A mysterious document obtained by Axios proposes a federally owned, nationwide 5G network to counter national security threats posed specifically by Huawei and ZTE.
The proposal would upend the entire US mobile network market, rebalance power between wireless carriers, bust through city and state laws, declare two major Chinese companies to essentially be enemies of the state, and cost up to $200 billion. The federal government would build the nationwide network within three years, and rent it back to wireless carriers for private use.
It’s unclear how serious the proposal is. While Axios ascribes it to “a senior National Security Council official,” it could be a war games-type brainstorming exercise, a starting point for discussion, or a serious policy proposal. It’s impossible to tell without more details on who wrote it and what they were thinking. Still, it’s the most radical vision statement we’ve heard from the government about wireless in decades. If implemented, it would change everything.
Currently, US wireless carriers are planning to launch their own 5G networks in 2019 or 2020, which they would not share.
The impetus for this national broadband network is a fear of Huawei and ZTE, which in terms of the document, are seen not merely as network equipment providers but direct agents of “China.” While Nokia, Samsung, and Ericsson all make network equipment used worldwide, the document sees Huawei and ZTE as becoming globally dominant because of their government support.
Whether or not the proposal is serious, if this is how key elements of the government feel about Huawei, it’s no wonder the phone maker’s deal to sell its Mate 10 Pro with AT&T fell apart.
The proposal suggests building a nationwide 5G network in “mid-band” (3.7-4.2GHz) spectrum within three years. The federal government would use national security rules to override town, city, and state regulations on tower placement, and would rent space on the network back to the major network providers. The network would be built by “former or reserve military personnel” and other workers who would be federally trained by a “National Training Program.”
The proposal would allow wireless providers to compete with each other outside the government-run spectrum. The basic idea is that this federal network would serve as a common backbone of coverage, while carriers would still compete with their own coverage areas and build-outs in lower and higher spectrum bands. (It makes a mistake in claiming that only Verizon is working with extremely high-band, millimeter-wave spectrum, when all the carriers are looking into it.)
There are huge legal and technical hurdles to this. Early 5G networks must be tightly tied to an existing 4G network, and thus can’t be shared unless the 4G networks are also shared. The proposal would probably result in lawsuits from state and local officials who won’t like giving up control of their local streets.
FCC Chairman Ajit Pai, a vigorous advocate of a “light-touch” approach to regulation, is not a fan.
“I oppose any proposal for the federal government to build and operate a nationwide 5G network. 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,” Pai said in a statement. “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.”
Wireless industry trade association CTIA also came out against the plan. “The wireless industry agrees that winning the race to 5G is a national priority. The government should pursue the free market policies that enabled the U.S. wireless industry to win the race to 4G,” said CTIA President and CEO Meredith Attwell Baker.
A federally owned network would turn the entire “net neutrality” debate on its head, as lawyers debate what a public network’s First Amendment responsibilities would be to service providers and content providers alike.
The basic idea of a shared internet access network harkens back to some of the concepts in the Telecommunications Act of 1996; most notably, unbundled network elements and platforms. From 1996 to 2003, phone companies were required to rent out their lines to competitors, creating vigorous competition in internet service. That faded after a set of court rulings lifted that requirement and made it clear that it doesn’t apply to cable.
But let’s make it clear: the proposal doesn’t discuss increasing ISP competition anywhere. Its sole focus is on repulsing a perceived Chinese threat. The national network would be a way for the federal government to steer contracts to preferred providers and to nurture a network-equipment market that is free of Chinese influence.
Coming from supposedly free-market-friendly and federalism-friendly Republicans, the proposal is shocking, as it reconfigures an entire sector of the economy in the name of defense against a perceived Chinese threat. It’s a little bit socialist, and a lot nationalist. If this isn’t just the work of one overcaffeinated NSA analyst with a pipe dream, it would be this administration’s most radical information policy step, by far.