 5G progress, and here too the U.S. is projected to be way ahead. 5G is projected to represent three quarters of U.S. wireless connections by 2025, 15% higher than China. The U.S. wireless industry is showcasing to the world 5G success does not require Huawei gear.
Nationalization is not about serving rural America.
A nationalized DoD network would start years behind the competitive private sector with no credible way to catch up. Over 250 million Americans are already covered today with 5G. We’re moving faster with 5G than we did with 4G and one operator has committed to soon cover over 90% of rural Americans. In just the past month, 5G networks launched in rural parts of Iowa, North Carolina and Wisconsin as the U.S. industry built more cell sites last year than in the three prior years combined. The wireless industry knows there are no short cuts; building world-leading wireless networks takes resources, time and boots on the ground. Forty-three groups came out against nationalization precisely for this reason: “It makes no sense to think that the DoD, starting from zero, could deploy these networks faster or more efficiently” starting out with no towers, no fiber or any other infrastructure. Policymakers should be focused on the FCC’s 5G Fund initiative to help reach the hardest-to-reach communities faster.
Nationalization is not about wholesale access.
The U.S. benefits today from a robust wholesale wireless market. Cable companies, Walmart and others right now serve wireless consumers via wholesale access from all three nationwide operators. A government mandated wholesale approach is far different and has repeatedly failed around the world. Russia, Mexico, Belarus, Rwanda and others have been lured by the false promise of super-fast, ubiquitous, and cheap national service. Those experiments failed and their nations’ wireless infrastructure lag behind still as a result of squandered years and sidelined spectrum assets. Even socialist countries are rejecting a forced wholesale approach for 5G.
Nationalization would be a multi-billion dollar giveaway.
The Nobel Prize was just awarded to two esteemed economists who 30 years ago ushered in the wireless revolution, designing auctions of government spectrum to the private sector. This approach has led to over one hundred billion in revenue for the U.S. taxpayers, modernized equipment and systems for DoD and other agencies thanks to auction revenues, and the world class wireless networks Americans benefit from today. Those pushing DoD now to change paths want the Pentagon to simply give them access to tens of billions of dollars worth of spectrum for free without an auction in clear violation of multiple federal laws. As one prominent Wall Street analyst put it, “The whole story smacks of cronyism at best and reeks of ‘the swamp’ at worst.” Leading Democrats launched an inquiry into this non-transparent process given “several political operatives or lobbyists… including Karl Rove, Peter Thiel, Newt Gingrich and Brad Parscale – are pushing for the seismic shift in spectrum policy.” Make no mistake: this shift stands to benefit only one company while harming our global competitiveness, rural connectivity, DoD readiness, and our 5G future.
At a time when we’re seeing firsthand the benefits of advanced connectivity, 5G nationalization is a sideshow distracting from the real work ahead. We should heed the bipartisan consensus rejecting it and get back to building world-leading 5G here. After all, we are still just scratching the surface of what 5G will be. We need to focus on executing on the announced C-Band and 3.45 GHz spectrum auctions and identify thousands of more megahertz of spectrum for future auctions. We need to accelerate deployment of 5G infrastructure across the country, shrink the digital divide, and facilitate the job creation and industries of the future stemming from our nascent 5G economy.
Let’s get back to working together.