Last week Axios broke the news that the Trump Administration was considering a fundamental shift in the government’s approach to the wireless industry, namely by nationalizing the next generation 5G wireless network and investing heavily in the technology in the name of national security and competitive advantage.  An underlying fear of Chinese hacking and interference seems to be behind the idea.  For a populist President, the idea of national telecom isn’t that surprising, since there remain areas left behind by the proliferation of broadband internet and the wireless industry does have some characteristics of a natural monopoly.  Our concern, which is shared by many others, is that the government should not intervene in a marketplace where private forces are already working together to produce dramatic leaps forward.


What is 5G?


5G refers to the fifth-generation mobile network that is on the horizon that will give almost anyone with access virtually unlimited data.  5G, which is essentially a set of standards for how carriers utilize a new generation of technologies, will vastly improve the way we transmit data, with current predictions that it will be 10 times faster than the existing 4G LTE standard.  This next-generation mobile network underpins everything from the internet of things (IoT) to proposed smart cities – think self-driving cars, home appliances, the electrical grid, traffic lights, health equipment, air quality monitors, and pretty much anything else—are all connected online.  Accenture predicts that big players in the telecom industry will invest around $275 billion over the next seven years to rollout the network.


Breathe Easier


Fortunately for consumers, the administration and the FCC quickly disavowed the supposed plan shortly after the story broke.  FCC chairman Ajit Pain released a statement Monday that read in part, “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.”


For what it’s worth, we are happy for the regulators to consider all of the ideas – both good and bad.  Our beloved interstate highway system was created in the 1950s in the name of national defense, and so we don’t fault Washington for considering investments in next-generation infrastructure for similar reasons.


About Altus


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