Last month, the Federal Communications Commission (FCC) voted on a Report and Order, which would begin the process of making 100 MHz in the 3.1-3.55 GHz band available for 5G service, continuing efforts to facilitate the private deployment of 5G networks. However, there has been some talk about derailing this process in favor of a nationalized 5G network. This would be a mis-step. The FCC’s free market approach allowed the United States to lead the world in 4G, and this new direction threatens to turn back progress.

The United States has been successful in relying on market forces in the development and deployment of broadband networks in the United States. Using this model and allocating sufficient spectrum bands with flexible rules, the United States led the world in 4G. This led to thousands of jobs and a thriving technology industry that has become the envy of the world. And indeed, with the Commission’s efforts to reverse misguided utility style regulations, American broadband providers continue to increase capital investment into their networks. Just this week, the Commission announced an Order on Remand to clarify a few issues with the original Restoring Internet Freedom Order that will be voted on later this month. The regulatory certainty this provides will incentivize further investment as broadband providers raise capital and invest in their networks.

But for wireless networks in particular, access to spectrum remains a key challenge as the right to operate at mid-band frequencies is a key input for next-generation, 5G networks because they allow for higher capacity while still providing widespread coverage. Recent reports indicate that American broadband providers invested over $29 billion last year in advance of 5G networks becoming operational, but there is more to be done as current mid-band allocations in the United States still lag behind the rest of the world.

Fortunately, the FCC started making significant strides on this front by taking a strong, market oriented approach to 5G deployment in the United States with auctions of the 3.5 GHz CBRS and 3.7-4.2 GHz C-band this year. In the 3.1-3.55 GHz band, the Commission voted on a Report and Order which removes all non-Federal allocations from 3.3-3.55 GHz. With 100 MHz already identified by the National Telecommunications and Information Administration (NTIA) as a potential for sharing, the FCC will begin to open portions of the band on a licensed basis. While more work must be done, this additional capacity will further incentivize carriers to invest heavily in 5G technology, especially as the major carriers race to compete with one another.

Unfortunately, despite these successes, some calls for a different approach that would remove this regulatory certainty. Indeed, despite advocating for markets previously, the president’s re-election campaign specifically calls for a national 5G network. While the specific details of the nationalized network remain murky, the basic idea would be to take existing spectrum allocated for federal users and either build a wholesale network or charge for the right to operate at those frequencies.

Such an approach would only serve to stifle the existing deployments while enriching the company that owns the technology. As R Street’s Charles Duan explained, a single firm “playing gatekeeper to 5G does not make for a competitive or innovative market, despite the superficial appearance of competition among those who must pay tribute to the gatekeeper.” At the same time, a nationalized 5G network provides few, if any, national security benefits. In fact, it would only serve to stifle innovation and investment in our existing private networks, and the idea that the government can run a network more efficiently than the private sector is laughable. Instead, a strong commitment to private deployment will provide the necessary certainty for American providers to quickly deploy 5G networks.

This isn’t to say that we should avoid sharing spectrum between federal and non-federal users. As more concurrent operations deploy in the field, it is understandable that sharing may be necessary. Indeed, in the 3.5 GHz CBRS band for example, licensees obtain what is known as a priority access license, meaning they must cease operations when a federal incumbent is present. If there are no other options for the federal user or if the costs of moving the operations to another frequency are too high, then sharing solutions do make sense. But even in that band, private operators still build their own networks and own licenses to operate at bands when federal operations are not present.

Markets usually work, and they led the way to tremendous successes in 4G deployments. It is critical, now more than ever, that Federal regulators continue to work to make spectrum available to private operators on a licensed basis. Market forces rather than central planning will best shape the optimal uses for 5G. Why fix something that isn’t broken? 

Image credit:  Fit Ztudio

Featured Publications