What cell phone carrier do you use? Some in Washington think it should be Uncle Sam.

In January, leaked documents showed that the National Security Council had considered creating a nationalized 5G network. Last month, President Trump’s campaign manager floated the idea again. These proposals were widely criticized and rightly so, as a nationalized 5G network would be crippling to innovation, cybersecurity and economic growth. Senators Ted Cruz (R-Texas) and Catherine Cortez Masto (D-Nev.) should therefore be commended for introducing the E-FRONTIER Act, which bars the creation of a nationalized broadband network without Congressional approval.

The United States has decades of experience with government-supported, uncompetitive communications networks. For example, the AT&T telephone monopoly—granted and protected by the government for most of the 20th century—was characterized by high costs and slow innovation. This, of course, stands in stark contrast to the rapid innovation and growth that resulted when less-regulated mobile networks began to compete.

Today, American wireless networks in the United States are among the best in the world and they have rapidly evolved to meet proliferating consumer demand and ever-changing technology. These experiences provide a clear comparison: Competitive, market-driven networks yield better results for consumers than those characterized by heavy government intervention.

Indeed, competition at all levels of wireless service is a key driver in advancing the process of innovation and giving consumers better speeds, stronger connections and lower prices. Today, the major wireless carriers must continually work to improve their networks or risk losing customers to competitors. For this reason, private carriers have invested billions of dollars in their networks and are preparing to spend an additional $275 billion to make 5G a reality. Creating a single, government network would hamper the virtuous incentives created by this competitive process and would result in lower quality service and lost innovation.

The economic drawbacks of the nationalization proposal are clear, so the rationale given by proponents usually involves national security issues. But, as R Street Senior Fellow Paul Rosenzweig has noted, the government does not exactly have a stellar record on cybersecurity. There is no reason to think that a nationalized 5G network would actually be more secure than those built and run by the private sector.

However, the federal government does have an important role to play in enabling private 5G networks to benefit consumers. Removing regulatory roadblocks, such as onerous fees for infrastructure deployment, and ensuring that spectrum licenses are made available to the marketplace are essential steps for the United States to reach its wireless potential.

A nationalized 5G network is a bad idea that would cripple innovation, investment and technological development in wireless services. With so much at stake, legislative action that restricts the executive power to act unilaterally is therefore a very smart move.


Image credit: Andrey Suslov

Featured Publications