5G 'Race' Continues to Dominate US Policy Discussions

Mike Dano
4/5/2019
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WASHINGTON -- The US is in a "race" against other countries -- particularly China -- to lead the development of 5G technology, and hanging in the balance are hundreds of thousands of American jobs and billions of dollars in opportunities.

At least, that's the argument that US policy wonks continue to push as they orbit the Trump White House. Their goal, of course, is to obtain regulations from Congress and the administration that are favorable to wireless network operators and their associated suppliers.

Those efforts were on full display here during CTIA's third annual 5G policy event. CTIA, the US wireless industry's trade association, managed to reel in a veritable who's who of top US wireless executives to its event this year, as well as the head of the FCC and President Trump's main economic advisor.

Virtually every speaker at CTIA's event managed to echo the association's main talking points: China will beat the US in 5G unless the government releases more spectrum and makes it easier for operators to deploy small cells and other equipment.

Oh, and a government-run 5G network isn't a good idea. More on that later.

Kicking off CTIA's day-long 5G event was the association's CEO, Meredith Attwell Baker, who pointed to data from Analysys Mason that found that the US is tied with China in first place in "global 5G readiness." The CTIA commissioned the report and it dovetails perfectly with CTIA's lobbying efforts.

The Analysys Mason report's timing is interesting -- Verizon this week battled operators in South Korea for the claim of "first in the world" with 5G. Meantime, China Mobile started 5G trials in Shanghai's Hongkou district; the city plans to build over 10,000 5G basestations by the end of this year, growing to 30,000 in 2021, according to local reports.

Back at the dais, T-Mobile's Neville Ray warned of the "Chinese machine" that coordinates the Chinese government with Chinese wireless network operators to deploy 5G on a scale both speedy and massive. And Sprint's Michel Combes warned that "the rate that China is densifying its network is mind-blowing."

T-Mobile and Sprint have also leveraged the US-China 5G race as one of their main merger talking points. They've generally argued that regulators should approve their proposed combination because the "New T-Mobile" it will create will deploy 5G more quickly than the two companies could separately. The analysts at MoffettNathanson just last week lowered their odds of government approval for the T-Mobile-Sprint deal to just 33%, down from 50%.

Nonetheless, the US-China 5G race theme narrative crept into nearly every session at CTIA's event, from Niklas Heuveldop's presentation for Ericsson to Mo Katibeh's keynote for AT&T. The US was an early hotspot for 4G LTE networks, the argument goes, and partly as a result helped foster domestic innovations ranging from Google's Android to Uber's ride-sharing service. (Speakers also noted that "limitless" US venture capital certainly helped.) If the country lags in 5G, those kinds of (heretofore unseen and impossible to predict) innovations might happen elsewhere.


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And here's where CTIA's sales pitch comes in: "The biggest deficiency is mid-band spectrum," CTIA's Baker argued. She said the global rivals of the US have four times the amount of mid-band spectrum that US wireless providers do, which will help them deploy 5G faster. She called mid-band the "Goldilocks" of spectrum bands because it toes the line between providing adequate coverage due to its propagation characteristics while also being capable of transmitting large amounts of data.

Baker specifically pointed to the 500MHz between 3.7GHz and 4.2GHz -- the C Band -- as ideal mid-band spectrum for 5G. The satellite companies currently using the C Band want to sell a portion of the band directly to wireless network operators, but the CTIA wants the FCC to step into the issue and conduct a standard auction of C Band spectrum licenses.

In a brief session with CTIA's Baker, FCC Chairman Ajit Pai said his agency would continue to work to smooth the deployment of 5G across the country. "We want the United States to be a haven for creation and investment," he said, to applause from the mostly pro-wireless industry audience at the event.

But Pai stopped short of saying exactly when and how the FCC might rule on the C Band, noting only that the agency would decide on the band sometime in the "near future." He provided no other details. But Pai did point out that the FCC expects to conduct 3.5GHz CBRS auctions in 2020, and is also working on freeing 2.5GHz spectrum through an auction at some point.

Pai's C Band comments seem at odds with recent statements from FCC Commissioner Brendan Carr, who said that "I think we can do better" than the satellite companies' proposal to free up 200MHz of the 500MHz C Band. "We think Carr's statement will generate some momentum for other proposals (such as from T-Mobile and cable operators) that argue they could produce more spectrum and put pressure on the CBA [the satellite companies' C Band Alliance] to rework its proposal to produce more spectrum more quickly," wrote the analysts at Wall Street firm New Street Research in a recent note to investors.

Mid-band spectrum was certainly at the top of the CTIA's agenda for its 5G day, but it wasn't the only topic under discussion. Several speakers alluded to the possibility of a nationalized 5G network -- a proposal that has been circling the Trump White House since President Trump took office. Both Pai and Larry Kudlow, the director of Trump's National Economic Council, specifically spoke out against the notion of a nationalized 5G network. "I don't want the government to run this," Kudlow said, making it clear that "free enterprise" and "private companies" would be left to build 5G networks in the US.

However, Kudlow hinted that Trump might take some action to encourage the rollout of high-speed networks in rural areas, though he didn't provide any details. And he also sounded an alarm on the topic of standards setting: "I don't want certain countries to run away with certain standards," he said, without naming China specifically. He didn't provide details on that topic either.

Nonetheless, Kudlow's comments on standards appear to align with the Trump administration's efforts to prevent Chinese equipment suppliers like Huawei from selling gear to US companies and US allies.

Other topics that floated into CTIA's event included:

  • Cell site permits. Although the FCC has issued guidelines on the topic, and more than 20 states have inked small cell deployment legislation, carrier executives at the event said it's still difficult to obtain the necessary permits for those kinds of deployments.
  • Network security. Qualcomm's Cristiano Amon said that "the surface area for cyber attacks is much bigger" in 5G when more devices are connected to the Internet. He said that "we have more work to do in that area."
  • 5G-ready laws. Nokia's Mike Murphy said that some countries, such as Finland, have laws that require municipalities to deploy fiber when they repave roads, install new piping or conduct other work. He said the US should consider similar legislation.

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

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