U.S. Should Reject Socialized Broadband | Citizens Against Government Waste

U.S. Should Reject Socialized Broadband

The WasteWatcher

The United States telecommunications industry has led the way globally in building the first four generations of wireless communications and is already deploying the fifth generation, or 5G.  The federal government’s role should remain making spectrum available to the private sector through competitive auctions under the purview of the Federal Communications Commission (FCC).

On Wednesday, September 30, the FCC is meeting to consider a critical opportunity to make available for shared use spectrum previously reserved for the Department of Defense (DOD).  This is a significant step toward freeing up spectrum used by federal agencies, which have been very reluctant to give up or share it, even if they are not using it.

Yet even the potential auction of this small 100 MHz between 3.45 to 3.55 GHz is now being threatened by a small group of people who believe there should be a “national network” in that band.  It would take two to three years to build and would provide wholesale “open access” through a single owner, a company called Rivada.  It is not a coincidence that on September 18, only 12 days before the FCC meeting, DOD threw a wrench into the proceedings by issuing a request for information that asked whether DOD should “own and operate 5G networks for its domestic operations.”

The idea that there should be a “nationalized” broadband network of any size is presumptuous and insulting to the private sector’s incredible innovation and investment.  The U.S. is not China, where the government owns the entire network.  And the claim by Rivada’s cheerleaders that America can beat China by emulating its communist government is outrageous.

There is currently one “national” network, known as FirstNet, which is reserved for first responders.  It was funded by auction proceeds and AT&T was selected as its contractor.  Rivada, in a consortium with other companies, had also bid to build FirstNet, but the Department of the Interior rejected its application after reviewers found it had a “significant risk of unsuccessful performance.”  Rivada sued in the U.S. Court of Federal Claims, where the judge ruled the company “lacked relevant experience managing subcontractors in ordinary settings, let alone in completing projects of this size and complexity.”

Having learned that the company cannot win on the merits or capabilities, Rivada has tried an end-around by running to the White House for help.  These pleas should be firmly rejected.  While some administration officials have been both against and then for the idea, Attorney General William Barr said in February 2020 that the Rivada concept of open access “is just pie in the sky.  This approach is completely untested, and would take many years to get off the ground, and would not be ready for prime time for a decade, if ever.” 

There has been strong opposition to nationalized 5G from Democrats, Republicans, industry, the FCC, and advocacy groups that do not generally otherwise agree on telecom and technology issues.  Shortly after the RFI was released by DOD, House Energy and Commerce Committee Chairman Frank Pallone (D-N.Y.) and Subcommittee on Communications and Technology Chairman Michael Doyle (D-Pa.) released a joint statement.  They said the creation of a national 5G network would “slow down the deployment of this critical technology” and noted that all five FCC commissioners, who testified before the committee on September 17 (in an otherwise contentious hearing) unanimously opposed a national 5G network. 

Building, operating, and managing 5G networks is an incredibly complex and costly endeavor.  The private sector has been doing yeoman’s work to rapidly deploy the new 5G mobile networks using spectrum licenses they obtained through public FCC-conducted auctions, which have generated more than $122 billion for the Treasury.  According to CTIA, 5G will generate  $275 billion in investment, create three million new jobs, and provide $500 billion in economic growth. 

Efforts similar to Rivada’s to subvert this successful process by asking the government for special exemptions or favors to build telecommunications networks using taxpayer-owned spectrum have failed, including Congress’s refusal in 2001 to circumvent a court decision denying NextWave Telecommunications, Inc. from receiving spectrum it bid for prior to filing for bankruptcy.  Other cases include Frontline, which tried to create an open access network that would limit participants and enrich the company at taxpayer expense.  Frontline went out of business before it even issued a bid, and the spectrum it was seeking lay fallow for five years. 

The deployment of 5G and maintaining America’s global leadership advantage is indeed a matter of national and economic security.  The process by which spectrum has been made available should continue without interruption.  The FCC should move forward with its agenda and ignore any effort by Rivada to get in the way.

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