Should the Federal Gov’t be Prohibited From Nationalizing 5G Networks? (S. 3255)

What is S. 3255?

(Updated November 4, 2021)

This bill — known as the Eliminate From Regulators Opportunities to Nationalize the Internet In Every Respect Act (E-FRONTIER Act) — would prohibit the president or a federal agency from nationalizing 5G networks without authorization from Congress. It would also require the Comptroller General to conduct a security analysis of threats facing U.S. broadband networks from American adversaries.

Argument in favor

The major wireless carriers already invested significant time and capital into building 5G networks for their customers, and have plans to deploy 5G in some markets this year. A federal takeover of the process at this stage would be costly, as a gov't network protected from competition would be immune to the competitive and financial pressures that drive private firms to innovate, maximize efficiency, and provide value to customers.

Argument opposed

A government-run 5G network could potentially be more secure and cheaper for consumers than a privately- run network. By centralizing all efforts towards building a national 5G network, the government would also be able to reduce the inevitable duplication of effort and infrastructure that would occur if all the major cellular carriers built their own 5G networks independently.

Impact

Cell phone users; wireless industry; Congress; Comptroller General; and the president.

Cost of S. 3255

A CBO cost estimate for this bill is unavailable.

Additional Info

In-Depth: Sen. Ted Cruz (R-TX) introduced this bill to protect commercial 5G broadband networks from nationalization without authorization from Congress:

“Fifth generation mobile technology has the potential to create millions of new jobs and unlock new breakthroughs across vital sectors of the American economy. Our American system of free enterprise has helped the United States become the global leader in mobile broadband technology since 2009, and it is best equipped to maintain our global leadership moving forward. [T]he private sector is best positioned to build, deploy, and secure 5G networks. [This] legislation would prevent massive government overreach in our private sector and assert the proper role of Congress in the decision making process. If we try to compete with China by acting like China, we will lose far more than our global leadership in mobile technology.”

In a Senate hearing in June 2018, National Telecommunications and Information Administration (NTIA) Administrator David Redl stated that his advice to the President would be to “not move forward and nationalize 5G,” even though the White House has floated this idea. Additionally, Federal Communications Commission (FCC) Chairman Ajit Pai called federal efforts to construct a nationalized 5G network counterproductive:

“Any federal effort to construct a nationalized 5G network would be a costly and counterproductive distraction from the policies we need to help the United States win the 5G future.”

Pai added that the history of the wireless sector’s development indicates that keeping cellular network private is the best solution, arguing that “the main lesson to draw from the wireless sector’s development over the past three decades—including American leadership in 4G—is that the market, not government, is best positioned to drive innovation and investment.”

Broadband providers, who have already spent much time and money working on 5G, argue that it would be a total waste to have the government start over. To this point, Brooklyn-based broadband Skywire’s founder, Alan Levy, said:

“Individual companies spent billions of dollars on the spectrum. That’s how they’ve built these cellular networks, and these bands of the spectrum were auctioned off by the government, which has made billions from them. So that money has been expended and these networks are beginning to be deployed. That would certainly seem to be unfair and really inefficient.”

While there are no outright statements of opposition to this bill, some support a nationalized 5G network. Daniel Kahn Gillmore, a senior staff technologist for the American Civil Liberties Union (ACLU), is among these. He argues that U.S. cell phone networks are currently vulnerable to foreign actors, and government involvement in cell networks has some real merit:

“The risks to the country of control by the network operator are real. The fact that your hardware vendor has leverage over you is real. And the fact that there are people who want to take advantage of you, whether inside the U.S. government or outside of it are real. So I think the premises of the proposal [to nationalize 5G] are legit.”

From this perspective, a government-run 5G network could be more secure than a decentralized patchwork of private networks due to the ability to have centrally-planned network upgrades (akin to the government’s switch from rabbit-ear to digital television).

Other arguments in favor of a government-run 5G include the contention that modern internet access is a public good, and that internet access will be more equitably available in the absence of a profit motive. On the former point, the ACLU’s Gillmore argues that “there’s [no] problem with governments running roads or sewer systems,” which are comparable to cellular networks as “modern internet access [is also] a utility.”

There is one cosponsor of this bill, Sen. Catherine Cortez Masto (D-NV). The R Street Institute and CTIA also support this bill.

Of Note: In January 2017, a National Security Council memo calling for nationalizing 5G mobile broadband networks was leaked — and since then, the Trump administration has declined to explicitly foreclose nationalizing 5G. In fact, in June 2018, President Trump’s campaign manager tweeted about the need for a single 5G network, suggesting a possibility that the current administration could support a nationalized 5G network.

Commerce Secretary Wilbur Ross has expressed the Trump administration’s prioritization of building a 5G mobile broadband network, stating:

“Whoever pursues it, whoever does it, we’re very much in support of 5G. We need it. We need it for defense purposes, we need it for commercial purposes.”

The U.S. wireless industry is already working on deploying 5G networks, with AT&T, Verizon, and T-Mobile investing heavily in this area, and some cities slated to receive 5G service this year. As a whole, the industry has already spent billions of dollars acquiring spectrum and beginning to develop and test 5G networks. Collectively, the wireless industry has pushed aggressively for the Trump administration and Congress to aid in the “race to 5G,” which is argues will help the U.S. gain an economic edge over other countries, such as China, that are also pursuing such networks.

Theoretically, a U.S.-built 5G network could be more secure and resilient to Chinese government intrusions — a concern that arises in this area due to the fact that China is the dominant manufacturer of network instructure. However, a government network that is not subject to competitive pressure would also be immune from the financial and competitive pressures that drive private firms to innovate, maximize efficiency, and provide value to their customers in order to stay ahead of their competitors.

A middle ground between a government-owned 5G network and all private wireless providers building their own networks independently would be the companies coordinating efforts to build a “network of networks” or at least a common backbone for basic 5G applications. This was done in the mid-1990s, when the major carriers engaged in full-throated competition with each other while sharing the cost of building a common network and using the same infrastructure.

Media:

• Sponsoring Sen. Ted Cruz (R-TX) Press Release
  
• CTIA Press Release (In Favor)
  
• R Street Institute Press Release (In Favor)
  
• Axios (Context)
  
• Countable (Context)