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5G Carriers Hoping for Handouts

The Information Technology Industry Council (ITI) published a recent report that looks at “5G policy Principles and 5G Essentials for Global Policymakers.” For those who don’t know ITI, they are a DC-based lobbying group that represents most of heavy-hitter tech firms, and which works to help shape policy on tax, trade, talent, security, access, and sustainability issues. I don’t think I’ve seen another document that so clearly outlines the hopes of the big US cellular companies.

The paper makes specific policy proposals. In the area of innovation and investment, the paper proposes that the government provide incentives for 5G research and development. It asks governments to support open and interoperable network solutions so that 5G technology works everywhere—unlike with 4G where US cellphones don’t work in Europe. ITI warns that the industry will need a lot more datacenter technicians, cloud administrators, and cybersecurity experts and asks governments to invest in workforce training. Finally, it asks for the free flow of data across borders.

In the area of 5G deployment, the report recommends freeing up more spectrum for 5G. The report also recommends harmonizing spectrum bands around the world to help make handsets universally usable. There is a recommendation to use targeted government funding to complement private sector investment in 5G. Finally, the report asks for governments to force local siting and licensing reform to speed up 5G deployment.

In the area of 5G security, the paper promotes the idea of supply chain security to ‘consider the geopolitical implications of manufacturing locations’ (keeping out the Chinese). The ITI also suggests that the government and industry must share responsibility and collaborate on security.

Finally, in the area of standards, the ITI asks that governments avoid promoting country-specific standards to promote worldwide interoperability—something we failed to do with 4G. The paper suggests that governments should encourage consistent industry engagement in worldwide efforts to create standards.

The paper is titled to suggest that it is a list of policies to be pursued globally. But once I digested all of the recommendations, it’s clear that this is a paper intended to influence U.S. policymakers. Some of the recommendations, such as pushing federal solutions to override local barriers to 5G deployment, are strictly U.S. issues. Most of the countries around the planet rely on cellular broadband as the primary source of connectivity, and in most countries, the rules are already slanted in favor of allowing wireless deployment.

If there were any doubts that this piece is sponsored by the big carriers, the paper ends with a summary of the conclusions of a 2018 report from Accenture that was published at the height of the 5G hype. That paper claims that “In the United States alone, 5G is expected to generate up to $275 billion in infrastructure investment, thus creating approximately three million new jobs and boosting GDP by $500 billion annually.”

The current reality of the 5G industry is already vastly different than that 2018 vision. Over the last few years, the big telcos have laid off many tens of thousands of workers and are heading in the exact opposite direction as suggested by the quote. In a recent blog, I noted that the cellular companies are still struggling to define an economic business case for 5G. At least for now, this doesn’t feel like an industry headed for those lofty goals.

The paper goes on to make huge claims for 5G. For instance, the paper claims that 5G has the ultimate capacity to deliver 20 Gbps broadband speeds. That’s such an outlandish claim that there is not much that can be done with it other than an eye-roll.

The paper also touts that 5G will ultimately be able to handle up to 1,000,000 separate connections to devices in a square mile from a single transmitter. If that claim was realistic, I have to wonder why the carriers are bothering to build small cells if a single cell site will have that much capacity. That paper also envisions a world where every device in our lives is connected to a 5G data plan so that we have to pay to connect devices. That ignores the reality that WiFi has already won the connectivity battle and that WiFi will be magnitudes better with the introduction of WiFi 6 and the 6 GHz spectrum band.

This is an industry piece aimed at persuading legislators that 5G is an amazing technology—the paper stops just short of claiming that 5G can leap over tall buildings in a single bound. However, most of the paper also paints a picture of an industry that wants big government handouts to achieve the technology goals. The recommendations in the paper ask for government financial help for training staff and ask for subsidized R&D. The paper also wants government help in eliminating regulation and squashing any local input into the placement of cell sites. It’s hard to understand why an industry that is going to conquer the world and create $500 billion in annual GDP, as this paper suggests, would need so much government help.

By Doug Dawson, President at CCG Consulting

Dawson has worked in the telecom industry since 1978 and has both a consulting and operational background. He and CCG specialize in helping clients launch new broadband markets, develop new products, and finance new ventures.

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