FCC, Lawmakers, Industry, Others Blast Trump 5G Proposal
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Monday, January 29, 2018

FCC, Lawmakers, Industry, Others Blast Trump 5G Proposal

FCC Commissioners, members of Congress, industry players and their allies, public interest advocates, and others today blasted a Trump administration proposal for the U.S. government to build a nationwide 5G network that is secure against hackers and ensures that the U.S. effectively competes against China in the Internet of things ecosystem.

The proposal is included in slides and a memo first disclosed by Axios last night. The news outlet said the documents were produced by a senior National Security Council official and were presented recently to top officials at other executive branch agencies. The plan proposes a nationwide 5G government-built network in the 3.7-4.2 gigahertz band to be constructed over three years.

But the White House stressed today that “no decision” has been made on the development of a secure 5G network.

“I oppose any proposal for the federal government to build and operate a nationwide 5G network,” FCC Chairman Ajit Pai said in a statement. “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. 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.”

“I’ve seen lead balloons tried in D.C. before but this is like a balloon made out of a Ford Pinto,” said Commissioner Mike O’Rielly. “If accurate, the Axios story suggests options that may be under consideration by the Administration that are nonsensical and do not recognize the current marketplace. Instead, U.S. commercial wireless companies are the envy of the world and are already rushing ahead to lead in 5G. I plan to do everything in my power to provide the necessary resources, including allocating additional spectrum and preempting barriers to deployment, to allow this private sector success to continue.”

“Consumers in the U.S. have benefited from the deployment of world-leading 4G networks precisely because we got the government out of the way. Any suggestion that the federal government should build and operate a nationwide 5G network is a non-starter,” said Commissioner Brendan Carr. “We will lead in 5G by reducing regulation and freeing up the private sector to invest and deploy next-generation networks. That is why we are already taking steps to ensure that our regulatory frameworks are 5G Ready.”

“This correctly diagnoses a real problem. There is a worldwide race to lead in 5G and other nations are poised to win. But the remedy proposed here really misses the mark,” argued Commissioner Jessica Rosenworcel.

“The United States’ leadership in the deployment of 5G is critical and must be done right. Localities have a central role to play; the technical expertise possessed by industry should be utilized; and cybersecurity must be a core consideration,” said Commissioner Mignon L. Clyburn. “A network built by the federal government, I fear, does not leverage the best approach needed for our nation to win the 5G race.”

Sen. Mark R. Warner (D., Va.), vice chairman of the Senate Select Committee on Intelligence who was an early investor in the wireless industry, said, “While I’m glad that the Trump Administration recognizes that maintaining American leadership in the information age requires a significant investment commitment, I’m concerned that constructing a nationalized 5G network would be both expensive and duplicative, particularly at a time when the Administration is proposing to slash critical federal investments in R&D and broadband support for unserved areas. America’s leadership in emerging fields like AI depends on supporting our nation’s research universities – and having an immigration system that attracts the brightest minds in the world – rather than rehashing old debates on construction of a standalone federal broadband network. I agree there are serious concerns relating to the Chinese government’s influence into network equipment markets, and I would look forward to working with the Administration on a viable, cost-effective solution to begin addressing those risks.”

Rep. Greg Walden (R., Ore.), chairman of the House Energy and Commerce Committee, commented on the 5G network proposal during remarks at today’s State of the Net 2018 conference (see separate stories).

He said that first learned about the issue yesterday when the story broke, and that “the first thing that came to my mind” was that in light of the Office of Personnel Management data breach, the question is whether “a government that can’t protect its own data can secure a network.”

He added, “We’re not Venezuela. We don’t need to have the government run everything.”

He said, “I get that you’ve got to have a partner” for network security, but “the government taking over and running it is not a good idea.”

He added, “It should also trouble us that the National Security Council can’t keep track of its own PowerPoints.”

Crystal Tully, Republican policy director and counsel-communications and technology for the Senate Commerce, Science, and Transportation Committee, said at the SOTN conference that the construction of a stand-alone 5G network by the government would be “extremely costly.”

Peter Rysavy, president of Rysavy Research LLC and a network engineer, said at the conference that building a separate 5G network “doesn’t make any sense,” noting the integration of 4G and 5G systems and saying, “There will be multiple 5G types of networks” using various spectrum.

During today’s White House press briefing, Press Secretary Sarah Sanders was asked about the status of a nationwide 5G network built by the government.

“Look, as we outlined in our National Security Strategy … we discussed the need for a secure network. Right now, we're in the very earliest stages of the conversation,” Ms. Sanders replied. “There are absolutely no decisions made on what that would look like, what role anyone would play in it; simply, the need for a secure network. And that is the only part of this conversation that we're up to right now.”

