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Mythbusting on the DoD's Proposed Nationalization of 5G

The race to roll out the fifth generation (5G) of mobile technology has been raging for quite some time. As with just about everything, America is playing and is playing to win. The good news is that we’re doing rather well. The Federal Communications Commission (FCC) has freed up more spectrum for private use and innovation than ever before. Speeds are up and prices are down.

The bad news, however, is that the U.S. seems intent on emulating the Chinese wholesale model, essentially creating a nationalized framework (whether proponents label it as such or not). People who should know better, like former Speaker Newt Gingrich, have derided the “laissez-faire tendencies” of the current market. However, it is the very same light touch framework that allowed the internet to thrive in the first place that will let it succeed into the future.

The Department of Defense (DoD) has now put out a request for information inquiring about the feasibility of the government owning and operating a 5G network. This is an abandonment of the successful free market approach and is, in no uncertain terms, a nationalization of a private industry. Liberty loving conservatives everywhere should be immensely concerned.

The arguments in favor of such a nationalized network do not even hold water. Perhaps that’s why proponents have played this relatively under the radar. So, let’s bring them into the light and do some mythbusting.

Myth: A 5G Wholesale market would drive down costs.

Fact: Costs are not rising and the private sector is already driving costs down. Research shows that “Americans are paying less in 2020 for broadband services that are significantly more capable than in 2015. [The] most popular tier of broadband service costs 20.2 percent less and is 15.7 percent faster in 2020 when compared to 2015.”

Myth: Existing lack of coverage is a national health emergency and we are losing badly to China.

Fact: The U.S. has spent over 100 billion dollars deploying 5G networks and regulatory rollbacks by the FCC under Chairman Pai have only accelerated that process. These private companies have more expertise than political bureaucrats in DoD, who would assuredly reverse that process.

According to a 2019 report from the research firm Analysys Mason, the U.S. “is tied for first with China in global 5G readiness.” There is no evidence whatsoever to suggest an unproven approach would give the U.S. the step up it needs.

Myth: This plan is better for rural America than the existing strategy.

Fact: The wholesale plan does not address the underlying reason (high cost) for relatively low buildout in rural areas. There is a very high cost of entry in rural markets. Switching approaches does not change that reality.

FCC deregulation, satellite launches, and its TV Whitespace order will free up resources to create services that cover the whole of America.