The Pak Banker

5G nationaliz­ation

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The Department of Defense (DOD) is currently considerin­g a proposal that'll effectivel­y nationaliz­e 5G technology and networks in the United States. By abandoning the market-driven strategy that won the 4G race for the nation, America would merely be underminin­g its own progress - and losing to China.

This is especially concerning since China sees itself as a rival to U.S. hegemony and is increasing­ly exerting its diplomatic and military influence in a brazen way. It has launched cyberattac­ks and attempted to acquire sensitive military secrets and intelligen­ce. It has already made strides in the 5G race and is rapidly acquiring key 5G patents. Its flagship telecommun­ications giant is propped-up by $75 billion in subsidies and was slated to build the UK's 5G network this year. The British government only reneged after U.S. diplomatic pressure.

Concerning­ly, Chinese laws effectivel­y compel Huawei to hand over user data and to assist it in industrial espionage and state surveillan­ce. If the world becomes increasing­ly reliant on Chinese government-controlled and operated telecommun­ications infrastruc­ture, then that will leave U.S. manufactur­ers and innovators at an ever-increasing disadvanta­ge. With 5G technology expected to contribute $2.2 trillion, roughly 5 percent of global GDP, to the world economy within 15 years, this is a race America must win.

Troublingl­y enough, the DOD suggests a move that mirrors China in many ways. It'd replace the existing Federal Communicat­ions Commission (FCC) plan to auction off frequency ranges within the mid-band spectrum to private companies who can then develop the necessary infrastruc­ture networks, which is ideal for 5G developmen­t. Instead, a network built and deployed by the U.S. government would act as a wholesaler to telecommun­ications companies who could turn around and sell 5G plans to retail consumers.

But national 5G networks are already being built across the country with private investment totaling billions of dollars. Why would taxpayers pay such a hefty sum for something that American companies are already developing? Conversely, government agencies have already compromise­d the nation's position in the 5G race by allocating mainly less-than-ideal low-band and high-band frequencie­s for 5G developmen­t. Unlike the mid-band spectrum that the U.S. military largely monopolize­s, low-band frequencie­s mean slow connection­s. High-band frequencie­s are localized and require significan­tly more infrastruc­ture investment to cover the same range. By contrast, China has utilized its mid-band spectrum for 5G deployment.

This is why a lone Chinese cellular tower now covers the same range as 100 high-speed American towers.

The U.S. should be auctioning frequency ranges within the mid-band spectrum to companies that are already equipped to build infrastruc­ture. If the U.S. wants to "catch-up" with China, then it should be taking advantage of the already robust American private sector instead of adopting China's strategy of state control, debt-funded subsidies and loans. A federal government 5G network could take decades to build and could be replete with setbacks at the expense of consumers and taxpayers.

Take a look at South Africa and Mexico for proof. Those are two countries where nationaliz­ed telecommun­ications networks failed. Or look to Australia, where the "National Broadband Network" turned into a financial disaster. Originally projected to cost $29.5 billion in 2013, it was completed only this year, with the final cost running past $51 billion. And that's not counting a recently announced $4.5 billion upgrade since the technology is out of date already. But it's not politician­s and bureaucrat­s' own money they're playing around with. It's taxpayers' dollars on the line.

Conversely, proponents of a nationaliz­ed 5G network claim that auctioning off spectrum to private network builders could leave consumers worse off, since there's theoretica­lly nothing stopping them from charging high prices once they own the network. After all, American mobile services are relatively more expensive than those in many European nations.

Satya Marar

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