As whether there would be one network “or multiple possibilities,” she added that “there are a lot of things on the table. Again, these are the very earliest stages of the discussion period, and there's been absolutely no decision made other than the fact the need for a secure network.”

The National Security Strategy released by the administration last month (TR Daily, Dec. 18, 2017) said, “We will improve America’s digital infrastructure by deploying a secure 5G Internet capability nationwide. These improvements will increase national competitiveness, benefit the environment, and improve our quality of life.”

The Trump administration documents propose that the U.S. government build the 5G network in the 3.7-4.2 GHz band, which is the C-band heavily used by satellite operators. The documents argue that this will ensure a secure network can be built and that the U.S. can lead the world in IoT. They say that China is poised to lead the world in 5G deployment and they express concern about that country’s dominance in the development of networks. The proposal suggests the standardization of siting restrictions so the network can be built in three years, which it says is faster than companies plan to do, although that’s not correct as carriers plan to begin rolling out some 5G services this year and widespread deployment is expected by 2020. An alternative proposal would involve carriers building their own 5G networks in the mid-band spectrum on 100 MHz blocks. The documents say that even if the government built a network in the mid-band, carriers could operate their own networks in high-band spectrum.

“It is necessary and possible to build a secure, high-performance, world-leading 5G network platform by the end of the first term,” the memo concludes. “Covering the Top XXX metro areas in the country, this platform will enable higher-order innovation on a scale that no other country is currently planning towards. In order to do so, USG must provide clear direction and strong leadership. The best network from a technical, performance and security perspective will be single block, USG secured, and have the highest probability for project success. Still achievable, but with more risk to cost and schedule are multiple carrier built and secured networks. To ensure success, we must move quickly to make 3.7-4.2 GHz spectrum available. We must move quickly to standardize the wireless, network and infrastructure standards. We must standardize siting requirements and advance the nationwide deployment of fiber. We must strongly signal to equipment manufacturers our intent to build a secure supply chain. For the greatest effect, we must elicit allies to cooperatively build similar networks in their countries and work together to build them in emerging markets. If we do, the U.S. will reap the benefits of 3% GDP growth, millions of new jobs and a dominant position in the Information domain.”

In addition to FCC Commissioners and members of Congress, the proposal was panned by a number of other parties.

“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 Chief Executive Officer Meredith Attwell Baker.

“Competitive carriers work to provide the latest mobile broadband services to their customers. The private sector driven by competitive energies and furthered by government support, only when necessary, is the best way to maintain the global lead in 5G innovation. Building on this concept, competitive carriers are best positioned to deliver 5G, especially in rural America. We commend federal government support to accelerate the advancement of private sector efforts to deploy next-generation technologies,” said Steve Berry, president and CEO of the Competitive Carriers Association.

Jonathan Spalter, president and CEO of the U.S. Telecom Association, said, “There is nothing that would slam the breaks 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. The best way to future-proof the nation’s communications networks is to continue to encourage and incentivize America’s broadband companies – working hand-in-glove with the rest of the internet ecosystem, and in partnership with government, to continue do what we do best: invest, innovate, and lead.”

“The wireless industry in the U.S. has designed and deployed mobile networks that are the envy of the world. These networks have been conceived, financed and managed by private industry,” noted Jonathan Adelstein, president and CEO of the Wireless Infrastructure Association. “In order to maintain our leadership in wireless communications at this pivotal time and to usher in new 5G technologies, we need to encourage more private investment into building out mobile networks through rational policies that affect the siting of vital wireless infrastructure.”

“We can’t comment on something we haven’t seen,” said AT&T, Inc. “But, thanks to multi-billion dollar investments made by American companies, the work to launch 5G service in the United States is already well down the road. Industry standards have been set, trials have been underway since 2016, and later this year AT&T is set to be the first to launch mobile 5G service in 12 U.S. locations. We have no doubt that America will lead the 5G revolution.”

Robert McDowell, chief public policy Adviser for Mobile Future, said, “America’s private sector built the world’s best 4G networks in record time and we will do the same with 5G. The private sector will spend nearly $300 billion in risk capital over the next decade, but it can only do that within the right regulatory environment. Mobile Future looks forward to engaging with policymakers to help craft a pro-innovation legal and regulatory construct that will provide the best incentives for continued private investment to deliver the incredible mobile future that is being built today.”

