Recently, President Trump and Ajit Pai, the Federal Communications Commission (FCC) Chairman, held a news conference to announce “two new steps” that together would position the United States as a leader in deploying 5G wireless networks.
Leading in this space is critical, they claimed. Pai told CNBC that the “reliability of 5G is absolutely important, not just as a matter of national competitiveness, but also as a matter of national security.” I agree on the importance of this technological transition; where I disagree is whether the press conference helped advance American interests.
There were three distinct problems with the announcement: the steps were not new, they did not advance critical 5G deployments, and they did nothing to help American leadership in driving and benefiting from the next big transition in wireless communications.
I agree on the importance of this technological transition; where I disagree is whether the press conference helped advance American interests.
Rather, the two steps announced by Trump and Pai reflect programming already underway. The first step, spectrum auctions, consists of the government repurposing and selling spectrum. However, these specific auctions are nothing new. They have been part of a process that began in 2016 to find spectrum for next generation wireless services, with the FCC having completed its multi-year rulemaking on the spectrum bands discussed at the press conference last year.
Meanwhile, the second step that the FCC Chairman announced—to distribute $2 billion a year over ten years— does not actually create a new revenues. Instead, it simply renames a portion of the $4.8 billion a year the FCC already distributes for the same purpose.
Neither are the announcements seminal to future 5G network deployment. While the auction is a positive step, it only concerns what is referred to as high-band (or “mmWave”) spectrum. The high-band spectrum is inferior in range and penetration capability to the mid-band spectrum that most countries will use for 5G. Indeed, a recent report from the Defense Innovation Board warned that China is leading in developing mid-band spectrum. Another recent report concluded that on average, other countries will make over four times more licensed mid-band spectrum available than the U.S. by the end of 2020, with China having plans to release more than seven times more mid-band spectrum. Meanwhile, an unnamed Trump administration official aptly captured the folly of focusing on the high-band spectrum when they told a Washington Post columnist after the press conference: “So we are winning a race that no one else is running to build a 5G ecosystem that no one else will use.”
As to the use of the “new” funds, Chairman Pai said they would be distributed to providers that promise to build networks capable of delivering speeds of at least 25 Mbps up and 3 Mbps down. Those are speeds delivered today by 4G networks. 5G promises speeds 40 times faster. Whatever the usefulness of the funds to rural areas, they will have zero impact on 5G deployment or furthering American leadership in network deployment.
If the press conference were merely an exercise in political puffery, we would just laugh and move on.
Here, however, the fantasy that these actions have something to do with American 5G leadership should concern us. Next generation communications networks have important economic and security implications. The press conference provided a gauzy and false sense of security when our leadership should be providing the country a clear-eyed view of the challenge.
Next generation communications networks have important economic and security implications.
The first step, which Trump and Pai have ignored, is to clarify the key metrics for what will determine international 5G leadership. When I asked Pai that question at a conference this summer, he said (at the 20th minute), “I think the Potter Stewart standard applies, which is that you’ll know it when you see it, when you see innovation and investment being driven into 5G experimentation, when we see small cells being deployed at scale, when you see companies starting to experiment (in cities) … I don’t think there is any metric.”
There are a number of problems with that answer, but the biggest one is that you cannot lead if you don’t know where you are going. No corporate CEO would survive by telling their team or investors that “we want to lead in the industry,” and “we will know that leadership when we see it.” This directionless answer is not acceptable. Metrics are necessary for building a cohesive strategy, for setting goals and targets, and for holding any project accountable to its stated objectives. Pai’s answer, by way of contrast, calls to mind the Yogi Berra joke about driving some friends to Cooperstown and upon passing the same landmark three times says “yeah, we’re lost, but we are making great time.”
Yet even this Presidential-level event gave no more clarity around our country’s 5G leadership. Officials in Washington keep giving mountains of aspirational statements—but actual federal analysis or strategy remains absent from the conversation.
So what would national leadership look like? The answers are not simple, and there are plenty of problematic metrics to falsely judge progress.
Some might say we should lead with the biggest or the best network equipment manufacturing, but America is barely in that game, as the major players in 4G and 5G equipment are Chinese or European. In truth, manufacturing is not the most important measure here—there are plenty of other ways to thrive in the global information economy.
Others might say that leadership requires being the first to deploy, but we were not first in 4G, nor did we have the most ubiquitous deployment. When it comes to speed or price, we significantly lag our economic peers and many others.
Yet, despite lagging in those metrics, the common wisdom in Washington, D.C. is that the United States led with 4G. I agree. That 4G leadership was largely due to the United States being the home country for the winning operating systems (iOS and Android), intellectual property and chips (Qualcomm), and applications (too numerous to name). The foundational cornerstones for those achievements go back decades and involve a multitude of factors, including our government’s investments in research and development, our world leading research universities, and our advanced venture capital ecosystem. Our 4G deployments, led by Verizon and AT&T, were important late-stage pieces of that puzzle, but they were far from the most important.
So what does that 4G experience mean for the map we should be following for leadership in 5G? I hope that some future presidential or FCC press conference addresses that question—because this one didn’t. And without a better map, we are likely to run aground.