By Ina Fried, Kim Hart, David McCabe; original AXIOS article here.
Note: View the photos of the slides/document shared with President Trump, in advance of his State of the Union address that will be on Jan 30, 2018 at 6:00 pm PT. For those who wish to listen to other points of view on the State of the life in America, then consider the live feed of the People’s State of the Union.
Federal Takeover of Mid-Band 5G Wireless Network Raises Significant Issues
A Trump administration proposal to nationalize a portion of the nation’s wireless network in order to combat threats from China in 5G raises many technical, logistical and political concerns, including a fierce debate over the proper role of government in business.
The bottom line: The proposal calls for aggressive government involvement in the private wireless market, representing a significant shift in U.S. industrial policy that would hugely disrupt the business plans of America’s largest telecom and technology companies.
As first reported by Axios, a proposal circulated by Trump’s National Security Council proposes building a national 5G network in a chunk of airwaves, known as mid-band spectrum.
While the security of the wireless network and competition with China are both real threats, experts doubt the feasibility of this approach and question whether it would actually lead to a faster, more secure path to 5G connectivity.
Here are some of the issues which experts say are raised by the proposal.
Disrupting private investment
All the major carriers have been investing heavily to roll out their own 5G networks, with many already moving into trials around the country.
- “People have either invested already in roadmaps or are very close to significant investments,” said wireless industry expert Chetan Sharma. “Nationalizing a band without significant input will obviously create a lot of turmoil in the industry.”
- Ensuring a competitive market when the network is shared could be a challenge, Sharma said. It’s unclear if smaller carriers and potential new competitors would have access.
An appendix to the memo anticipates that the harshest reaction to its proposals would come from the satellite industry, which uses the mid-band spectrum that the NSC suggests using for 5G, and from cable giants Comcast and Charter. But the memo suggests other players could be allies:
- T-Mobile is seen as a possible strong supporter of the proposals because it "lacks rich spectrum for nationwide 5G and would welcome more level playing field" with AT&T and Verizon.
- CenturyLink is seen as potentially supportive because it could use a nationwide 5G network to "monetize its fiber-rich network."
- Google is similarly seen as a potential ally because more internet access means more people online to consume the ads Google serves.
- AT&T, Verizon and Sprint are all expected to have "mixed" reactions.
Impossibly short time-frame
The three-year timeline laid out by the proposal is not feasible, according to a wireless industry source. Even with private sector resources and competitive incentive to move a quickly as possible, it will take the nationwide carriers close to a decade to build out full 5G networks.
- Plus, any wireless network depends on robust fiber networks in the ground, which would need to be expanded and refurbished for a full-scale 5G network.
- "The notion that the government can singularly build this network in three years is nuts," the source said.
Massive political blowback
A federal takeover of privately funded and operated infrastructure would draw fire from both sides of the aisle.
- State and local governments will bristle at the idea of the feds taking away their ability to decide where network equipment can be placed on their streets and buildings.
- The memo indicates eminent domain could be invoked to justify clearing airwaves needed to build the network, which would meet strong opposition from government and commercial users of those airwaves.
- The Federal Communications Commission, which oversees the commercial use of spectrum and is involved in 5G deployment efforts, is an independent agency and would not be compelled to comply with an executive order of this nature. This could set the stage for an inter-governmental standoff.
Security could still be a challenge
One goal put forth by the proposal is to create a highly secure network to ward off growing security threats from China and others. The problem is that 5G connectivity will rely not just on one single-band network, but a conglomeration of multiple different types of networks.
- In the end, the network is only as secure as all the connection points on it.
- Even if a narrow slice is secure, the networks feeding into it wouldn’t necessarily be secure and could therefore compromise the rest of the network.
The market for network gear is already highly concentrated
Another argument laid out in the documents is the notion that such a centralized network could create more competition in the network equipment space. But most cellular network gear is already made by a small number of companies.
- On the radio side, there are really only three big players — and none are American.
- Huawei (China) has been the fastest growing, with Ericsson (Sweden) and Nokia (Finland) following.
- Although Huawei’s growing dominance is a concern, the U.S. already prevents the major carriers from using Huawei’s gear in its networks so it’s not clear how much a centralized network would change this balance of power.
AI is a big issue, but unrelated
The document talks about China’s advanced role the development of artificial intelligence.
- That’s a serious issue, especially since U.S. companies are locked out of China (and the data to be gleaned there), while Chinese companies can take part in the U.S. market.
- But, that has little to do with 5G wireless networks, since AI processing is done at the server level.
- “Clearly they are two different things,” Sharma said. “AI benefits from 5G but it doesn’t require it, and there China is racing ahead.”
White House Backpedals on Nationalised 5G Network
by Jamie Davies; Original article here.
Following rumors the US Government was going to nationalize a 5G network, White House officials and the FCC have hit back rubbishing the claims.
Several White House officials have confirmed to various news outlets the proposal was nothing more than blue-sky thinking from a staff member at the National Security Council, and shouldn’t be taken too seriously. Alongside this denial from the Trump administration, the FCC has also been relatively vocal in opposition.
“I oppose any proposal for the federal government to build and operate a nationwide 5G network,” said Republican FCC Chairman Ajit Pai. "The main lesson to draw from the wireless sector’s development over the past three decades — including American leadership in 4G — is that the market, not government, is best positioned to drive innovation and investment.”
It should hardly be surprising that Pai, irrelevant as to whether he is a Trump puppet or not, is opposed to such a proposal. Considering he has almost single handed dismantled net neutrality rules, removing some regulatory barriers for carriers, it would be incredibly contradictory for the US Government to take such a dominant position in deploying and managing 5G infrastructure. Even so, this is also an issue which has seemingly been able to unite Republican and Democrat Commissioners.
“The United States’ leadership in the deployment of 5G is critical and must be done right,” said Democrat Commissioner Mignon Clyburn. “Localities have a central role to play; the technical expertise possessed by industry should be utilized; and cybersecurity must be a core consideration. A network built by the federal government, I fear, does not leverage the best approach needed for our nation to win the 5G race.”
While the White House was keen to distance itself from any real policy, we don’t quite believe it all. Considering the detail that went into the proposal, it would have at least have had to been greenlighted by someone for a bit of exploratory research. An off-cuff idea was probably raised, a minion told to do some research and then the memo intentionally leaked to get an idea on how it would be received.
The culture of leaking in politics is relatively common, and should you believe the skeptics, it is done intentionally to measure the reception of some more radical ideas. An intentionally leaked documents offers arm’s length should it be a bad idea, or the chance to claim responsibility should the reaction be positive. As you can see below, it certainly wasn’t.
“There is nothing that would slam the brakes more quickly on our hard-won momentum to be the leader in the global race for 5G network deployment more quickly than the federal government stepping-in to build those networks,” said Jonathan Spalter, CEO of broadband association USTelecom.
Industry and the media didn’t like this idea, so everyone is scrambling to get as far away as possible from the toxic memo. There will still be some voices of support for such an idea, as it is believed a federally controlled asset would offer greater security against the Chinese (who clearly only think about spying on the US), but these individuals will be restricted to the shadows of the White House. Of course, there will be some government prying and intervention, though it will be months before we figure out how much.