“The proposal vastly underestimates the use of the C-Band and the challenges of moving existing users to alternate systems,” said Tom Stroup, president of the Satellite Industry Association. “I strongly encourage anyone who envisions using that band to look closely at the comments filed in the FCC’s Mid-Band NOI by the programmers, broadcasters, and cable companies who depend on this band for distribution and receipt of programming. They make clear that their use of satellite services is not diminishing and they do not have access to alternate means of delivery.”

The Internet Innovation Alliance said, “Over the past 20 years, private sector network operators have invested hundreds of billions of dollars in building the wireless networks that have transformed how Americans work and live. As recent announcements from major network operators have shown, they are once again on the cusp of investing hundreds of billions of dollars more over the next decade to bring Americans the benefits of next-generation 5G networks, which will enable the Internet of Things and ever-faster communication. There is a global race to deploy 5G and to determine the standards by which that system will be deployed. As Commissioner Rosenworcel stated, in the current environment, ‘other nations are poised to win.’

“As we have long argued, for America to preserve its global leadership in telecommunications, this type of investment can only come from the private sector,” IIA added. “Only the private sector, not government, can ensure the fastest and greatest possible deployments of new broadband technology in a way that will benefit all Americans. As Chairman Pai observed, ‘[t]he 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.’ We agree: to promote innovation and investment in the broadband future and to maintain American global leadership in telecommunications, the way forward is through encouraging the private sector, not government control of networks.”

“TrumpNet would be the worst idea in the history of the Internet,” said TechFreedom President Berin Szóka. “What’s made the Internet great isn’t ‘moonshots’ or ‘inspired leadership’ from Washington — it’s private companies experimenting with multiple technologies, competing with each other to win over customers markets that don’t yet exist, and investing more capital than any other sector of the economy by leaps and bounds. Nearly a third of the $1.6+ trillion in private capital spent building out the physical infrastructure of the Internet has been spent on wireless networks. That dynamism has made us the world leader in 4G deployment. We won’t stay on top by throwing away our playbook and stealing China’s.”

Lawrence Strickling, the former head of the National Telecommunications and Information Administration who’s now with the Internet Society, said at the SOTN conference of the proposal, “It sounds like an intern project.”

Steve DelBianco, president and CEO of NetChoice said at the conference, “All of the stakeholders in that process would make a lot of noise” over such a proposal.

“There already is a standard for siting: minimizing the disruption to the neighbors of the device. And it’s working,” Gerry Lederer, an attorney for Best, Best & Krieger LLP who represents local governments, told TR Daily. “Otherwise how could we lead the world in wireless broadband deployment as the three majority members of the FCC were quick to point out in their statements. What we really need is a ‘national recognition’ that taking away the siting protections for urban and suburban neighborhoods will not result in service being extended to rural America. For that is the fiction that the industry, and some in government, want us to accept.”

“I cannot think of a worse idea for national security or for the economy than for NSC to take over our wireless networks,” said Harold Feld, senior vice president of Public Knowledge. “That said, it is important to ask why NSC thinks this is necessary. The FCC is the agency that is charged with making sure our communications networks are the best in the world. If we have problems with cybersecurity or if we are falling behind China, we need the FCC to step up and do its job by identifying what the problems are and what needs to be done. Reports designed to show the wisdom of deregulation, rather than designed to identify real concerns, help no one.”

“While this plan has a number of political and execution risks, and it is months away from obtaining Presidential approval, the existence of the plan means that all investments in incumbent ISPs are a bet on whether, how and to what extent, the plan succeeds,” said a research note by New Street Research LLP. “From an investment perspective, the initiative carries the risk that it would significantly commoditize the delivery of bits, providing an advantage to those with better brands and marketing abilities, while taking certain advantages away from those who today enjoy a market edge due to their superior, existing networks. It also means that the current plans of the incumbent carriers to invest in next generation networks have to be reconsidered to consider the risk of government activity in space.”

Walter Piecyk, an analyst at BTIG LLC, said in a blog posting, “It does not appear likely to us that this recommendation could be accepted or evolve as [a] government program that would be implemented as described.” He added that the plan “appears aggressive and optimistic” due to, among other things, the length time it takes to use spectrum.

“The development and deployment of 5G services in the U.S. is important to the future of communications and commerce, and of course security will be a key factor that must be addressed in the design of the service. But the concept that the federal government would build and operate a national 5G network that was reported last night by Axios seems highly unlikely to occur in our opinion,” analysts at Raymond James and Associates, Inc., said in a research note. —Paul Kirby, paul.kirby@wolterskluwer.com; Lynn Stanton, lynn.stanton@wolterskluwer.com

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