A recently leaked report reveals the Trump administration may nationalize the 5G network in order to make America more competitive against rising Chinese dominance in network infrastructure.
On a recommendation from the National Security Council, the Trump administration is considering using federal money to build a 5G network, or fifth generation wireless network. The leaked internal memo also urges the Trump administration to consider extraordinary efforts to not only clear the way for the new technology, but to actively aid in building it. The memo suggests that a nationalized 5G network would counter the economic and political threat from China's aggressive efforts to develop 5G capabilities.
Although senior officials denied the report, they confirmed that America needs a way to secure its dominance as a world leader in internet technology, and that creating a 5G network is crucial in having a competitive advantage over China and derailing any attempt at Chinese espionage within U.S. borders. Many officials fear China could dominate the technology and pose a threat to American businesses and their operations.
The need for a 5G network is not disputed. The most significant competitive advantage comes from 5G's capability of providing the underlying architecture of the global information economy. The 5G network could serve as a catalyst to technological progress. A 5G network would offer faster speeds for browsing and streaming over mobile phones, along with expanded capacity that could accommodate emerging technologies such as self-driving vehicles and the internet of things, where all sorts of machines and appliances, such as refrigerators, cars, and health monitors, would connect to the internet with nearly zero lag time. If China were to lead the 5G network, they would take over the market and put all other non-5G networks out of business, posing a threat to U.S. classified information.
But there are practical limitations that might make it difficult to nationalize the development of the 5G network. And some industry leaders are bristling at the Trump administration's suggestion of government involvement.
The primary problem, according to officials working on the White House's 5G plan, is that the U.S. is incapable of building such a national network due to various factors, including an effective oligopoly among telecommunications and cable companies, tight regulations, and the lack of indigenous manufacturers.
The White House's main concern is timing and how fast America can roll out a 5G network ahead of China's rapidly moving development. The administration must consider its role as a capitalist economy, allowing businesses to flourish without government involvement, or take a high-stakes risk in an unfamiliar market that could be costly and inefficient to the public.
The telecommunications industry is a largely private interest. Government entry into the industry would be unprecedented. Opponents of the Trump administration's proposal think such a move would be ill-advised, and that the industry should be left alone to tackle the development of 5G. It is indeed already well into creating an American 5G network. Government involvement could potentially hurt both the private sector and the economy overall. The industry has already proven that it can be a leader in network development, based on the creation of the first 4G network. AT&T (NYSE:T) and Verizon (NYSE:VZ), for instance, are gaining momentum in the global race for 5G. Both companies are set to launch mobile 5G services in several U.S. locations later this year.