James 'Spider' Marks

The next generation of telecommunications, or 5G, is taking shape. The United States is going toe-to-toe with China in this high-stakes competition, with government policies encouraging multi-billion-dollar investments by leading U.S. companies that will usher in revolutionary changes in how we use technology to work, learn, travel, manage health and simply stay in touch with people.

At this crucial juncture, the federal government needs to continue to facilitate this process with spectrum auctions and close the digital divide, but it should not step in suddenly to take over the creation or operation of a national 5G network.

There is no reason to assume the government would do a better job than the private-sector carriers operating mobile networks for years. In fact, a failed effort by Mexico, a rather low bar of government transparency and effectiveness, illustrates how the opposite is true.

In 2014, the Mexican government decided to curb the monopoly power of América Móvil, the company controlled by tycoon Carlos Slim, and introduce more private-sector competition. The plan was to create a wholesale wireless mobile network with government backing and open up competition among companies building 5G network capacity at the retail level. The plan quickly ran into trouble.

Mexico’s pick to create the wireless network at the wholesale level was a company called Altán Redes. It turns out the company had many financial problems and came under attack from rivals for possible improper practices. By 2018, Altán Redes was insolvent. Even with millions in government subsidies, the company had to renegotiate contracts and restructure debt, creating uncertainty and confusion. Instead of having 21 million new subscribers by 2021, as planned by the government regulator, there were a mere 6 million new subscribers by mid-2022.

The government stepped in to fix the mess but at the cost of hundreds of millions of dollars in debt flung onto the shoulders of Mexico’s taxpayers. Who knows what was really fixed.

Advocates for a government 5G regime say it is essential for U.S. economic and national security. Former Google head Eric Schmidt argues that this approach is essential to compete with China, but we don’t beat China by becoming more like them. Before we rush in to try to replicate China’s statist model, let’s remember that it was the U.S. private sector that gave us the most advanced telecommunications networks in the world. In addition, government-operated 5G raises concerns about the government hoarding spectrum instead of freeing it up to established players. As with other sectors, we can count on more agility in 5G networks operating with the principles of market-based competition than a network micro-managed by battalions of bureaucrats.

As for national security, a nationalized network is far more vulnerable to disruption and penetration. By keeping U.S. wireless networks diversified across a wide range of private-sector participants and across multiple carriers, we will make it harder for bad actors to sabotage 5G telecommunications nationwide.

A government-run 5G network also raises concerns about increased surveillance by a government with enormous amounts of personal information and a mixed record of demonstrating keeping that information secure.

A report from the Center on Strategic and International Security summed it up nicely: The goal for a 5G strategy is to ensure that the United States can maximize economic returns while minimizing national security risk.

The Infrastructure and Jobs Act enacted late last year will advance the construction of the physical infrastructure at the foundation of 5G technology and enable Americans, especially in rural and low-income communities, to access and afford broadband internet service. Meanwhile, the government raised $100 billion by auctioning spectrum to sector actors best able to deploy the equipment and technology to keep the United States at the forefront of the 5G revolution. Let the auctions continue!

America’s 5G march will be severely hindered if the government intends to build and maintain a network serving hundreds of millions of consumers and billions of connected devices. It will be both inefficient and ineffective. Let’s not break what isn’t broken or waste billions by handing over 5G to the government. Competition drives us.

James “Spider” Marks is a strategic adviser for Grow America’s Infrastructure Now Coalition. He wrote this for InsideSources.com.