By Jean-Luc and Dylan Shepard, American Consumer Institute
When the United States led the world in implementing 4G technology, tremendous innovation and economic benefits followed. New services and greater capabilities for businesses led to the creation of millions of jobs and significant contributions toward productivity. The Cellular Telecommunications Industry Association (CTIA) estimated that 4G technology contributed $690.5 billion to the American economy in 2019 alone.
Just as 4G steered America into a modern technological era, 5G has the potential to usher in new revolutionary services such as widespread usage of autonomous vehicles, virtual healthcare, and smart cities which would drastically increase human productivity and have immeasurable benefits for American consumers. However, this is only possible if providers can access spectrum, the radio frequencies needed for 5G wireless broadband.
Amidst the global race for 5G implementation, however, the U.S. government’s allocation of new spectrum to the private sector has stalled, with the stream of new spectrum set to run dry in September if Congress does not renew the Federal Communications Commission’s (FCC) ten-year mandate to distribute and regulate commercially allocated spectrum.
While Congress considers passing a short-term solution, such as the proposed two-year renewal, Congress must also create a new pipeline that addresses the critical failings of the previous system. Under the FCC mandate, interagency wrangling and a bureaucratic slowdown have delayed the freeing up of spectrum for the usage of 5G networks which has prevented new technology from reaching American consumers, all while putting the US behind in the global race for 5G.
Government agencies have consistently interfered in the FCC’s spectrum auctions by pressuring firms into accepting network launch delays, putting the entire investment cycle at risk given that they spent billions of dollars to secure specific frequencies under a timetable. This was observed when the Federal Aviation Administration (FAA) pressured AT&T and Verizon to postpone the activation of their newly constructed C-band 5G towers by six weeks while also getting them to continue mitigation efforts on towers nearby airports through the end of 2022. This was based on unsupported claims that radio frequencies under the C-band would interfere with aircraft altimeters, despite the same frequency not causing any interference issues abroad.
Rather than being the exception, the FAA’s behavior is part of a much larger pattern of agency interference in spectrum allocation. Beyond the FAA, the Department of Defense and Department of Transportation have made efforts to derail FCC spectrum allocation by supported claims of potential interference by 5G towers or unlicensed users operating on similar frequencies.
As a result, such delays hurt the bottom line of wireless providers who have promised consumers and investors specific launch dates and operational goals. This not only delays consumer access to critical 5G networks but also deters firms from further investment spending due to increased risks and uncertainty from potential government interference.
Any delay in the development of 5G threatens the 3.8 million jobs and $1.4 trillion of economic growth that analysts expect it to create. According to a study conducted by the GSM Association, up to 40% of these benefits could be lost if the US fails to make more spectrum available for mobile services. For consumers, that could mean billions in lost savings and a vastly reduced job market.
Beyond 5G, spectrum grants access to cutting-edge Internet of Things (IoT) technology, which can be used to power smart cities. In these cities, urban planners can use spectrum to accomplish tasks such as dimming lights in unoccupied areas or reorienting traffic signals to maximize efficiency. Each of these improvements bolsters consumers quality of life, while saving them time and using their tax dollars more effectively. Without access to spectrum, however, these benefits will remain a pipedream. If the FCC can successfully expedite the distribution of spectrum, consumers stand to benefit all the sooner.
The vast economic potential of spectrum has prompted global competitors to begin crafting pipelines between their governments and businesses. China has leaped ahead of many other countries by taking significant steps to accelerate 5G availability, making hundreds of megahertz of spectrum available as far back as 2017. China’s development of 5G represents a double threat to the US, jeopardizing its national security and undermining its economic competitiveness in the race to 5G, and eventually 6G.
US tech companies need spectrum to avoid being left behind by foreign nations and tap into the economic opportunity of 5G and similar technologies. Whether through streamlining the auction process or requiring federal agencies to provide definitive evidence before blocking auctions, the government should prioritize maximizing its availability of spectrum.
Action now will let the US put consumers first, instead of letting them fall prey to interagency infighting.
Jean-Luc and Dylan Shepard are with the American Consumer Institute, a nonprofit educational and research organization. For more information about the Institute, visit www.TheAmericanConsumer.org.