5G wireless will drive economic growth for decades to come, but we need a comprehensive strategy to ensure a robust deployment and adoption of secure networks. A U.S. strategy for 5G should play to our strengths to overcome unfair practices that have made Huawei a leader.
These are frenzied days for 5G. The transition to this next generation of wireless technology presents unique opportunities and challenges that must be carefully thought through and addressed if the United States is to maximize the successful flourishing of next-generation wireless networks and the applications that rely on them. Policymakers are faced with complex technologies and economic dynamics around 5G, wherein decisions have an outsized impact on long-term national competitiveness and security.
Headlines feature consternation over the pace of 5G deployment, as well as the limited number of 5G equipment manufacturers and the risk posed by the continued rise of Chinese vendors, especially Huawei. Some warn that unless the United States engages in a fast and extensive 5G deployment, it will fail to gain a competitive edge in the applications that will leverage 5G networks. A national 5G strategy needs to address both production and adoption issues.
WHAT IS 5G?
At one level, 5G is simply the next generation of wireless infrastructure. New generations of mobile come in waves, requiring changes throughout the network. The first generation of mobile telecommunications was focused purely on basic voice service. The next generation, 2G, was still focused on voice, but made the switch to digital standards and enabled text messaging. 3G then introduced data services, expanding the functionality beyond voice to include multimedia and limited Internet access. It was not until 4G that a full specification based on Internet Protocol allowed for functional mobile broadband, in turn serving as a platform for dizzying innovation in mobile applications. These waves of technological changes have come in roughly decade-long cycles: 1G mobile voice in the 1980s, 2G in the 1990s, 3G basic data in the 2000s, and 4G LTE data in the 2010s.
In one sense, 5G is simply the next step in this cycle. Yes, 5G will offer new-and-improved capabilities (e.g., lower latency, higher capacity, and support for a larger number of connections). 5G will see a much greater capacity of mobile networks, thereby driving down unit costs and increasing consumer surplus, and likely expanding the dynamic competition between fixed and mobile network providers. 5G will likely serve an important role in future digitization and automation of systems, connecting smart sensors with AI.
WHY 5G IS IMPORTANT: SEPARATING HYPE FROM REALITY
To listen to some breathless accounts, 5G will do everything—potentially even having a hand in curing cancer. Some have argued 5G will be central to U.S. military capabilities; others tout remote-controlled robotic surgery.Some of 5G’s potential is at risk of being oversold. Gartner, in its famous “Hype Cycle” of technological development analysis, put 5G at the very peak of hype in its 2019 report.
With any new technology there is always hype, and at one level this is positive because it creates excitement, motivating companies, consumers, and policymakers to support innovation. But too much hype is harmful, as it risks leading to a backlash and cynicism from dashed expectations. Overinflating the importance of 5G—making it a stand-in for a country’s overall technological prowess—also invites bad policymaking made out of misguided national security or geopolitical fears. In reality, what 5G can actually do is more than enough to warrant significant excitement without going overboard with unrealistic hype.
CHALLENGES AND THREATS TO AN INNOVATIVE, SECURE WIRELESS ECOSYSTEM
There are a number of challenges facing U.S. policymakers and private-sector actors in the transition to 5G. Understanding each distinct challenge is the first step in crafting policies to effectively address each task ahead. A relatively early and broad deployment is an obvious area of focus, but a national strategy should also address acute security concerns related to the supply chain, long-term wireless innovation, and demand-side adoption efforts to see 5G effectively integrated with the economy.
A swift deployment of 5G is important, but much of the media concern over the race to be the first country to deploy 5G is misplaced. When it comes to the biggest impact of 5G—the overall economic value creation—what matters is having a network of large-enough scale such that U.S. companies are able to develop new applications and uses that require the capabilities of 5G. There is something of a first-mover advantage, but it is not a significant setback if the United States is not the first to achieve similar coverage deployment as other countries (as will likely be the case considering the cost structure of America’s dispersed populations).
The aim should not be to deploy 5G as quickly as possible, but to set the conditions for successful long-term innovation and growth of this important platform. All nations, including the United States, are striving to be early in deploying large-scale networks. In the United States, there is no reason to believe the three intensely competitive and financially healthy wireless providers—plus the hungry new entrant, Dish—will not have the capability or incentive to deploy 5G networks to meet demand. However, there are obvious policy levers to help accelerate deployment: infrastructure, spectrum, and tax policy. As the first two levers have been widely discussed elsewhere and are not the core focus of this report, we will only briefly address the policies to accelerate the deployment of 5G—the table stakes of a national 5G strategy.
A NATIONAL STRATEGY FOR 5G
The United States should establish a coordinated national strategy for 5G that incorporates a range of policy measures; in the short term, streamlining deployment of 5G networks, making additional spectrum available, and helping to lead adoption and demand for advanced wireless systems. In the longer term, we should be making an effort now to support future technological and market competitiveness. Seeding the opportunities for future technology by creating the conditions for robust R&D investment and technology transfer, as well as early-stage research, should be a priority.
Whether or not one is willing to call it “industrial policy,” “competitiveness policy,” or simply a “strategy,” a nation must have a plan of some kind. As Senator Rubio (R-FL) has put it, “The U.S. cannot escape or avoid decisions about industrial policy.” Put another way, having no 5G strategy in place is itself a policy decision (albeit an ineffective one). There is increasing bipartisan support for industrial policy generally, and particularly with regard to planning for 5G.
5G poses for the next decade an important opportunity for economic growth and dynamism throughout a number of sectors of the economy. The degree to which 5G is anticipated to be integrated within production processes across the U.S. economy highlights both its importance and the risks inherent to relying on untrusted suppliers—or leaving equipment production up to a globalized market without some further strategy in place. To date, the approach of the United States to 5G has been scattershot, and not always well calibrated to address specific challenges. A national strategy for 5G that invests in research, supports standards bodies, accelerates deployment, and facilitates the transition to virtualized equipment should be a priority.