The Trump Administration made a few announcements about building super-fast 5G wireless networks on Friday, but the real purpose of the White House event was buried beneath the headlines.
On the surface, President Trump and Federal Communications Commission chair Ajit Pai were promoting the schedule for a new spectrum auction and funds for extending faster Internet service to rural areas. But the auction, now slated to start on December 10, has been on tap for the “second half of 2019” since last year. And the funds for rural Internet connections, which don’t have to use 5G technology or even wireless, were just an extension of a long-existing program.
Instead, the real agenda was to try and kill a well-funded lobbying effort to convince the federal government to take over 5G airwaves and build a nationalized network that private carriers would have to lease from the government. Supporters included prominent Republicans Newt Gingrich and Karl Rove, as well as Trump 2020 campaign manager Brad Parscale.
But the idea has driven the U.S. telecommunications industry, which is spending tens of billions of dollars to build private 5G networks, bonkers.
President Trump, accompanied by his daughter Ivanka, quickly clarified his administration’s position: “In the United States, our approach is private-sector driven and private-sector led. Government doesn’t have to spend lots of money,” Trump said. “We had another alternative of doing it that would be through government investment and leading through the government. We don’t want to do that because it won’t be nearly as good, nearly as fast.”
It was the first time Trump himself addressed the issue of possible 5G network nationalization.
U.S. carriers have been racing to deploy their own 5G networks. Verizon (VZ) last week turned on its super-fast network in parts of Chicago and Minneapolis and says it will expand to 30 cities this year. AT&T (T) started a mobile 5G service via a portable Wi-Fi hotspot in 12 cities in December and added seven more this month. Phone service is coming soon. Sprint (S) says it will offer 5G phones starting in four cities next month, and T-Mobile (TMUS) is aiming for the second half of the year.
Of the other two supposed new announcements, analysts were unimpressed. “There is nothing particularly new or particularly interesting,” New Street Research analyst Jonathan Chaplin wrote after the event ended. The timing of the auction “isn’t really even new” and the rural fund will be “immaterial” for major Internet service providers.
The upcoming auction will cover airwaves in the high frequency bands of 37 GHz, 39 GHz, and 47 GHz. The FCC completed a 28 GHz auction last year and an auction of rights in the 24 GHz band is about to finish.
The rural Internet fund, which Pai said would total $20 billion over 10 years, would extend a 2011 program that is slated to expire after 2020. The expiring “Connect America Fund” uses a portion of fees collected from consumers as part of the Universal Service Fund to promote Internet service in rural areas. Pai’s new “Rural Digital Opportunity Fund,” which will have to be created through the usual FCC rule-making process, would use the same funds for much the same purpose.
And the initiative won’t help spread 5G much if at all, as New Street Research advisor Blair Levin noted. “This really has nothing to do with 5G, which is designed to offer gigabit speeds,” Levin wrote in a report on the event. The minimum speed for service backed by the new fund will be 25 megabits per second, “which means that networks that offer speeds 40 times less than 5G does will be eligible for the funding
(Update: this story was updated on April 15 with additional analyst comments.)