5G Can Put the U.S. Economy into Hyperdrive if States Allow It
By Edward Longe, American Consumer Institute
The Biden Administration has promised to get broadband out the all Americans. However, wiring the U.S. may not the best means to accomplish this, considering that there are already more wireless subscriptions in the U.S. than people. As wireless services continue to become much faster, a more effective and less costly means is possible – via the next generation wireless broadband service (5G), and he can accomplish this without costing taxpayers a dime.
When Verizon first announced its plans to implement 5G wireless technology in 2015, they promised internet speeds up to forty times faster than current 4G technology. These speeds would allow consumers to browse the internet faster and enable connected devices to communicate with each other instantly without human intervention. The 5G connectivity has also facilitated the development of technologies that would have seemed impossible just a few years ago, such as autonomous cars and remote patient monitoring that allows patients to receive healthcare at home. As a result, 5G has not only enhanced consumer welfare but has also significantly improved the quality of life for Americans.
While 5G technology has considerable social benefits, 5G infrastructure deployment faces multiple roadblocks at the state and municipal levels. These roadblocks limit access to groundbreaking technology and prevent the economy from reaping the economic benefits of 5G. To allow the broader U.S. economy to experience the long-term economic benefits of 5G, states should follow the Federal Communications Commission‘s (FCC) lead and remove unnecessary barriers that prevent the technology’s deployment.
Economic impact studies routinely show the significant economic benefits 5G could bring to the U.S. economy. The Boston Consulting Group (BCG) estimated 5G could “contribute $1.4 trillion to $1.7 trillion to U.S. GDP and create 3.8 million to 4.6 million jobs in the next decade.” BCG also estimated these economic benefits will affect “communities with lower population densities” as well as large urban centers.
Research from the American Consumer Institute (ACI) has re-affirmed the potential economic benefits of 5G for rural America, showing the 5G deployment could substantially improve the economies of predominantly rural states. For example, ACI estimated the benefits of constructing a 5G network in Arkansas, with a population density of 58.25 people per square mile, could see an additional $4.3 billion added to its GDP, as well as 4,155 more jobs each year. Once deployed, Arkansas’ economy would see nearly $11 billion in consumer benefits from these services.
The economic benefits brought by 5G could mean lifting millions of Americans out of poverty, giving students the tools they need for distance learning, and providing communities with remote access to lifesaving medical services. The billions added to rural economies and thousands of additional jobs could also mean those living in rural communities experience financial security for the first time.
The FCC quickly recognized the potential technological and economic benefits of 5G and took deliberate steps to remove barriers to infrastructure deployment. Aside from making high, medium, and low band spectrum available, the FCC also created the 5G Fund for Rural America that will make $9 billion available to deploy infrastructure in rural communities and they implemented the One Touch Make Ready Order that streamlined to 5G deployment on current utility poles.
While 5G promises to put the U.S. economy into hyperdrive, significant roadblocks still exist at the state and municipal levels. Most of these roadblocks center around permits to build new infrastructure. The permit process has been exploited by some government entities as another means to tax and pad coffers by imposing high fees and lengthy application process on the buildout of small cell sites within their jurisdictions.
PricewaterhouseCoopers estimated the process of applying for a permit to install a small cell tower from application to approval could take 24 months, with no guarantee of a positive outcome. In April 2019, the city of Torrence rejected an application from Crown Castle, a telecom infrastructure company, to install small cell installations in the city that would have expanded 5G coverage. That same month, the California Supreme Court ruled local municipalities can limit 5G infrastructure for aesthetic reasons.
Barriers to 5G deployment at the state and municipal level are not only slowing the technologies’ expansion but are preventing consumers from accessing faster speeds and higher quality of life. Additionally, they are preventing the broader economy from experiencing the economic benefits of enhanced connectivity.
While several states and municipalities have taken steps to limit the expansion of 5G coverage, others have made meaningful steps to ensure the efficient deployment of 5G infrastructure. For example, Georgia passed Act 53 in 2019 that banned aesthetic appearance from being used to deny permits for small cell towers, granted providers the right to install and replace small wireless facilities on public lands, and imposed upper limits on application fees. Georgia’s example shows that states can create a friendly regulatory environment that allows 5G infrastructure to be deployed efficiently and quickly. With Georgia’s friendly 5G regulatory environment, its not surprising that 5G connectivity now covers most of the state.
Accelerating 5G deployment by streamlining its buildout will be a much better way for the Biden Administration to accomplish its broadband goals. With the significant economic benefits 5G offers the U.S. economy, it is increasingly vital that states follow the FCC’s lead and create a regulatory environment that allows 5G infrastructure to be deployed quickly and efficiently. Failure to do so will not only have severe economic consequences for the national and local economy, but it will prevent consumers from accessing technologies that can drastically improve quality of life.
Edward Longe is a research associate at the American Consumer Institute, a nonprofit educational and research organization. For more information about the Institute, visit www.TheAmericanConsumer.org or follow us on Twitter @ConsumerPal.