Nationalize 5G? No way, say FCC and industry officials

By Matt Hamblen

(UPDATE with Sen. Warner reaction)

Industry experts, FCC commissioners and a U.S. Senator on Monday quickly condemned a new concept by the Trump White House to nationalize  5G wireless network development.

National security officials called for the U.S. government to oversee the building and operation of a next-generation 5G network in three years, according to a memo obtained and published on Sunday by Axios.

The memo, from the National Security Council, describes the main rationale for the government control of 5G as providing national security in key technology areas such as artificial intelligence.

In the U.S., nearly all wireless networks are built and operated by the private sector. They are led by major companies such as Verizon, AT&T, and T-Mobile. All three have competing plans for building out a much-faster 5G network that would serve Internet of Things devices, possibly including sensors in self-driving vehicles.

Shortly after the memo was published late Sunday, FCC Chairman Ajit Pai and three FCC commissioners criticized the plan early Monday.

Pai flatly said in a statement he would “oppose any proposal for the federal government to build and operate a nationwide 5G network.” Pai joined two Republican appointees to the FCC in opposition, while Democrat commissioner Jessica Rosenworcel tweeted that the NSC memo “correctly diagnoses a real problem…[of] a worldwide race to lead in 5G… But the remedy proposed here really misses the mark.”

U.S. Senator Mark Warner, D-Va., reacted in an emailed statement that he was “concerned that constructing a nationalized 5G network would be expensive and duplicative” and comes at a bad time when the Trump Administration wants to “slash critical federal investment in R&D and broadband support for unserved areas.”  The key to AI leadership will depend on support for the nation’s research universities and having an immigration system that “attracts the brightest minds in the world.”

Warner nonetheless said he there are serious risks with China’s influence over the network equipment market that would serve 5G deployment. He offered to work with the Administration on a cost-effective way to address those risks.

The wireless industry association CTIA in a short statement by CEO Meredith Atwell Baker also called the 5G race a “national priority” but urged the government to “pursue.,, free market policies.”

Three industry analysts who follow 5G development also roundly criticized the NSC idea.

“It’s a terrible idea,” said Jack Gold, an independent analyst at J. Gold Associates. “When have you seen the government run a forward-looking, critically important, rapidly advancing technology program to success? If the government nationalizes 5G networks, I guarantee we will fall behind the rest of the world in technology. There is a real risk with Chinese companies talking over the supply chain for 5G and other critical tech, but nationalization is not how you deal with that.”

Added analyst Patrick Moorhead of Moor Insights & Strategy: “Historically speaking, nationalizing anything over the long run but the military hasn’t worked out.” He said the government should be restricted to building a separate network for security against hacks.

Roger Entner, an analyst at Recon Analytics, said the NSC proposal “was well-meaning, but naïve and a little detached from reality.”

A nationalized 5G network would likely bring lawsuits from cities and states, Entner said. “It would be in the courts forever.”

“Nationalizing wireless carriers has never happened and it’s the antithesis of what this country stands for,” Entner added.

Entner said the proposal also isn’t practical from a security standpoint. “The moment you connect your secure 5G nationalized network to another part of the world, you simply open it up and it can be attacked. Besides, the U.S. government has its own poor track record of cyber security.”

He recalled that the U.S. Office of Personnel Management was hacked in 2015, with the loss of more than 21 million records containing sensitive personal information. The hack was blamed on the Chinese.









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