Earlier this month, President Trump and Federal Communications Commission (FCC) Chairman Ajit Pai held a press conference in the White House affirming the administration’s commitment to a fast rollout of advanced wireless networks known as “5G.” Among the announcements at the press conference on April 12 was that the FCC will hold the largest spectrum auction in US history to bolster 5G deployment, as well as allocate $20.4 billion to the “Rural Digital Opportunity Fund” fund to increase broadband access in underserved communities.
This press conference is a sign of relief for free-market advocates, as rumors of a plan to nationalize 5G have persisted in the media for years. The Trump administration should be steadfast in its commitment to market principles in the deployment of this next generation technology.
The Leaked Memo
In early 2018, a leaked memo from the National Security Administration called for nationalizing 5G as a means of competing against China. Such security scaremongering has bubbled up every few months since, most recently in a push by Trump 2020 campaign manager Brad Parscale and adviser Newt Gingrich. However, a new report by the wireless trade association CTIA suggests that the United States is in a strong position to be a leader in 5G deployment.
According to the report, the US is now tied with China for first in “5G readiness,” a welcome sign compared to last year’s rankings:
[T]he US has moved from third position to joint first, reflecting industry commitment for early 5G launch being carried through, alongside progress on the government side in the assignment of high-band spectrum as well as the implementation of policies to reduce 5G infrastructure deployment.
This is not to say that more cannot be done. In the coming years, additional government auctions of additional spectrum will be critical for the wireless technology to be viable. Moreover, state and localities in many cases have slowed the deployment of 5G through red tape and charging exorbitant fees for small cells, wireless transmission systems that will enable widespread 5G access. The FCC must continue its work of updating regulations to ensure a competitive marketplace.
The Free Market
Yet the marketplace should remain the system to deliver 5G. As the Mercatus Center’s Brent Skorup points out on the Tech Liberation Front, the federal government’s prior precedent for nationalizing emerging technologies is not something to repeat. In 1927, Washington nationalized all spectrum and allocated bands at a snail’s pace for decades. It was not until 1994 that spectrum auctions were introduced to add some market forces to the industry, facilitating much of the great technological innovation we’ve seen over the past two decades.
Let’s hope that Washington doesn’t make the same mistake it made nearly a century ago by re-nationalizing spectrum to act as a wholesaler for 5G commercial use. President Trump was absolutely on point when he said at the press conference,
In the United States our approach is private-sector driven and private-sector led… Leading through the government, it won't be nearly as good, nearly as fast.
The US can be the world leader in 5G deployment with a free-market approach, as it has in so many other industries throughout history. American innovation can only be fully realized when the government lets entrepreneurs take the lead in realizing technology’s potential.