Pai, Others Slam National Security Council Proposal for National 5G Network
All five FCC commissioners, other officials and industry slammed a memo by a “senior National Security Council official” proposing the U.S. build a national 5G network, selling access on a wholesale basis to carriers. Axios published the leaked memo Sunday. Monday, FCC Chairman Ajit Pai said it's a bad idea. The memo compares 5G to the push under President Dwight Eisenhower to build a national highway system in the 1950s and warns that China could otherwise build a network first.
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Julius Knapp, FCC Office of Engineering and Technology chief, questioned whether a separate 5G national network makes sense. “It’s a little bit of a misnomer to talk about 5G as a separate network because 5G basically will be integrated with all of the existing networks,” he said at the State of the Net conference. “This would not be, from a technical standpoint, something you build as a separate network and still have it be viable.”
The White House is “in the very earliest stages of the conversation” about how to secure 5G, Press Secretary Sarah Huckabee Sanders said during a briefing Monday. President Donald Trump's administration mentioned 5G deployment in its December National Security Strategy (see 1712270032), but “there are absolutely no decisions made on what that would look like, what role anyone would play” except that 5G needs to be secured, Sanders said. “And that is the only part of this conversation that we're up to right now.”
The memo appears tied to fear that Huawei is going to take over the 5G market because its existing captive market in China will help it develop equipment cheaply before U.S. networks are deployed, Public Knowledge Senior Vice President Harold Feld told us. “It is clear that those who formulated it view the current marketplace as an inefficient adverse set of conditions to overcome. The name of the report is ‘The Eisenhower National Highway System of the Information Age,’ which tells you a lot about how they are thinking about it.”
“The main lesson to draw from the wireless sector’s development over the past three decades -- including American leadership in 4G -- is that the market, not government, is best positioned to drive innovation and investment,” Pai said. The other Republican commissioners, Mike O’Rielly and Brendan Carr, also slammed the plan (see here and here).
“Localities have a central role to play; the technical expertise possessed by industry should be utilized; and cybersecurity must be a core consideration,” said Democratic Commissioner Mignon Clyburn. “A network built by the federal government, I fear, does not leverage the best approach needed for our nation to win the 5G race.” The administration "correctly diagnoses a real problem,” tweeted Commissioner Jessica Rosenworcel. “There is a worldwide race to lead in #5G and other nations are poised to win. But the remedy proposed here really misses the mark.”
Walden Knocks
House Commerce Committee Chairman Greg Walden, R-Ore., “didn't know” before about the draft and said it's not “in the best interest of the kind of culture and economy we have here that believes in capital investment from the private sector” to pursue nationalization of the 5G network. “We're not Venezuela,” he said at State of the Net. “We don't need to have the government run everything as the only choice.” It didn't appear the proposal reached a stage where "the White House had a position," he said, and "I have every confidence" that the FCC, NTIA and others "would have weighed in at the proper time."
Walden acknowledged the need to “make sure these networks are safe and secure. We know there are bad actors out there” but nationalization “is clearly not the way to go.” He invoked the 2015 breach of sensitive Office of Personnel Management records of 21 million people, saying “a government that can't protect the data of its own employees, I just struggle with the notion that it's going to run a complete architecture and network that will be hack-free.”
Trump “made it clear [in 2017] that 5G network security is a critical element of our national security,” NTIA Administrator David Redl said at the event. “With the proliferation of devices that the Internet of Things is bringing, security both in the device and in the network itself will be important to ensuring not only our national leadership in wireless, but also to ensuring access to a vital part of our national economy.” NTIA “will continue to work with our colleagues across the federal government to coordinate a national strategy on spectrum access and will work the private sector to ensure that the standards process for 5G wireless services continues to promote our national interest in security,” Redl said.
Redl didn't respond to reporters' questions on the recommendations or other issues (see 1801290041). Former NTIA Administrator Larry Strickling said during the event he was loathe to comment based on the leaked draft but quipped it “sounds like an intern project.”
The new 5G networks will in many cases be “a layer for capacity​ that will integrate with the underlying 4G networks,” said Peter Rysavy, president of Rysavy Research, at the conference. There are multiple 4G networks, he said. “Having a single 5G network that integrates with all the existing networks doesn’t make any sense.”
New Street’s Blair Levin said the plan, if it moves forward, raises many questions for the industry. “As long as the market believes that the initiative has a material chance of proceeding, the volatility in the sector may be significantly greater than it has been in the past and just as in the post-1996 climate, investors will have to pay more attention to otherwise obscure D.C. proceedings,” said Levin, FCC chief of staff when much of the 1996 act was implemented. “It does not appear likely to us that this recommendation could be accepted or evolve as government program that would be implemented as described,” said Walter Piecyk, analyst at BTIG. “Pai has already come out against the reported proposal.”
Telecom industry groups criticized the idea. “The wireless industry agrees that winning the race to 5G is a national priority,” said CTIA President Meredith Baker. “The government should pursue the free market policies that enabled the U.S. wireless industry to win the race to 4G.”
“The private sector, driven by competitive energies and furthered by government support, only when necessary, is the best way to maintain the global lead in 5G innovation,” said Steve Berry, president of the Competitive Carriers Association.
USTelecom President Jonathan Spalter said the proposal would be harmful to competition. “There is nothing that would slam the brakes more quickly on our hard-won momentum to be the leader in the global race for 5G network deployment more quickly than the federal government stepping-in to build those networks,” he said. The Wireless Infrastructure Association also criticized the plan.