Trump's 5G stimulus plan flush with cash... and questions

President Trump is reportedly preparing a $1 trillion stimulus proposal that would include a 5G element. But how the president doles out money for 5G remains a mystery.

Mike Dano, Editorial Director, 5G & Mobile Strategies

June 17, 2020

3 Min Read
Trump's 5G stimulus plan flush with cash... and questions

President Trump is expected to announce a $1 trillion economic stimulus plan Thursday that will include funding for rural broadband services, including 5G.

The details of the proposal, reported by Bloomberg, remain unclear. But Wall Street analysts are already speculating that companies such as AT&T (a 5G provider), CenturyLink (a fiber provider) and American Tower (a cell tower owner) ought to benefit from any increase in broadband spending.

Further, there's no way to tell whether that 5G money can be put to use immediately to counter a coronavirus-sparked recession, or if it will be hung up by the government's outdated broadband maps.

At issue are the FCC's broadband maps – currently supplied by the providers themselves – that have been widely criticized as outdated and inaccurate. The situation is so bad that Congress recently intervened with the Broadband DATA Act, which requires the FCC to improve the way its mapping information is collected, verified and reported. But the legislation only stipulates how the maps should be improved and does not provide the funding to do it.

The FCC, for its part, is moving forward with its $16 billion Rural Digital Opportunity Fund (RDOF) program anyway, despite the new legislation. The program is designed to subsidize a variety of fixed broadband access technologies, but not necessarily mobile 5G, in rural areas using the FCC's existing maps. FCC commissioners have argued that the RDOF was already in process before the Broadband DATA Act was passed, and that the fund is targeting areas of the country where its maps are not in dispute.

Mapping the 5G Fund
However, the mapping situation does appear to have tripped up the FCC's 5G Fund for Rural America, a separate subsidy program that would allocate $9 billion specifically for 5G. As noted by Multichannel News, Republican FCC commissioner Michael O'Rielly this week acknowledged the agency should wait for better maps before doling out 5G Fund money. O'Rielly joins Democrat FCC Commissioner Jessica Rosenworcel in supporting the "maps before money" position.

So how will all this impact Trump's $1 trillion stimulus plan? Based on the president's widely reported disinterest in the details of government policy, it's highly unlikely that he will weigh in on the broadband mapping issue in his stimulus proposal. But what is crystal clear is his desire to push funding into the rural areas of the country where some of his supporters live, in order to improve his reelection chances.

Thus, it's unlikely he will want to wait for the FCC to develop accurate broadband maps to accurately direct his 5G stimulus spending.

The Huawei factor
Of course, no discussion about Trump and 5G is complete without a nod to Huawei. And in this case, Trump's ongoing push against the Chinese vendor could play directly into his desire to further America's 5G interests and his reelection prospects.

The analysts at Wall Street research firm Wells Fargo wrote that the president's stimulus plan could include funding for the FCC's "rip and replace" program. That program intends to rip out Huawei's equipment from some rural wireless networks in the US and replace it with equipment from "trusted" vendors. Importantly, the program doesn't need any broadband maps to direct funding.

The FCC recently put a $2 billion price tag on its rip and replace effort, meaning it might account for only 0.2% of Trump's reported stimulus proposal. But the messaging, for Trump, appears ideal: A stimulus plan that could make the nation's communications more secure, particularly in rural areas, while concurrently creating a setback for a Chinese rival.

The whole situation brings to mind the sport of orienteering, which involves participants navigating through checkpoints using a map and compass. It's reasonable to assume Trump and his advisers could be able to use 5G, China and the recession to navigate to their own politically advantageous election-year message.

Mike Dano, Editorial Director, 5G & Mobile Strategies, Light Reading | @mikeddano

About the Author(s)

Mike Dano

Editorial Director, 5G & Mobile Strategies, Light Reading

Mike Dano is Light Reading's Editorial Director, 5G & Mobile Strategies. Mike can be reached at [email protected], @mikeddano or on LinkedIn.

Based in Denver, Mike has covered the wireless industry as a journalist for almost two decades, first at RCR Wireless News and then at FierceWireless and recalls once writing a story about the transition from black and white to color screens on cell phones.

Subscribe and receive the latest news from the industry.
Join 62,000+ members. Yes it's completely free.

You May Also Like