Earlier this week it came out that the Trump administration had been mulling the idea of building national, government-owned 5G wireless infrastructure. The news site Axios came into the possession of a PowerPoint presentation detailing the fears of the United States falling behind China in 5G cellular technology and how it could catch up.
The article produced quite a bit of discussion online, and likely quite a bit more offline. One company owner we talked to said he was at a telecom conference in Florida Tuesday where the proposal came up and was roundly laughed at. On Monday, the chairman of the FCC, Ajit Pai, came out with a statement strongly rebuking the idea.
All of this got us wondering, why do people think it’s a bad idea? And are they right? So we called up some experts in the field and asked them: What are the pros and cons of having the government build a national 5G network?
Here’s what they said.
Our networks actually are vulnerable to foreign actors like China
One of the main points of the PowerPoint in question was that our networks are vulnerable to attacks from China. According to Axios, the presentation was created by a senior National Security Council official.
They’re…not wrong about that, explained Daniel Kahn Gillmor, a senior staff technologist for the ACLU.
“The risks to the country of control by the network operator are real,” he said by phone Wednesday. “The fact that your hardware vendor has leverage over you is real. And the fact that there are people who want to take advantage of you, whether inside the U.S. government or outside of it are real. So I think the premises of the proposal are legit.”
Much of the hardware we use is, from consumer phones to industrial networking equipment is, in fact, made in China, he noted. Just as our government’s National Security Agency works to install backdoors into hardware and software for intelligence purposes, as through the Office of Tailored Access Operations, so too, do other governments work to infiltrate our networks for information.
One way a nationalized 5G network could be useful in stopping that information gathering is by having centrally-planned network upgrades, in the same way the government did with the switch from rabbit-ear to digital television a few years back.
It’s a public good
Governments have routinely been the provider of infrastructure, rather than private corporations. Our roads were built by the government, as were the pipes beneath them. So could internet access be considered to exist in the same category as transportation and water?
“I think the economics of it are reasonably clear,” explained professor Yehuda Klein, the chair of the economics department at Brooklyn College, agreeing that 5G fits the bill for a public good. “Basically the notion of a public good in economics is that if I use one more unit of a good, it doesn’t infringe on my neighbor’s ability to use it also. If I go to the store and buy a dozen eggs, no one else can eat those eggs. But if I turn on a radio broadcast, my listening doesn’t prevent anyone else from tuning in or 100,000 people from tuning in.”
Because of the lack of scarcity, private corporations tend to be less efficient in providing the public with public goods, he explained, because it’s harder to make a profit on them.
“One traditional way is to have a government provide it,” Klein said. “It’s not the only solution, but it’s one solution.”
Gillmor agreed that 5G is a public good. Both he and Klein made the point that as the internet becomes faster on mobile, 5G cellular data will effective become the internet simply because it will be the best choice.
“I don’t think there’s a problem with governments running roads or sewer systems, and I see modern internet access as a utility,” Gillmor said.
It will be more equitably available in the absence of a profit motive
Another argument is that a state-run 5G network will include populations that would be unprofitable for private companies to include in the network.
“We’re dealing with a good the urban poor and rural communities would be excluded from unless the government provides it,” Klein said.
I oppose any proposal for the federal government to build and operate a nationwide 5G network. The market, not the government, is best positioned to drive innovation and investment. https://t.co/viIDB4mb0f pic.twitter.com/hgxRLtwoU4
— Ajit Pai (@AjitPai) January 29, 2018
The private market will build a better system than the government
But others argue there’s plenty of profit to be made and it isn’t a public good. In fact, it does cost money to produce bandwidth for people. Lots of it. T-Mobile spent $8 billion on an auction for 5G bandwidth space last year, Verizon bought a company with space on the 5G spectrum for more than $3 billion last year, and much more spending is expected in the future. As internet has become the backbone of so much work and productivity, access to it is super valuable in the marketplace.
“I oppose any proposal for the federal government to build and operate a nationwide 5G network,” the FCC’s Pai wrote 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.”
These systems are also super complicated, and private industry has been working on the problem for years, explained NYU Wireless’s Sundeep Rangan by email Tuesday.
“Cellular systems are extremely advanced and the technological innovation requires that there is private incentive and competition,” the associate professor at NYU’s Tandon School of Engineering wrote. “Vital to maintaining this leadership position for 5G is that we sustain a rich, competitive landscape of top-tier operators competing to deliver the best services to users. Efforts to centralize or nationalize this would undermine such incentives to continue to lead.”
Click-through for my 4-part thoughts on a government-run, centralized 5G network as proposed in a Trump administration memo leaked today. https://t.co/RZRy5I4Uz8
— Daniela Perlein (@danielaperlein) January 30, 2018
A national network could allow for more government surveillance
As the ACLU’s Gillmor noted, the holders of the wireless networks have a lot of power over the information transmitted through them. Do we want to hand over more of that data to the government?
“The memo’s focus on national security to me reads as a euphemism for even more built-in surveillance (though you could argue it can’t get much worse than it is),” Brooklyn startup founder Daniela Perdomo tweeted Monday. “I need to know a lot more about the fine-print, before giving this the benefit of the doubt, especially with Pai.”
Federal agencies have not always been forthcoming in the amount or specificity of the data they collect. It took whistleblower Edward Snowden to reveal to the public the extent of the effort programs like PRISM went to.
“One concern is that if the government is running the infrastructure it gives them more access to what users are doing and puts more surveillance data at their fingertips,” Gillmor said. “The government does have constitutional constraints in what it can do. The fact that the government runs the networks shouldn’t mean that it turns around and does massive surveillance on its citizens. But there is that capability there.”
It wouldn’t actually lead to more equitable availability
According to the Axios story, the NSC really had two pathways a national network could go down. One was a state-built and state-run network and one was a state-built but privately-run network. That second option could suffer from the same profit motive exclusion of poor rural and urban communities that a private network would.
“In theory, treating 5G as a public utility could be great,” Perdomo wrote on Twitter. “In practice, however, the memo shows this will still be rented out to the same deep-pocketed carriers who have shown little/no capacity to use spectrum efficiently. Barriers to entry will remain high for new entrants.”
Private companies have already started building it
Brooklyn broadband providers Skywire have done a lot of work wiring buildings in Brooklyn with wireless internet. Its founder, Alan Levy made the point that private industry has already spent a ton of time and money working on 5G, and it would be a total waste to have the government start over.
“Individual companies spent billions of dollars on the spectrum,” Levy said by phone Wednesday morning. “That’s how they’ve built these cellular networks, and these bands of the spectrum were auctioned off by the government, which has made billions from them. So that money has been expended and these networks are beginning to be deployed. That would certainly seem to be unfair and really inefficient.”-30-